ashtondav
Member of DD Central
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Post by ashtondav on Aug 27, 2018 10:58:43 GMT
At the moment...
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lara
Posts: 345
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Post by lara on Aug 27, 2018 11:14:33 GMT
True. But do you really think they'll remove the ban? I'm not even a little bit hopeful about that!
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Stonk
Stonking
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Post by Stonk on Aug 27, 2018 11:30:47 GMT
I have seen no sign that the ban will be removed. The reversal concerns only the enforced re-investment of repaid capital at Market Rate.
As far as I am concerned, the ban policy is understandable and tolerable, although an imperfect solution to what RS were trying to achieve. Whether it ultimately acts in RS's favour is open to question (we certainly wouldn't have had the Rolling Market matching at over 6% yesterday if the ban was not in place).
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Post by oppsididitagain on Aug 27, 2018 12:11:21 GMT
How do you pull individual loans? You can't , RS will cancel the loans on a last in 1st out basis, so you have to sort all your loans into contract start date order, see the lowest return add up how much money has been lent and work backwards I cancelled my whole rolling book, as most of my rates were below 3% - I've reinvested 20% into the 1year at 4.8 last week and 70% in the 5yrs above 6% still have about 20K waiting to be matched in 5yr. Once my 14 day period is up I will re asses the situation see where the rolling market is and potentially cancel some 5 year loans to reinvest back into rolling.
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lara
Posts: 345
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Post by lara on Aug 27, 2018 12:27:10 GMT
How do you pull individual loans? You can't , RS will cancel the loans on a last in 1st out basis, so you have to sort all your loans into contract start date order, see the lowest return add up how much money has been lent and work backwards I cancelled my whole rolling book, as most of my rates were below 3% - I've reinvested 20% into the 1year at 4.8 last week and 70% in the 5yrs above 6% still have about 20K waiting to be matched in 5yr. Once my 14 day period is up I will re asses the situation see where the rolling market is and potentially cancel some 5 year loans to reinvest back into rolling. Don't forget, you'll be charged 1.5% of your capital for exiting the 5 year market early.
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Stonk
Stonking
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Post by Stonk on Aug 27, 2018 12:38:04 GMT
You can't , RS will cancel the loans on a last in 1st out basis, so you have to sort all your loans into contract start date order, see the lowest return add up how much money has been lent and work backwards I cancelled my whole rolling book, as most of my rates were below 3% - I've reinvested 20% into the 1year at 4.8 last week and 70% in the 5yrs above 6% still have about 20K waiting to be matched in 5yr. Once my 14 day period is up I will re asses the situation see where the rolling market is and potentially cancel some 5 year loans to reinvest back into rolling. Don't forget, you'll be charged 1.5% of your capital for exiting the 5 year market early.
Eek, oppsididitagain, I hope you haven't made the mistake of thinking that the cancellation fee in the 5 Year market is a 1.5% reduction in interest rate ... ? Cancelling loans on the 5 Year market after just 14 days will be prohibitively expensive and instantly loss-making.
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Post by oppsididitagain on Aug 27, 2018 13:00:43 GMT
Don't forget, you'll be charged 1.5% of your capital for exiting the 5 year market early.
Eek, oppsididitagain , I hope you haven't made the mistake of thinking that the cancellation fee in the 5 Year market is a 1.5% reduction in interest rate ... ? Cancelling loans on the 5 Year market after just 14 days will be prohibitively expensive and instantly loss-making.
Mmmm, I'll double check with RS tomorrow I thought they told me it was in interest. Oh well, with the money earning above 6% Im happy to hold it for at least 1year, by then the capital would have been reduced so if you are correct the withdrawal penalty will be less as well. Thanks for pointing that out though :-)
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Post by fiatlender on Aug 27, 2018 13:13:56 GMT
Ratesetter Fees
Market Transfer Fee (% of capital being withdrawn)
Rolling 0.0 1 year 0.3 3 year 1 5 year 1.5
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rscal
Posts: 914
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Post by rscal on Aug 27, 2018 19:23:03 GMT
My thought about some lucky investors bagging 6% in Rolling yesterday is.. will RS stand behind the loan until the borrower actually repays it or can they (as the borrower at one remove) simply choose to repay it as soon as they wish (like next week)? 'Matched' seems to imply that Ratesetter may not intervene since the contract is 'between' a borrower and a designated lender, but on this occasion their margin will have really been squeezed. So what's the official position if anyone can clarify there? Thnx.
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arby
Member of DD Central
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Post by arby on Aug 27, 2018 20:24:23 GMT
Eek, oppsididitagain , I hope you haven't made the mistake of thinking that the cancellation fee in the 5 Year market is a 1.5% reduction in interest rate ... ? Cancelling loans on the 5 Year market after just 14 days will be prohibitively expensive and instantly loss-making.
