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Post by jacqueline on Dec 3, 2017 20:19:05 GMT
Hi all
I've actually been investing in Lendy for a couple of years now - only a couple of thousand at a time - but I'm slightly ashamed to say I don't understand every element of the website, and don't find its explanations easy to follow (I'm new to investing).
So, quick question: When a loan has a minus number next to the number of days left, do you still accrue interest on that loan? I don't think you do, but just checking. If you don't, then is the idea that you sell that loanpart before it runs out if you can? (of course this might not be successful).
Any elaboration on this matter would be most appreciated!
Best wishes
J
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KoR_Wraith
Member of DD Central
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Post by KoR_Wraith on Dec 3, 2017 21:24:38 GMT
Each loan has an agreed date by which the lender aims to repay the loan. Number of days left = number of days until that agreed date. When the number goes negative it means the repayment/settlement of the loan is overdue (eg. -10 days = the loan was scheduled to be settled 10 days ago but settlement funds have not been received).
Overdue loans continue to accrue interest until their eventual settlement. Overdue loans can potentially run months beyond their agreed end dates, accrue interest, and pay off in full. However, they can also enter into administration/repossession, and fail to repay enough to cover the original capital (and none of any interest owed). Examples between both extremes exist.
Generally people prefer loans with a large number of days left to run as it potentially gives them the opportunity to sell out of the loan a reasonable amount of time before the settlement date, thus avoiding the risk of a borrower defaulting on a loan which they hold.
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elliotn
Member of DD Central
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Post by elliotn on Dec 4, 2017 4:17:17 GMT
Hi all I've actually been investing in Lendy for a couple of years now - only a couple of thousand at a time - but I'm slightly ashamed to say I don't understand every element of the website, and don't find its explanations easy to follow (I'm new to investing). So, quick question: When a loan has a minus number next to the number of days left, do you still accrue interest on that loan? I don't think you do, but just checking. If you don't, then is the idea that you sell that loanpart before it runs out if you can? (of course this might not be successful). Any elaboration on this matter would be most appreciated! Best wishes
JSure the others answered, interest accrues (IA status) after loan repayment due date for a tolerance period of 180 days (unless the credit committee deem recoverabilty materially impaired before this). There is also a bonus accrual running at half the monthly interest rate for this period to compensate for the additional risk (only payable if you hold the loan part when the loan redeems overdue, interest can be caught up with extensions to positive days interest paid). Order of priority for repayment of overdue loans is capital, accrued interest and then the bonus; any shortfall on sale might be recovered by guarantees or debentures etc depending on supplementary security although this might not be a quick outcome. The provision fund is discretionary and may not be able to cover all shortfalls. Lots of faq on the website that you should take the time to read to understand the risks.
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Post by jacqueline on Dec 4, 2017 15:43:29 GMT
Thank you for your replies. Just to be clear - do I get paid the interest on the loan for the period that I am investing in it, or am I awarded this upon the loan being paid back? I'm confused because previously, I seemed to be getting interest every month for my loans but now I don't... is that because they are waiting to complete and I'm selling them in the meantime? (sorry, realise this is a silly question - which is why it isn't covered in the FAQ!)
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Post by GSV3MIaC on Dec 4, 2017 15:46:49 GMT
You get interest at month end for loans in status 'ioa', interest on account. For all other loans you get interest as/when/if they finally repay. Unless Ly changes the rules, again.
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Post by skint4achange on Dec 4, 2017 16:05:24 GMT
Thank you for your replies. Just to be clear - do I get paid the interest on the loan for the period that I am investing in it, or am I awarded this upon the loan being paid back? I'm confused because previously, I seemed to be getting interest every month for my loans but now I don't... is that because they are waiting to complete and I'm selling them in the meantime? (sorry, realise this is a silly question - which is why it isn't covered in the FAQ!) Just a quick note for you, when you are selling your loan parts, you stop earning interest from the moment you put them up for sale. Lendy steal use the money to combat the cost of administration/operating the SM? 
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zlb
Member of DD Central
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Post by zlb on Dec 4, 2017 22:09:25 GMT
If projects are in negative time, that means they have overrun, but apparently that event is common in this business. The main factor if a problem arises with a borrower or project, is to regain your capital investment from the project (or have judged when to sell out of it). L have apparently put enhanced procedures in place (Due Diligence such as insured valuers) after some mistakes in DFLs. L also appear to be keen to repay capital and deferred interest but there are some projects which will be the first test of this, at the moment. (I'm not sure what happens if a project were mis-valued and what would prove that).
