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Selling Loans For A Profit At CapitalStackers

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By on 7 July, 2015 | Read more by this author

I wrote about my interview with CapitalStackers‘* Steve Robson in CapitalStackers: High Property Returns With Lower Risk.

Today I'd like to explain about the potential to make a profit here by buying and then selling loan parts to other lenders, rather than just buying loan parts and waiting until the borrower repays it all.

Cost of selling loans early

Currently, CapitalStackers does not charge to sell loans early.

Making a profit on selling loan parts

You have the opportunity on CapitalStackers of making a profit on the sale.

New lenders taking over your loan parts have more information than you had. The borrower made more interest payments, showing some extra reliability.

But, more than that, CapitalStackers keeps its lenders regularly updated on the status of a project. If a new lender sees that the foundations have been completed, one big risk is gone. Therefore, with lower risks, the new lender will be willing to accept lower interest rates.

As the seller, you can therefore sell your £5,000 loan part for, say, £5,300. The new borrower can still expect to make £300 after receiving interest, and you get £300 too.

Horse trading

Theoretically – once CapitalStackers is offering enough loans – you could then buy and sell loans fast enough that you might boost your profits a little more than if you just take the interest.

Most CapitalStackers lenders are currently holding the loans to the end, so that they get even higher returns through the interest rate.

I think the real capital gains (on any P2P lending website) will occur during extreme times, such as bubbles and busts.

Capital gains tax

Note that if you buy second-hand loan parts, you might have to pay capital gains tax on any gains you make on selling for a profit. You won't have to if you were the original lender, if your overall investment capital gains are below your tax-free threshold, or if you lend through IFISAs or pensions.

Read more: CapitalStackers' Quick Expert Review.

Visit CapitalStackers*.

*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 CapitalStackers 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.

3 responses to “Selling Loans For A Profit At CapitalStackers”

  1. David says:

    That is a large fee. Ablrate has a two way secondary market and no fee (although 0.25 will be applied in 2016 onwards)

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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.

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.

Got it

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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.

Got it

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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.

Got it

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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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