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Rebuildingsociety Lenders In 200+ Loans Have Positive Results

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By on 30 September, 2020 | Read more by this author

It's too early to say how Rebuildingsociety* is going to perform due to COVID-19.

One of 4thWay's specialists will update the Rebuildingsociety review next month and you can expect a huge amount of updates to it. And certainly a lot more detail and opinion than I'm about to give you today, as I'm just looking at one small aspect of this business lending P2P lending site: I want to visit some interesting stats we've been sitting on from spring this year, due to the chaos and extra work that COVID-19 has caused us!

Back then, we asked Rebuildingsociety how many lenders who had lent in at least 200 loans were sitting on losses.

Rebuildingsociety told us that a total of 20 lenders have lent in at least 200 loans. Here are there results as of April/May 2020. Clearly, this is before any pandemic impact, so it shows what happens in an ordinary economy:

Loan Count Net Return
218 32%
239 24%
263 16%
228 12%
253 11%
262 10%
219 10%
205 10%
225 9%
262 9%
214 8%
200 8%
228 7%
252 7%
220 7%
200 7%
229 6%
251 6%
203 5%
212 4%

As you can see, all lenders who have lent in at least 200 loans are currently looking at positive results. Bear in mind that they won't be lending in all these loans at the same time; many will have been paid off, or written off, already.

Importantly, I've not been given any details to support how the above returns are calculated. For example, it might be based on an optimistic estimate of the amount of any outstanding bad debt that will be recovered, especially since it's record in this area has been poor.

I think this also shows the importance of lending in lots of loans. The 20th lender is currently looking at 4% returns. This is based off a typical lending interest rate of 17%. Therefore, if you've been lending in a much smaller number of loans, you might have much more wild results!

For ordinary small business loans to creditworthy businesses, which might typically earn you between 4% and 15% interest, 4thWay specialists estimate you should look to spread across at least 180 loans, provided the P2P lending site has shown itself capable in borrower selection. If you lend in fewer loans, the chances begin to rise that you lose money through bad luck.

I'm disappointed that just 20 lenders have managed to lend across 200 loans since Rebuildingsociety started, although that's not Rebuildingsociety's fault. We repeatedly see signs that a very large number of lenders don't choose to diversify enough to contain the risks. Although potentially – hopefully – some of the lenders with fewer Rebuildingsociety loans have spread a lot more money across loans on other P2P lending websites.

Visit Rebuildingsociety*.

Independent opinion: the opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.

All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

*Commission and impartial research: our service is free to you. We already show dozens of P2P lending companies in our accurate comparison tables and we keep adding more as soon as they provide us with enough details. We receive compensation from Rebuildingsociety and other P2P lending companies not mentioned above when you click through from our website and open accounts with them. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

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Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

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Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

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Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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