Moneything Peer To Peer Lending Review
** Moneything review updated November 18th 2016 **
Read my comprehensive unbiased Moneything review highlighting my experiences after 18 months of lending. See why it remains one of my top peer to peer lending choices.
Would I recommend dipping your toes in the Moneything waters? Absolutely, once you know the risks. Moneything is a smaller platform with a growing £33m+ loan book. Moneything pays lenders 10-14% annual returns but new loans can be infrequent so patience is needed to build a diversified loan portfolio. If you’re patient, you’ll be rewarded with great returns from a company with zero defaults and exceptional customer service.
My December 2016 Allocation: Unchanged
My annual rate of return: 11% Net return after bad debt and fees but before tax)
|Annual Returns||My Risk Rating *||Early Exit||Provision Fund||Min Investment||Deposit Bonus|
* This opinion risk factors in loan types, interest returns, platform history, default numbers and my own investing experience.
The Moneything Review: What You Need To Know
- Competitive interest returns for lenders
- Diversified selection of loans
- Secured loans
- Liquid secondary market to buy and sell loans
- No secondary market markups / all loans bought and sold at par
- Zero defaults
- Easy to use website with frequent improvements
- Excellent levels of staff communication
- Fast deposits and withdrawals
- Younger company with smaller loan book and less operating history
- Loans don’t amortise, increasing risk
- Multiple loans to same borrowers increases risk
- New loan flow can be slow and demand can be high
- No website statistics page showing default rates
Moneything: My experiences so far….
I have been investing in Moneything since July 2015 and my experiences have been nothing short of excellent. It continues to be one of my favorite peer to peer lending platforms. Moneything has a great secondary market that is usually very liquid. The website is very easy to use, deposits and withdrawals are handled at lightning speed and staff communications are top notch.
What Is A Moneything?
Moneything began as on online pawnbroker that used peer to peer lenders to finance pre-funded. Pawnbroking is an extremely profitable business and one I understand because my late father was a pawnbroker. This is partly why I decided to invest in Moneything even though it was a new platform and I considered it to be in the high risk category.
Since I started investing Moneything has moved away from its original pawnbroking loans in favour of property and development bridging loans, grouped asset loans and stocking loans consisting of car hire purchase agreements, cars and debentures.
How Can I Contact Moneything ?
UK Tel: 0800-066-3344
When Did Moneything Launch?
Are they regulated?
Yes, by the UK Government’s Financial Conduct Authority under interim permission. FCA regulation is nothing like the FSCS (Financial Services Compensation Scheme). FSCS covers consumers when they deposit money in banks, the FCA does not.
The FCA does have the ability to pursue criminal action against companies which violates its standards. The FCA is not a government entity and it’s funded by the very companies it regulates.
How Do I Sign Up / Any Offers?
Click here to sign up. Currently there are no cashback offers.
Who Can Open An Account?
Anyone who can pass the usual verification identity checks.
What’s The Signup Process Like?
Easy. They run the usual i.d. check, no additional identification needed.
How Are Deposits Made And How Quick Are They Credited?
Deposits are made via bank transfer and usually show up within an hour or two during business hours.
What’s The Minimum Deposit / Investment?
Deposit: No minimum
Loans: No minimum
Does Moneything Offer An Innovative Finance ISA?
Not yet. Once they receive full FCA authorisation they may offer an IFISA.
How Much Interest Does Collateral Pay Lenders / Investors?
Does Interest Accrue Immediately On Loan Purchase Or When the Loan Begins?
Interest accrues immediately on purchase.
When Is Interest Paid?
Interest payments are made throughout the month depending on when borrowers make payments.
Am I Lending To The Moneything Platform Or To Borrowers?
Loan agreements are directly between lenders and borrowers.
What Are The Fees?
Lenders pay no fees.
What Are The Length Of The Loans?
Most loans are six months to one year but some are as long as five years. Loans can renew at the end of term or be paid off early.
What Security Does Moneything Loan Against?
All loans are secured by items such as property, gold, cars, property, debentures, boats, electronics and planes etc. Loan To Values are in the 13-69% range. If the borrower defaults, Moneything or its loan partners can sell the assets to recover lenders money.
What Are The Loan Default Rates?
I’ve never experienced a default and as far as I can tell, Moneything hasn’t had a single default. Moneything doesn’t provide default or late payment statistics on it’s website.
What Is Default Handling Like?
So far I’ve yet to experience a default so I can’t comment.
Is There a Secondary Market?
Yes there is and lenders can sell loan pieces anytime for free. It’s a competitive buying market but selling is extremely easy. Most activity occurs before a new loan goes live.
What Are The Main Risks?
Platform failure: As with every peer to peer company, platform failure presents the greatest risk to lenders. If Moneything were to go out of business, there are many unknowns as to whether lenders capital and interest would be recovered.
Some loan partners have multiple loans: Moneything has a close lending relationship with a small amount of borrowing partners. This means that some borrowers hold multiple loans, thus presenting diversification risk. If a multiple loan borrower defaults, a large proportion of lenders funds could be in jeopardy. This is one of my biggest concerns.
Economic downturns: Since Moneything pays lenders high return rates, this means borrowers are paying even higher interest rates. When economies fail, high interest loan default rates increase and asset values can fall, making recovery challenging.
No default recovery history: Since opening its peer to peer lending doors in 2015, Moneything has yet to experience a default and therefore has no recovery history. When the inevitable default occurs, we have no idea how effective Moneything’s recovery process will be.
