09dolphin
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Post by 09dolphin on May 8, 2018 3:07:09 GMT
I suggest that on 5th June everyone who is not happy to lend at the market rate withdraws all money from the Rolling Market into their holding account and then makes decisions about how they manage their deposits.
Personally I will probably move to the 1 year market until RS decide if they really want to allow people to only reinvest in the Rolling Account at the market rate. If there is no change after 6 months I doubt if I'll even consider reinvesting at the market rate as the returns will be too poor and, as has been mentioned by others, AC's interest rates are significantly better for a minimally greater risk.
As it is anticipated that the bank rate will increase this year we have to wonder why RS has taken what appears to be a perverse decision.
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TheDriver
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Slightly bonkers
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Post by TheDriver on May 8, 2018 7:16:42 GMT
A query for someone who currently uses the market rate on the rolling market. If your money doesnt match immediately, can you go in and change the rate either up or down of the unlent money on the market? Yes, you can. True that you can now, but it is unclear whether that will continue under the new system. The blurb states that repayments can be reinvested at market rate, but the "Fair Usage" delay only mentions withdrawn funds so it would seem the choice will remain - but will it be an option, or will the entry have to be cancelled, and then be considered a withdrawal from the market thus triggering the delay - RateSetter ? A couple of other points occur to me: 1. Reinvesting monthly repayments (while the underlying loan decreases) will result in accounts becoming cluttered with dozens of small lendings; when starting on RS I quickly changed my 5yr settings of monthly repayments to holding account so I could aggregate them; and will the RS system cope with the magnitude increase of loan parts? 2. How will the interest rate of the reinvestment queue vary? Will the rate for the whole queue be revised each day that the market rate changes? (and I can only see it going one way while there is such a funding surplus!)
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jlend
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Post by jlend on May 8, 2018 7:17:13 GMT
One solution to this decision by Ratesetters to remove the ability of customer / investors to "set the rate"?
Divert all sums becoming due by way of capital and interest on this months Rolling Market to your Holding account, thus reducing the amount available to RS to lend. If enough of us did this it might just start to make rates increase.
If rates continue to decline cash can be removed without any delay from Holding.
I have no intention of lending cash under the heading of a Rolling market only to find I am in fact locked in to a 5 year loan without being told.
Absurd business decision by RS and takes away their unique selling point which brought me to their p2p site in the first place. According to the post from jlend above you won't be able to divert repaid capital to the holding account, only interest. This effectively means that all capital invested in rolling from tomorrow will be automatically re-invested at market rate as the repayments will be after 6th June. Yep. That is certainly my understanding of what they are currently planning to do. If anyone hears differently, let me know....
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puddleduck
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Post by puddleduck on May 8, 2018 7:35:48 GMT
According to the post from jlend above you won't be able to divert repaid capital to the holding account, only interest. This effectively means that all capital invested in rolling from tomorrow will be automatically re-invested at market rate as the repayments will be after 6th June. Yep. That is certainly my understanding of what they are currently planning to do. If anyone hears differently, let me know.... Having read the 'Simplifying the market' notes I don't think they are saying this at all. I can see something that says: 'Capital reinvestment all at Market Rate' -> Yes, which confirms that the ability to change rates has been removed, but I do not equate that with no longer being able to send the money to the holding account as an alternative. I think your understanding is wrong here - or I could be, but I don't see why you think this given what is written? www.ratesetter.com/blog/article/simplifying-the-rolling-market
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Post by bagsy on May 8, 2018 9:33:24 GMT
One of the responses in the Q&A below the blog article on the change seems to confirm that you can't have the monthly capital put back into your Holding account (just the interest) so this would suggest if you want the capital back you would have to do the withdrawal process.
"Will i still be able to set my account to withdraw the regular interest and capital repayments borrowers automatically or will the capital repayments always get reinvested?
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RateSetter Mod JLend • 4 days ago
You will be able to direct interest back to your holding account, but capital repayments will be automatically reinvested.
