Where Can You Buy Or Sell Existing Loans?
This page was last updated on 24 May, 2017
See a list of all the peer-to-peer lending secondary markets, how much they cost and whether you can buy and sell loans at a discount or premium.
A peer-to-peer lending secondary market – or marketplace – allows you to buy and sell existing loans after they have already begun.
Why would you do this? Because it can be quicker, safer or more profitable:
- You might sell because you need the cash before the loans are repaid.
- Or you sell because you think the borrower is not as safe as you previously thought.
- You might buy and sell at a higher price to make a profit. (More on that in Trading Loan Parts At A Profit Or Loss.)
- You might buy existing loans because they have become safer – for example, because a property-developer borrower has completed the property's foundations without problem, so the risks of delays or budget problems has decreased.
- Buying existing loans can also be quicker than waiting for new loans to become available. You can simply start lending straight away by buying out another lender who wants to sell.
It's these secondary marketplaces that allow us to exit loans early or to start lending right away instead of waiting for new loan deals to close.
Below, we show you all the P2P lending websites with secondary markets and a few details about them, such as the costs of using them or if you can sell impaired loans (e.g. loans that are late or have gone bad).
Peer-to-peer lending secondary markets where you can set prices
If you want to be able to sell your loan parts for more or less than you paid, at a price you specify, most of the following P2P lending websites offer this.
This means you might have lent £1,000 and now you want to sell your loan part to someone else for, say, £900 to sell quickly, or make a profit by selling it for £1,100. Or you could be the buyer of that loan part.
With these marketplaces, the seller of the loan part usually sets the prices and then buyers choose whether to buy or not.
To find out why you might buy or sell at a discount or a premium, rather than “at par”, read Trading Loan Parts At A Profit Or Loss.
Some platforms cap the size of any discount or premium, e.g. at 3%. So a £1,000 loan part could be sold for no less than £970 and no more than £1,030.
Here's the list of secondary markets where you can set prices:
|P2P Lending Website||Fees||Can Sell At Premium/Discount||Notes|
|Ablrate||No||Yes||You can set loan prices to sell or buy. No trading when just one payment is remaining|
|CapitalStackers||Sell: 0.25%; min £125||Yes||Min. fee works out at a high 2.5% if you lend the minimum of £5,000, but it's still been profitable to sell at a higher price|
|eMoneyUnion||No||Yes, capped at +/-3%|
|Funding Circle*||Sell: 0.25%||Yes, capped at +/-3%|
|Funding Empire||Sell: 0.5%||Yes, capped at +/-3%|
|FundingSecure||No||Yes, capped at +/-1%||No trading when just 30 days remaining; accrued interest past to new lender, which can lead to a tax loss (see below)|
|Invest and Fund||No||Yes, capped at +/-10%|
|LandlordInvest||Sell: 0.5%||No||This secondary market is due to be launched in May/June 2017|
|Lendy||No||No||You can sell a fraction of your loan holding if you want|
|Madiston LendLoanInvest||Buy: 25p+0.25%;|
|Mintos||Sell: 1%||Yes, capped at +20%/-99%||Completely open market: can even sell impaired loans|
|Money & Co.||Sell: 0.25%||Yes|
|rebuildingsociety*||Sell: 0.5%||Yes, capped at +/-5%||You can sell impaired loans (but not easy with a -5% cap)|
|UK Bond Network||No||Yes|
More on FundingSecure
With most P2P lending sites, the interest is paid to the original lender and any new lender buying secondhand loan parts just buys the actual loan part.
However, as noted in the table above, with FundingSecure, when you sell a loan part then the new lender buys the loan plus all the accrued interest in the loan. For the buyer, this presents a potential, albeit small, additional risk.
If you buy a loan part for £100 and interest of £5 has accrued, and assuming the seller sells at par for £105, when the borrower repays the loan you can expect to be paid back £105 plus any interest earned since.
However, let's say that the borrower repays early. You have in your possession £5 worth of interest, which could be taxable at your own income-tax rate. If you're lending in a FundingSecure IFISA (not yet available) then it won't be. And if you're a basic-rate or higher-rate taxpayer and you're not lending a large sum then you have a good chance you won't need to pay tax. (Read our tax guide for more on that.)
Otherwise, you could have a tax bill of between £1 and £2.25. So you'll have paid £105 + up to £2.25 in taxes, but received just £105. An instant tax loss.
Just to emphasise though that such losses are still going to be rare; I just want to point out the possibility to you.
Peer-to-peer lending secondary markets for quick entry/exit only
Some secondary markets really only exist to be a way to exit your loans early or to start lending swiftly without waiting for new loan auctions to close. Sometimes you don't even really see they exist; you just see that one minute you're lending and the next minute – after you clicked a few buttons to sell loan parts – you're not. It all happens automatically behind the scenes.
These markets are not to make a profit. The advantage of them is that they are dead simple to use.
While they are very simple to use, these secondary markets don't let you choose either the price you sell at, nor can you choose the specific borrowers or loans you want to sell. You just state the amount you want to sell and wait for new lenders to be allocated the loan parts.
Whereas you can specifically choose to sell, you cannot specifically choose to buy on these secondary markets. Instead, when you want to lend through one of these P2P lending sites, they will either allocate you new loan parts, secondary market loan parts, or a mix of both. You get no say in the matter.
In addition, you can't sell at a premium but you might have to receive less back. This is to compensate the new lender in the event that they buy your loan parts paying, say, 5% interest when they would have got, say, 6% interest if they had lent their money at the latest rates to a brand new borrower.
Here's the list of peer-to-peer lending secondary markets for quick exit or entry only:
|P2P Lending Website||Fees And Adjustments|
|Assetz Capital*||None. For its easy-access account it even sets aside extra cash to help aid your swifter exit.|
|Landbay*||None for its Tracker Account; 0.2% for its Fixed-Rate Account and IFISA.|
|Lending Works*||0.6% selling fee and minimum £20 fee. Interest rate adjusted to stop new lenders losing out if necessary. A £20 fee works out at a hefty 2% on a £1,000 loan, but still less than the interest earned in about half a year.|
|RateSetter*||None for its easy-access account, for which it even sets aside extra cash to help aid your swifter exit. For other accounts, sellers receive less back to reflect the fact you would have earned less interest had you chosen a shorter lending period, with a minimum adjustment of 0.25%. You also might receive less back to stop new lenders losing out if rates are higher on new loans.|
|Wellesley & Co.*||No fee, but sellers might receive less back to reflect the fact that you would have earned less interest had you chose an shorter lending period.|
|Zopa*||None for its easy-access account and you are even prioritised to leave early over those trying to sell loans from other Zopa lending accounts. 1% selling fee and interest rate adjusted to stop new lenders losing out if necessary.|
*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 Assetz Capital, Crowd2Fund, Funding Circle, Landbay, LendingCrowd, Lending Works, Proplend, RateSetter, Rebuildingsociety, Relendex, Wellesley & Co. and Zopa, 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.