Moneything Peer To Peer Lending Review
** Moneything review updated February 21st, 2018 **
Read my comprehensive unbiased Moneything review highlighting my experiences after more than two years of lending. See why it remains in my top five peer to peer lending choices.
Would I recommend dipping your toes in the Moneything waters? Yes, once you know the risks and understand the feast or famine that accompanies peer to peer lending. Moneything is a smaller company with a growing loan book. Moneything pays lenders 10-14% annual returns on loans secured by cars, property and rolling asset groups. For lenders’ who are willing to take more risk for higher returns from a company with great customer service, Moneything is a popular choice.
My January 2018 Allocation: Unchanged
My annual rate of return: 11.4% Net return after bad debt and fees but before tax)
|Est. Annual Returns:||10% - 13%
|Recent Return Rate Trend:||⬅➡|
|My Risk Rating *:|
|Loan Types:||Property development, pawn, managed portfolios|
|Loan Security:||Property, cars, jewellery, equipment|
|Time to Become Invested:||Slow|
|Time Needed Managing:||Low|
|Lending Agreements With:||Borrowers|
|Cashback Offer:||No current cashback offers|
* This opinion risk rating factors in types of loans offered, interest rates, platform history, default numbers and my own investing experience. My risk rating explained.
The Moneything Review: What You Need To Know
- Competitive interest returns for lenders
- Diversified selection of secured loans
- Secondary market to buy and sell loans / no premiums
- No secondary market markups / all loans bought and sold at par
- 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
- Increasing property loan defaults with no history of recovery
- Multiple loans to same borrowers increases risk
- New loan offerings have been slower recently
- Less default handling history
- No website statistics page showing default rates
Moneything: My experiences so far….
I have been investing through Moneything since June 2015 and my experiences have been good. It continues to be one of my preferred peer to peer lending platforms. Moneything has a great secondary market for buying loans, however, selling of some loans can be slow based on supply and demand. Defaults have been increasing recently so I’m keeping a watchful eye on default recovery effectiveness. The website is very easy to use and deposits and withdrawals are handled swiftly. Recently I’ve noticed new loan offerings have become scarce but this happens as competition grows between different peer to peer companies trying to attract new borrowers.
What Is A Moneything?
Moneything began as an 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 through Moneything even though it was a new platform and I considered it to be in the high-risk category.
Since I started investing through Moneything, they have moved away from the original pawnbroking loan model 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 full permissions. 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?
Moneything runs the usual i.d. checks however some readers have reported that a certified passport copy is required. The cost of obtaining the passport copy isn’t covered by Moneything so be prepared for this additional expense.
How Much Time Will It Take To Become Invested?
Moneything has experienced times where new loan supplies are limited. Many readers have complained they are unable to deploy their funds into loans and adequately diversify. At the moment, new loans are intermittent so I withdrew my cash balance but this can change anytime. The secondary market also hasn’t had much for sale other than distressed loans.
How Are Deposits Made And How Quickly Are They Credited?
Deposits are made via bank transfer and usually show up within an hour or two during business hours.
How Quickly Are Withdrawals Processed And Received?
I have received my withdrawals extremely quickly, the last one being processed and credited to my bank account within two hours on a business day.
What’s The Minimum Deposit / Investment?
Deposit: No minimum
Loans: No minimum
Does Moneything Offer An Innovative Finance ISA?
Not yet Moneything is fully FCA authorised and is working on their ISA launch which should be available soon.
How Much Interest Does Moneything Pay Lenders / Investors?
Does Interest Accrue Immediately On Loan Purchase Or When the Loan Begins?
Interest accrues immediately on loan purchase.
When Is Interest Paid?
Interest payments are staggered 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 the 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 attempt to recover and sell the assets to recover lenders’ money.
What Are The Loan Default Rates?
Moneything doesn’t provide default or late payment statistics on its website.
What Is Moneything’s Default Handling Like?
Moneything has started to experience an upswing in loan defaults and while this is unfortunate for both borrower and lenders, it’s completely expected in the higher risk peer to peer lending world. One loan was fully recovered in two weeks while three further defaults will take some time. Currently two of my loans are in default so I will report back as the process continues.
Recently one of Moneything’s bridging loans suffered from construction delays so the issuing loan partner placed the loan into administration while working with the borrower to ensure completion of work. This proactive pre-default approach differs from some peer to peer companies that delay placing a property into receivership.
Is There a Secondary Market?
Yes, there is and lenders can sell loan pieces anytime for free. The secondary market can go from a buyers’ market to a sellers’ market on any given day. Currently, there isn’t much for sale other than distressed loans but it’s possible to buy various loan pieces on the market prior to a new loan going 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 few 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 hasn’t completed a default recovery so I have no idea how effective the process will be.
Valuation errors: Moneything uses third parter surveyor for property valuations. If the surveyor values a property incorrectly, there might be a shortfall in capital and interest recovery if the property needs to be sold in a default event.
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.
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.
Recently, Moneything has begun to experience defaults but its default rate is still low. Moneything’s loan book is still young so this could change as time passes.
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 or decrease liquidity. Have a loan piece you want to sell? Simply click sell, decide how much you want to offload and voila! Demand and supply will differ on a daily basis so selling times will vary.
The secondary market also shows where your sale sits in the queue:
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 helpful. 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.
Updates on live loans has now been added to lenders’ weekly email.
WHAT I DISLIKE ABOUT MONEYTHING:
Younger Company With Less Operating History
Since Moneything has only been operating since February 2015, lenders are taking extra investment risk. The fact is that a high percentage of startup companies fail within five years.
Increasing Property Loan Defaults With Little History Of Property Default Recovery
Moneything has seen an increase in property defaults. As far as I’m aware, Moneything has no history of a successful property default recovery. In peer to peer lending, default recovery is extremely important in order to recoup lenders’ funds. It will be interesting to see how Moneything’s default action progresses.
Increased Competition Slowing Down New Loan Offerings
As the peer to peer lending sector grows, attracting new borrowers can be troublesome, especially for the smaller lending companies. As the various peer to peer companies target the same limited borrower pool, this will mean there are times when new loans are few and far between. This is especially true of the smaller peer to peer lending companies. Sometimes lender patience can run thin when waiting to invest money but patience is the key as I’ve seen many companies experience new loan droughts.
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 borrower 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.
No Information On Default Rates
The website doesn’t show any statistic information regarding late payments or default rates.
When I started investing through Moneything, there were few registered investors so I was able to spread my investments over a diversified number of loans ranging from cars to property. If I were starting today, I would probably be feeling some frustration at the lack of new loan opportunities but patience is the key and it may take several months to become fully diversified on Moneything. I would still aim to spread my total planned investment amount over several new loans as they appear and attempt to buy older loans on the secondary market. Don’t be tempted to put too much money into a single loan as defaults have risen. Also pay close attention to some borrowers as they may have multiple loans. This information is shown in the loan description.
The Moneything Review Conclusion
After more than two years of lending, I continue to support Moneything and will maintain my investments despite the increased loan defaults. Moneything’s loans offer lenders returns in the 10-14% range and while only a small number of loans have defaulted, I still consider the investment risk to be higher. New loan frequency is inconsistent making it difficult for new lenders to invest and become diversified. Moneything’s secondary market makes buying loan pieces a breeze however selling is demand and supply dependent and can sometimes be slow. The overall website is very easy to use, deposits and withdrawals are handled at lightning speed and staff communications are top notch.
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** 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. **