I was reading one of the many fascinating income reports that Eric Gati publishes on his My 4 Hour Workweek site about two years ago when I finally became intrigued in his persistent gushing about how great peer2peer lending was and how he was doing rather well with it. I decided to have a go at it myself, but was quickly shot down when I discovered that the site he recommended – Lending Club – only accepted US citizens.
I decided to have a little search to see if there were any similar sites that would be open to UK citizens, I didn’t have to search long before I came across the website of Encash.
After taking ages to get accepted (I had to fill in forms and send lots of documentation to them via a courier) I decided to start small as I didn’t know if this would work and didn’t want to lose my shirt, so I deposited £10.00 into my account and then set about picking through the list of people looking for a loan that I could donate my £10.00 to.
To be honest I sort of forgot about the site for about a year, but every month I received a small amount of money as part of the £10.00 the lender was paying back, plus a bit of the interest.
Fast forward to March and I received an email informing me that the site is going to stop doing business. The good news was that they would buy all the loans up so nobody who had lent any money would lose anything.
We are writing to advise you that YES-secure.com (Encash) has decided to stop its Peer to Peer lending business by 31 March 2014. From 1 April 2014, Peer to Peer lending will become regulated by the Financial Conduct Authority. Although YES-secure.com has enjoyed offering this service, the number of members we have is relatively small. We have taken the opportunity of the change in regulation to review our business strategy and concluded, with some sadness, not to continue with Peer to Peer lending.
As a result of this decision, we will be paying to you an amount equal to the full amount of any loans due, plus any outstanding YES-secure.com fees (if any), and all interest payable up to the date of payment. According to the Loan Agreement, upon this payment, those loans will be automatically assigned by you to YES-secure.com.
This payment will equal your “Customer Funded Lending Net Balance” plus your “Customer Funded Lending Default Balance”, less any amounts which relate to loans declared default and in connection with which a County Court Judgment has been received against the borrower (as indicated under “Get Status” on your “My Funding Lending Details” page, “Late Payers” tab).
You will see that this means we have included overdue balances, even though the older balances would probably not have been recovered had YES-secure.com continued with its Peer to Peer business. We have also included balances subject to IVAs and already passed to the Collections Agency which again may not be recovered in full.
This payment will be made to the YES-secure.com Client Bank Account, and YES-secure.com will reduce the balance on relevant loans to zero, as it would have done in the event of early full repayment by a borrower. These sums will then be transferred to your Nominated Account within 7 days. In making this payment to your Nominated Account, we will use the bank details you have previously provided to us. In the event that these details have changed, please let us know promptly as otherwise your payment may be delayed and in some circumstances we may not be able to make a payment at all. As a reminder, it is your responsibility to inform us of those changes.
You also have a “My encash Account Balance”, an “Auto Lending Balance” and a “Withdrawal Request Balance” outstanding. These sums will be paid to your Nominated Account in addition to the sum mentioned above.
I am rather sad to see the site close, but when one door closes another opens and I have already signed up to Zopa which seems to be a much larger database of lenders and loan applicants.
Oh, and how much did I make? I invested £10.00 and according to my records I received £0.48 a month and was paid back a grand total of £19.12 (that includes the initial £10.00 I deposited.