Mmmm, I'll double check with RS tomorrow I thought they told me it was in interest. Oh well, with the money earning above 6% Im happy to hold it for at least 1year, by then the capital would have been reduced so if you are correct the withdrawal penalty will be less as well. Thanks for pointing that out though :-) At current rates you lose about 3 months of interest by pulling out of the 5 year. Pulling out after a year means you'll have netted ~4.5% interest for the year (slightly more with the repaid capital as you pointed out). Either way, the rate you're moving to has to be very good to be worth the withdrawal penalty.
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Stonk
Stonking
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Post by Stonk on Aug 27, 2018 21:56:38 GMT
My thought about some lucky investors bagging 6% in Rolling yesterday is.. will RS stand behind the loan until the borrower actually repays it or can they (as the borrower at one remove) simply choose to repay it as soon as they wish (like next week)? 'Matched' seems to imply that Ratesetter may not intervene since the contract is 'between' a borrower and a designated lender, but on this occasion their margin will have really been squeezed. So what's the official position if anyone can clarify there? Thnx. We'd all love to know the answer to this!
Around a year ago, rates on the 5 Year market were steadily climbing to higher and higher highs, so I acquired many loans across a range from 6.0% to 7.9%. Then rates quickly dropped back to normal levels. About a half of those loans have since repaid early -- some very quickly, including one just a few days after its creation. I had the strong impression that this was RS "playing games" (i.e., paying me off and re-funding the loan at a lower rate), rather than the actual borrower repaying. However, the loans that repaid were not necessarily the ones at the highest interest rates, suggesting otherwise.
It's an interesting question, and one for which I doubt we'll hear an "official position"! But if you got a 6% Roller, cross your fingers and it may well live long.
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tyrex
Posts: 78
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Post by tyrex on Aug 27, 2018 22:19:30 GMT
My thought about some lucky investors bagging 6% in Rolling yesterday is.. will RS stand behind the loan until the borrower actually repays it or can they (as the borrower at one remove) simply choose to repay it as soon as they wish (like next week)? 'Matched' seems to imply that Ratesetter may not intervene since the contract is 'between' a borrower and a designated lender, but on this occasion their margin will have really been squeezed. So what's the official position if anyone can clarify there? Thnx. We'd all love to know the answer to this!
Around a year ago, rates on the 5 Year market were steadily climbing to higher and higher highs, so I acquired many loans across a range from 6.0% to 7.9%. Then rates quickly dropped back to normal levels. About a half of those loans have since repaid early -- some very quickly, including one just a few days after its creation. I had the strong impression that this was RS "playing games" (i.e., paying me off and re-funding the loan at a lower rate), rather than the actual lender repaying. However, the loans that repaid were not necessarily the ones at the highest interest rates, suggesting otherwise.
It's an interesting question, and one for which I doubt we'll hear an "official position"! But if you got a 6% Roller, cross your fingers and it may well live long.
I can definitely see loan repayment & re-funding at a lower rate being a temptation for RS, and difficult for lenders to subvert. Doing it 'randomly' but with an overall intention to improve margin would make it difficult to prove, and given the size of the loan book this would be an easy process to run occasionally. I guess the only counter would be for lenders to leave their reinvestment settings as Holding Account or a manual high reinvestment rate, this might make them think twice as there would be no guarantee money would stay in the platform if they kept repaying lenders in this way.
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sl75
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Post by sl75 on Aug 28, 2018 6:59:33 GMT
I can definitely see loan repayment & re-funding at a lower rate being a temptation for RS, and difficult for lenders to subvert. Doing it 'randomly' but with an overall intention to improve margin would make it difficult to prove, and given the size of the loan book this would be an easy process to run occasionally. I guess the only counter would be for lenders to leave their reinvestment settings as Holding Account or a manual high reinvestment rate, this might make them think twice as there would be no guarantee money would stay in the platform if they kept repaying lenders in this way. It would also presumably depend on auditors and/or regulators also turning a blind eye to such shenanigans (just because WE don't get to peek inside the "black box" doesn't mean that nobody else does...)
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rscal
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Post by rscal on Aug 28, 2018 7:50:46 GMT
I could not see anything in the current Investor terms saying how matching for the term of the loan actually works but I might have missed where it does.
Going by their notice of 1st May announcement, it appears they may not just step-in, since
"from 6 June 2018, when your investment is matched to a borrower it will remain matched to that borrower, at the same rate of interest, until that loan is repaid."
Thus they appear to have painted themselves into a corner there but, again, where is this actually written into our T&Cs eh?
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Aug 28, 2018 7:53:44 GMT
Eek, oppsididitagain , I hope you haven't made the mistake of thinking that the cancellation fee in the 5 Year market is a 1.5% reduction in interest rate ... ? Cancelling loans on the 5 Year market after just 14 days will be prohibitively expensive and instantly loss-making.
Mmmm, I'll double check with RS tomorrow I thought they told me it was in interest. Oh well, with the money earning above 6% Im happy to hold it for at least 1year, by then the capital would have been reduced so if you are correct the withdrawal penalty will be less as well. Thanks for pointing that out though :-) No need to wait, just go to RYI for a withdrawal quote and you will see the 1.5% listed as a fee. HtH
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