Lowering of underwriting quality: If Moneything lowers its underwriting standards, lower quality loans could be presented to lenders. So far Moneything’s loan selections and due diligence have been impressive. I have every faith this will continue.
Is There A Provision Fund?
What Happens if Moneything Goes Bust?
This isn’t clearly explained on their website so I emailed Ed the owner. This is what he said:
“There is a Deed of Assignment (DoA) in place for each loan on the MoneyThing platform. Each DoA contains a Schedule of all investments in that loan, the investor’s name and % they hold. This DoA then explicitly describes how the investors (as listed in the Schedule), have an equitable interest in the underlying security of the loan, the proportion being the % listed in the Schedule. The DoA also stipulates that the investor earns 12% (apportioned) annualised interest for the duration of the loan until such time as the borrower redeems or defaults (and the asset is disposed of to recover the capital & interest).
Thus, in the event that MoneyThing were to go ‘pop’, the administrator/liquidator would have access to these DoA (to be able to pass this onto someone to wind-down the loan book), but crucially that the security behind the loans could not be considered as part of the company assets.”
In reality, no one knows how this would play out and this is all part of the risk of peer to peer lending.
WHAT I LIKE ABOUT MONEYTHING:
The Interest Rate of 10-14%
Rates vary on the types of loans and interest payments are staggered throughout the month. When loans are paid back in full, I have always promptly received capital and interest back as promised.
Loan Security and Low Loan-To-Value (LTV)
Low LTV’s are essential to successful default recovery. Moneything’s LTV’s are usually in the 13-60% range and all loans are backed by physical asset security such as property, cars, jewellery, art and electronics.
The Secondary Market
In December 2015, Moneything introduced their highly anticipated secondary market and it didn’t disappoint. Other platforms have really cocked up their secondary markets by adding premiums and convoluted interest rate calculations. Moneything listened to their customers and nailed their secondary market. The market is very easy to use with no premiums or discounts to confuse things. Have a loan piece you want to sell? Simply click sell, decide how much you want to offload and voila!
Since Moneything is a competitive smaller platform, secondary market activity for buying is limited. Selling however is very easy as there are usually buyers looking to add to their portfolios so loan parts are snapped in minutes or seconds.
Deposits, Payments & Withdrawals
Deposits are made via bank transfer and are usually credited within an hour or two during business hours. Same for withdrawal payments. Kudos to Moneything!
It looks great, is super easy to use and navigate and it just works. Here is the loan dashboard:
If you need help, the Moneything team is lightning quick to respond. This makes handing money to strangers far more palatable. Also the team is open to suggestions and feedback as they truly want to provide customers with an exceptional experience. Big banks could learn a thing or two from Moneything.
WHAT I DISLIKE ABOUT MONEYTHING:
Some Loan Borrowers / Partners Have Multiple Loans
Moneything works with a smaller number of loan introducers and borrowers, resulting in some borrowers holding multiple loans at the same time. If a borrowers defaults on multiple loans, this could be disastrous for lenders. Unfortunately due to Moneything’s limited loan offerings, it can be difficult for lenders to fully diversify. Ideally in the future, Moneything will have many more loan partnerships, giving lenders true diversification.
Loans Don’t Amortise
This means lenders receive monthly interest only payments and the loan principals don’t decrease monthly like on some other platforms. The loan principals is paid back when the loan is paid back in full. This is normal within the pawnbroking business but increases risk, so that’s something you have to evaluate within your risk tolerance.
Infrequent New Loan Offerings
Moneything’s new loan influx can be sporadic and there can be periods of time where no new loans are offered. This has improved recently as Moneything has partnered with new loan partners to introduce new loans. As Moneything’s investor count increases, new loans can create a lender feeding fenzy and loan parts can be snapped up in a matter of minutes. Moneything limits investment amounts per lender for the first 24 hours, so this helps reduce the problem.
If you want to invest, you will usually need to do so at the time the loan is offered because if you wait, small and medium sized loan offerings never last long.
Moneything launched February 2015 so its track record is short.
No Information on Default Rates
The website doesn’t show any statistic information regarding late payments or default rates. So far none of the loans have defaulted.
Moneything is a smaller peer to peer site with a growing loan book. With over 2,300+ registered lenders, competing for loan pieces can be challenging so your bidding trigger finger better be ready as you have to be quick on the smaller loan offerings. When I started investing, there weren’t as many registered investors so I was able to spread my investment over quite a few loans. If I were starting today, I would spread my total planned investment amount over several new loans as they appear. Don’t be tempted to put too much money into a single loan in case of defaults. Also pay close attention to how many current loans borrowers have on the platform.
The Moneything Review Conclusion
After 18 months of lending, I continue to be a huge fan of Moneything and will continue to invest money through their platform. Moneything’s loans offer lenders returns in the 10-14% range, Moneything is a newer platform so I still consider the risk to be high. Currently new loan opportunities are are spread out so this means it can take a while to acquire a diversified loan portfolio. Moneything’s secondary market is excellent and makes selling loan pieces a breeze. The website is very easy to use, deposits and withdrawals are handled at lightning speed and staff communications are top notch.
If you enjoyed my Moneything review and want to learn more about peer to peer lending, click here and receive my complimentary Top 5 Peer to Peer Lending Sites Report.
This unbiased review is for information purposes only and should not be considered investment advice. Opinions expressed in this review are based upon my investing experiences. All information was deemed to be correct at the time of writing. Peer to peer lending contains risks so never invest more than you can afford to lose.