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Blobimuss RateSetter • 3 days ago
Can I choose NOT to have capital repayments automatically reinvested?
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RateSetter Mod Blobimuss • 9 minutes ago
Hi Blobimuss, no, all capital repayments will be reinvested at the prevailing Market Rate, but it will be possible to return interest earned to the Holding Account and it will remain fee-free to access to capital invested in the Rolling market (as now, access will be subject to us being able to transfer loan contracts to another investor)."
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Post by investor1925 on May 8, 2018 9:38:20 GMT
Extract from RS justification statements:-
Our customers have told us that they would prefer less volatility in the Rolling market rates. By simplifying some of the features of the Rolling market we are aiming to make it more stable and predictable.
Automatic reinvestments at Market Rate will result in continuous earnings for all. Currently more than 93% of RateSetter investors reinvest at the market rate and therefore we have decided to withdraw the option of selecting a bespoke rate for reinvested money in the Rolling Market.
Well they would say that. Being one of the 7%, I was happy with it the way it was, so would never tell them anything.
Its a popular misconception (excuse) when deciding to change things. Those who are not happy will ask for changes or complain. Those who are happy with the status quo won't even mention it. Net result is that they only get complaints so use this as an excuse to change it.
At the moment, with £19 million on the rolling today, rates aren't going up, so I'm pulling mine out will just keep an eye on it. If rates go up past 3.5% I may consider investing again. I've just pulled £2.5k today & told them why in no uncertain terms. The rest will be out by May 25th
Hasta la vista baby
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happy
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Post by happy on May 8, 2018 11:22:51 GMT
What a totally dumb move by RS. Forced reinvestment of Rolling capital repayments back into Rolling at whatever the market rate is an unfair restriction and just confuses things beyond belief, this does not happen on the other markets.
IMHO this move is aimed squarly at mitigating the maturity transformation risk of Rolling for RS and has nothing to do with simplifying the market for investors.
Bad Move, All reinvestment turned off, if I want 5 year investment in predominantly retail lending I would rather put my money in LendingWorks at 6%.
Bye bye RS!
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jlend
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Post by jlend on May 8, 2018 11:50:37 GMT
It does seem unfair they are not allowing automatic withdraws of capital repayments to the holding account as they do with the 1 year and 5 year accounts.
It feels like an unfair contract term to force re investment at the market rate which is not done elsewhere.
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Post by propman on May 8, 2018 15:31:14 GMT
Apologies if the above was said at beginning of the thread...
I would expect that the move is designed to stop people setting "My rate" above the likely MR to catch increases in the rate. these can be significant on days when a ot of roll overs happen (eg beginning of week). For some tie this was keeping the MR above the 1 year rate. When the money at a given rate is high, there is always money invested below this band to get it lent out. I believe (unsubstantiated) that MR is always rounded down. As a result, if there is any money lent below MR and not all MR money is lent out, MR drops. With no "My Rate", this is likely to happen on the mjority of repayment days. So long as a significant amount stays on the market, this only leaves those prepared to watch the market to lend above MR. This leads to cash drag that is significant for manually reinvested rolling funds. As a result the majority will be at MR and this will be reduced.
JMHO
- PM
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ashtondav
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Post by ashtondav on May 8, 2018 16:10:24 GMT
Simples. AC for instant or one month money.
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jayjay
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Post by jayjay on May 8, 2018 17:19:26 GMT
I am not sure I fully understand the implications of this but it seems bad news.
To me it looks as if anything on the rolling market that matures after the 6 Jun will have its capital locked in perhaps for five years particularly if you happen to get a bad rate or rates subsequently rise.
I find 5.1% for the five year market too low for the risk - why would I suddenly chose to lend at 3.1% for effectively the same loan? The rolling rate was lower because you get your money back in a month in normal conditions. This change seems to abolish this.
I have curtailed all my future investments in RS till I get clarification.
I am fearful that this new regime started TODAY because anything going into the rolling market today will mature under the new rules. Is this true?
