Investing

Lending Loop - peer to peer lending - do due diligence

  • Last Updated:
  • Nov 15th, 2017 3:41 am
Member
Dec 7, 2006
429 posts
73 upvotes
Toronto
jb10071 wrote:
Jul 27th, 2017 8:47 am
Of the lifetime earnings, how much do you get to keep after taxes?
Tax experts may know the exact answer. My understanding is that it is be taxed at my marginal tax rate when I do my taxes for the year.
Member
Apr 22, 2014
413 posts
197 upvotes
Edmonton, AB
They have added an auto-lend feature. It looks pretty cool although I wouldn't use it because I prefer to analyze each loan myself. But it could mean loans get funded quicker.
Deal Addict
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Mar 16, 2010
1538 posts
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Hamilton
Signed up for this today, dropped $200 and I'm getting a call on Wednesday to authorize my accounts. Seems like a cool idea, anyone had any issues with junk loans? The 25% interest rate seems so appealing lol.
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Dec 8, 2010
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Dpack22 wrote:
Aug 31st, 2017 3:19 pm
Signed up for this today, dropped $200 and I'm getting a call on Wednesday to authorize my accounts. Seems like a cool idea, anyone had any issues with junk loans? The 25% interest rate seems so appealing lol.
At least one loan has gone bad, and some go late.

25%? Maybe half that. Anything high rate gets snapped up VERY fast. So, money will be sitting doing nothing if you're holding out for 20%+ loans. They are few and far between.

It's one of those things. It'll be fine til there's a recession, then you'd imagine defaults will go through the roof. Don't put in money you can't afford to lose.

Also remember it's interest income. No dividend credit; it'll be taxed at your full marginal rate.
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Feb 28, 2012
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Vaughan
daverobev wrote:
Aug 31st, 2017 3:45 pm
At least one loan has gone bad, and some go late.

25%? Maybe half that. Anything high rate gets snapped up VERY fast. So, money will be sitting doing nothing if you're holding out for 20%+ loans. They are few and far between.

It's one of those things. It'll be fine til there's a recession, then you'd imagine defaults will go through the roof. Don't put in money you can't afford to lose.

Also remember it's interest income. No dividend credit; it'll be taxed at your full marginal rate.
Exactly. After tax, you're lucky to come away with 8-10%. Maybe less. Lending Loop is a great idea to fund businesses with private money but without any tax breaks, it doesn't make any sense for Canadians at least.
Sr. Member
Nov 13, 2013
714 posts
244 upvotes
OTTAWA
jb10071 wrote:
Sep 4th, 2017 9:48 am
Exactly. After tax, you're lucky to come away with 8-10%. Maybe less. Lending Loop is a great idea to fund businesses with private money but without any tax breaks, it doesn't make any sense for Canadians at least.
Oh the horror only 8 %!
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Feb 28, 2012
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Vaughan
fogetmylogin wrote:
Sep 4th, 2017 11:44 am
Oh the horror only 8 %!
When it's not guaranteed then yes 8% on lending is a TERRIBLE return. Can't believe someone would question that. You can do private lending for a minimum of 10% return, and at least there you're getting some collateral. What security does lending loop provide? Oh the horror.
Member
Jul 27, 2017
489 posts
138 upvotes
GTA
jb10071 wrote:
Sep 4th, 2017 3:32 pm

You can do private lending for a minimum of 10% return, and at least there you're getting some collateral.


This is something new too me

Would you care to share some details on that, how it works, are you presently doing it?
Newbie
Jun 22, 2015
82 posts
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Calgary, AB
fogetmylogin wrote:
Sep 4th, 2017 11:44 am
Oh the horror only 8 %!
your sarcasm shows you don't understand the risks associated with this investment.
Sr. Member
Nov 13, 2013
714 posts
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OTTAWA
osman3500 wrote:
Sep 4th, 2017 3:41 pm
your sarcasm shows you don't understand the risks associated with this investment.
Yes nobody knows the risk of this investment. There is a reason banks won't lend to these people. That said 8% after tax is an excellent return even with a medium degree of risk.
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Feb 28, 2012
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Vaughan
porticoman wrote:
Sep 4th, 2017 3:41 pm


This is something new too me

Would you care to share some details on that, how it works, are you presently doing it?
Well it's called private lending for a reason. Start with your real estate agent. But if he/she does not do large enough volume they won't know. If you know a realtor in your area that pushes a lot of volume they will most likely be able to point you in the right direction.
fogetmylogin wrote:
Sep 5th, 2017 6:30 am
Yes nobody knows the risk of this investment. There is a reason banks won't lend to these people. That said 8% after tax is an excellent return even with a medium degree of risk.
You can buy a house in Ohio for less than 100k that returns close to 8% and there's little to no risk involved in that. When it comes to the lending space, 8% is not good in my opinion and I get that opinions vary. When assessing investments, as the risk goes up, the return has to correlate. I need minimum 15% return to lend to someone the bank is turning down.
Member
Jul 27, 2017
489 posts
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GTA
jb10071 wrote:
Sep 5th, 2017 9:38 am

@ post #252
Thanks for responding

On the "private lending through a RE Agent", I'm guessing you may be indicating or suggesting something such as secured second mortgage?

Is there something more than that such as people that need bridge financing or money to make up the deposit for a down payment?

Have you done the "private lending" yourself, either the RE Agent route or other, any successes you want to share with the RFD community?

I think the P2P lending of a couple hundred dollars is way different than private lending several to tens of thousands of dollars IMO
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Feb 28, 2012
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Vaughan
porticoman wrote:
Sep 5th, 2017 10:05 am
Thanks for responding

On the "private lending through a RE Agent", I'm guessing you may be indicating or suggesting something such as secured second mortgage?

Is there something more than that such as people that need bridge financing or money to make up the deposit for a down payment?

Have you done the "private lending" yourself, either the RE Agent route or other, any successes you want to share with the RFD community?

I think the P2P lending of a couple hundred dollars is way different than private lending several to tens of thousands of dollars IMO
Yes mostly short term bridge lending anywhere from 30 to 180 days. Well you do bring up a great point. There's a big difference between doing a $250 lend through lending loop and a $10,000 lend for bridge financing. I was thinking of bigger amounts in lending loop that didn't justify the risks.
Member
Jul 27, 2017
489 posts
138 upvotes
GTA
jb10071 wrote:
Sep 5th, 2017 10:21 am
Yes mostly short term bridge lending anywhere from 30 to 180 days. Well you do bring up a great point. There's a big difference between doing a $250 lend through lending loop and a $10,000 lend for bridge financing. I was thinking of bigger amounts in lending loop that didn't justify the risks.

When assessing investments, as the risk goes up, the return has to correlate. I need minimum 15% return to lend to someone the bank is turning down.
Good points & good discussion on alternative lending

What do you see is the downside to that type of bridge financing, I'm thinking risk vs reward since there are also zero guarantees on that type of [private lending] $10k bridge financing unless the borrower can come up with minimum $10k of collateral...gold, jewellery etc

Do you know what sort of return folks are getting on the bridge financing/private lending?

Would it also be a single or pooled investment with no upper limit amount?

On US real estate investing in Ohio, couldn't find anything for $10k. Closer to the GTA are properties in Niagara Falls New York. A triplex in fact for $15k, property taxes reasonable for the area

http://www.realtor.com/realestateandhom ... 0847-60246

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