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Post by investor1925 on Dec 5, 2017 8:51:12 GMT
If projects are in negative time, that means they have overrun, but apparently that event is common in this business. The main factor if a problem arises with a borrower or project, is to regain your capital investment from the project (or have judged when to sell out of it). L have apparently put enhanced procedures in place (Due Diligence such as insured valuers) after some mistakes in DFLs. L also appear to be keen to repay capital and deferred interest but there are some projects which will be the first test of this, at the moment. (I'm not sure what happens if a project were mis-valued and what would prove that). Sadly, there are a lot of negative inferences to Lendy (& other) P2P platforms, but then its all about risk & reward. Yes, projects are delayed, refinance or sales take longer than anticipated, and some defaults occur. Its all about what the platform does with these. I've never lost a penny with Lendy & the only default that ended up as a repossession that I can remember, was A******* garden centre, & they covered that with the provision fund. You have a choice at the moment: Put your money in a 100% guaranteed bank & get 1-2p per £1 invested, or use P2P & get up to 15p, with the risk that defaults will lower that, but it will still be well above the bank's offerings.
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Post by Deleted on Dec 5, 2017 9:10:10 GMT
You have a choice at the moment: Put your money in a 100% guaranteed bank & get 1-2p per £1 invested, or use P2P & get up to 15p, with the risk that defaults will lower that, but it will still be well above the bank's offerings.I'm not sure you can say that. A bank will guarantee the capital up to £75k, these loans do not guarantee the capital at all. In some years I have lost money with P2P in some portals
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Post by GSV3MIaC on Dec 5, 2017 12:19:07 GMT
It's £85k now (the number is/was pegged in Euros).
But yeah, 'me too' .. quite glad my ReBS and LC lending was outside an ISA this last 12 months so I can get my losses offset against tax (prior years were vaguely profitable, mostly thanks to bonuses etc).
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Post by skint4achange on Dec 5, 2017 13:28:03 GMT
You have a choice at the moment: Put your money in a 100% guaranteed bank & get 1-2p per £1 invested, or use P2P & get up to 15p, with the risk that defaults will lower that, but it will still be well above the bank's offerings.I'm not sure you can say that. A bank will guarantee the capital up to £75k, these loans do not guarantee the capital at all. In some years I have lost money with P2P in some portals What do you mean, "I'm not sure you can say that"? Of course he can! How many banks offer you between 8% & 12% on unlimited deposits? The best you can get right now is 5% but that is only on a meagre £500 PCM.
Nobody has said your money is safe, we all know it is risk and reward. If you don't feel confident in your decisions on where your money is invested, put it in a deposit account in a bank and see it devalued by inflation.
You say you have lost "In some years", but you don't mention how you have done in other years. I assume you didn't lose or you wouldn't still be investing in P2P (You also don't say what platforms you lost on).
Weight it up, take your chances, understand the risks. Nobody has a gun to your head, if you don't want to invest, don't.
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Post by GSV3MIaC on Dec 5, 2017 15:00:31 GMT
I believe @bobo was pointing out that the comment "that defaults will lower that, but it will still be well above the bank's offerings. " (my bold, red etc) is not guaranteed to be true (the normal meaning of 'will').
"Will probably be', yep, we'll all sign up to that, which is why we are here.
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Post by skint4achange on Dec 5, 2017 15:02:55 GMT
Maybe the word "Should" would have been more accurate then?  |
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mikes1531
Member of DD Central
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Post by mikes1531 on Dec 10, 2017 19:26:27 GMT
There is also a bonus accrual running at half the monthly interest rate for this period to compensate for the additional risk (only payable if you hold the loan part when the loan redeems overdue, interest can be caught up with extensions to positive days interest paid). : The above may be how Lendy say the bonus accrual is supposed to work but -- in keeping with Lendy's long established tradition of moving goalposts -- isn't the way they always operate. I invested in PBL142 when it was overdue, showing a negative term remaining, and showing an amount of bonus accrual. Some time after that, the loan was repaid. There was no extension for that loan. (It was replaced by another Lendy loan.) When it repaid, PBL142 still was overdue, showing a bigger negative term remaining, and showing a larger amount of bonus accrual. Lendy did not pay any of the bonus accrual shown on that loan. Lendy misled me. 
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