Have I missed something?
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jlend
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Post by jlend on May 8, 2018 17:25:20 GMT
I am not sure I fully understand the implications of this but it seems bad news. To me it looks as if anything on the rolling market that matures after the 6 Jun will have its capital locked in perhaps for five years particularly if you happen to get a bad rate or rates subsequently rise. I find 5.1% for the five year market too low for the risk - why would I suddenly chose to lend at 3.1% for effectively the same loan? The rolling rate was lower because you get your money back in a month in normal conditions. This change seems to abolish this. I have curtailed all my future investments in RS till I get clarification. I am fearful that this new regime started TODAY because anything going into the rolling market today will mature under the new rules. Is this true? Have I missed something? You can and will still be able to sell out fee free assuming there is sufficient lender demand. But you are right, you can get matched against a 5 year loan on the rolling market at the market rate which has been as low as 2.2 percent recently.
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rscal
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Post by rscal on May 8, 2018 17:50:54 GMT
I am fearful that this new regime started TODAY because anything going into the rolling market today will mature under the new rules. Is this true? Have I missed something? If you go to the 'Your Portfolio' tab in the left-hand menu and set your 'current' repayments screen to 'Jun 2018' you will see all loan repayments due in that date range. Currently, all the 'Rolling' loans created up to today's date are showing as repayable in full for me. I don't think these 'Rolling' loans will cease immediately tomorrow (current Terms and Conditions anyone?) but at the ealiest on 8th June itself.
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mary
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Post by mary on May 8, 2018 18:22:17 GMT
Apologies if the above was said at beginning of the thread...
I would expect that the move is designed to stop people setting "My rate" above the likely MR to catch increases in the rate. these can be significant on days when a ot of roll overs happen (eg beginning of week). For some tie this was keeping the MR above the 1 year rate. When the money at a given rate is high, there is always money invested below this band to get it lent out. I believe (unsubstantiated) that MR is always rounded down. As a result, if there is any money lent below MR and not all MR money is lent out, MR drops. With no "My Rate", this is likely to happen on the mjority of repayment days. So long as a significant amount stays on the market, this only leaves those prepared to watch the market to lend above MR. This leads to cash drag that is significant for manually reinvested rolling funds. As a result the majority will be at MR and this will be reduced.
JMHO
- PM If, as claimed 93% of Lenders have already pre-selected MR, then its fairly irrelevant what the other 7% do as RS have achieved lending at the rate determined by the "market". The 7% either are sitting waiting (at zero interest) and providing a useful buffer for RS or only pilling in when they see an opportunity, which RS need as demand is high and supply low,. In the new scheme there is no "My Rate", RS just get to set it, I assume it will be both low and unchanging, except when enough Lenders withdraw, which will likely be a fair while given the excess of supply vs demand at present. I also think that you have the option to not Rollover at each 30 day period, provided there is a Lender willing to step in, but this has not been sufficiently clarified.
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amphoria
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Post by amphoria on May 8, 2018 18:31:03 GMT
I am fearful that this new regime started TODAY because anything going into the rolling market today will mature under the new rules. Is this true? Have I missed something? If you go to the 'Your Portfolio' tab in the left-hand menu and set your 'current' repayments screen to 'Jun 2018' you will see all loan repayments due in that date range. Currently, all the 'Rolling' loans created up to today's date are showing as repayable in full for me. I don't think these 'Rolling' loans will cease immediately tomorrow (current Terms and Conditions anyone?) but at the ealiest on 8th June itself. Despite what I said in my post yesterday, I now believe that only money invested after 5th June will be subject to the new Ts & Cs. This was reinforced by a response in the Q&As below the blog entry. Also they are saying that the new Ts & Cs will not be sent to investors until 1st June. I made a small investment in the rolling market today hoping to shed some more light, but the loan repays on 5th June (ie. after 28 days rather than 30). I don't know whether this is deliberate or just a coincidence. Does anyone have a loan made today that repays after 5th June?
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