I tried cashare.ch but had mixed results. Tried to participate in 11 loans with small money (~300 chf) but 4 went bankrupt and I lost practically all. I’m cool with it it was “play money” but it still stings. I have to say I shooted for like 8% average since there is an annual fee of 0.75% (which is not bad if you look at other alternatives) and trying to have 7+% of interest on my loans. I believe that if you go “safe” around 3-4% it can be a nice diversification. But main pain points are two: illiquid investment, you have to wait 3-5 years to get back your principal (you receive every month a fraction of the principal plus interest) and the income is fully taxable.
Do you have experience ? Share your story on p2p lending in CH
I have some money in bondora. It is very similar to lending club but in Europe. Thus the currency is euro. The drawbacks are the same as the ones you mentioned : illiquidity and 5 years waiting for your money. The return is higher than the market I think.
The advantage compared with cashare is that you can spread the risk over a huge amount of 5 euros loans.
I also invest in savingstreams which is in the U.K. It targets the short-term bridging loans secured by U.K. Properties. Up to 12% interest rate. Very few defaults (2so far) and they can recover from selling the property.
In both cases I am not sure how to declare my investments and revenues in the tax declaration.
I hope it helps. Please note that the links are referral links.
Dago
Edit: I forgot to say that transferwise is really nice and cheap to send money in Europe.
i am a little confused - bandora grants €5 on signup. but could i do anything with it? i only see loans starting from 5.25…
I have to confess i am quite sceptical up to now. could i engage with these €5?
There should be some 5 euros loans. I don’t usually pick loans myself, I rather use the portfolio manager.
In the Secondary Market I see loans at 5 euros, you could start there. Or turn on the portfolio manager.
This being said, I regret that the P2P lending market is so immature in Europe as compared to the US. Bondora is far from perfect and all other solutions I looked at are the same. I am looking forward to other’s experience as I would like to try new platforms.
Savingstreams is cool though, but quite different.
I am currently catching up with what happened in Bondora in the past months. I was passively investing and thus not caring much about it.
It seems that Bondora is not going so well and people are not happy with their returns. I would therefore advise not to invest there without a careful review of the opinions you can find around the web. I don’t think that they are worse than other P2P lending shops but it is really difficult to determine your return and XIRR.
I tried cashare last year and have 4 ongoing small loans (300-600), one of wich is not paying. Interresting experiment but there is probably not that much point if you can not have a buttload of tiny loans to shield against bancrupcy and stuff. I am also not going to persue that a lot further.
A little update about Bondora : I have divested. To do so I had to sell at a discount my loans parts. Some times at a very large discount up to 95%. In total I made 15% over 2,5 years.
2 important additional lessons I learned :
the market is pretty illiquid and it is very difficult to divest in less than a month. They are now proposing to sell a bunch of loans together which could help. It took me a long time and a terrible discount to get rid of the worse loans parts.
the return is better than I expected. I honestly thought that I would not get any profit out of this.
A friend brought my attention to it.
Things I like so far:
(apparent) transparency, with regards to borrowers’ details; and risk scores
plenty of loans are “insured” (via Helvetia insurance) [WRONG]so in case of the borrower failing to repay you still get your money back (not yet sure whether just the principal or also the interest) [/WRONG]
CH-based
appealing interface
I need to do some more reading (including small writings), but if all reads well, I plan to give it a shot with a 12 month, A/A+ risk score, insured loan of 5-10K, fairly soon; so I will be able to share my experience.
P.S. Any idea how this kind of investment/profits are looked at from the tax perspective?
Is this a “clean” capital gain, so no taxes applicable?
I used mintos for one year and had a return of 10% from short, small, personal loans. Maximum 3-4 months credit duration and all insured by the loan originators. I think you could get more return, but I preferred to have short term loans, so I can get out relative faster, without secondary market.
But I stopped using it, because I heard some stories about how the load originators would recover their money from people not paying in time…
plenty of loans are “insured” (via Helvetia insurance), so in case of the borrower failing to repay you still get your money back (not yet sure whether just the principal or also the interest)
this is misleading as Helvetia only insures certain risk on the borrowers side (unemployment, death) and all other risks still apply (defaults for any other reason)
It works like a checking account. The amount you lend is still taxed as your wealth, and the interest you receive is added to your income.
I started again using a little cashare for small loan since I reached my stock quota of 80 % and was looking for some diversification from cash and stocks. But this time I am only going for A/B+people and using auto invest to reduce the time to look at all projects.
Cashare was one of the first and actually only cost you as investor 0.75 %compared to 1% lend.ch
But agree there are many. Just use it a little for diversification and not try to catch high return. Increase stocks if you want to increase return.
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