ashtondav
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Post by ashtondav on Jan 30, 2019 9:43:16 GMT
is hovering around 120% coverage at the moment according to the coverage thread on this board. Last summer it hovered around 125%. As far as I know it has never, in the last few years, hovered around the upper target of 150%.
so at what level of coverage would you start to sell up? I’m thinking 110%. Anymore for anymore - or any less?
i guess the problem will be that there won’t be any takers when I wish to transfer my loans. Or I could use it as a signal to quit my AC Quick Access Account...
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benaj
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Post by benaj on Jan 30, 2019 9:53:17 GMT
I think RS has lots of tricks if PF interest coverage falls below certain level. IIRC, that 8% 5 year loan was repaid pretty quickly this January. Capital coverage is over 200%.
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Post by gravitykillz on Jan 30, 2019 10:15:23 GMT
Im planning to sell up within 2 weeks
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aju
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Post by aju on Jan 30, 2019 10:50:19 GMT
I think RS has lots of tricks if PF interest coverage falls below certain level. IIRC, that 8% 5 year loan was repaid pretty quickly this January. Capital coverage is over 200%. Interesting comment benaj, can you elaborate on the 8% loan issue a little perhaps. How might that help the PF fund if it does at all, just curious as usual!
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benaj
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Post by benaj on Jan 30, 2019 11:03:15 GMT
I think RS has lots of tricks if PF interest coverage falls below certain level. IIRC, that 8% 5 year loan was repaid pretty quickly this January. Capital coverage is over 200%. Interesting comment benaj , can you elaborate on the 8% loan issue a little perhaps. How might that help the PF fund if it does at all, just curious as usual! Every time a big chunk of loan repaid, the rate plummets due to reinvestment settings.
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cb25
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Post by cb25 on Jan 30, 2019 11:17:47 GMT
Im planning to sell up within 2 weeks Why specifically?
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aju
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Post by aju on Jan 30, 2019 13:01:08 GMT
Interesting comment benaj , can you elaborate on the 8% loan issue a little perhaps. How might that help the PF fund if it does at all, just curious as usual! Every time a big chunk of loan repaid, the rate plummets due to reinvestment settings. Oh I see what you mean, I think, but isn't that just a function of their engine perhaps. Having more experience over at Zopa towers - not inside I grant you, it seems that the engine compensates for my loans where a sudden number of 2% loans, or worse 1% loans, by making my next tranche a lot higher. This seems to average out to the posted expected rates. In RS its a bit harder to see this, well at the moment as I am quite new and relend loans are just starting to kick in. That said I am setting my own loan rates where I can get >6.0% at present. I do see the pattern you are describing though it does seem that rather than a leaky bucket, the whole bottom of the bucket falls out at certain times of the day. Thing is though isn't there an average 2M pound a day being lent out so I wonder if their engine needs to be stabilised a bit better. Sorry to those in the know if I'm talking balony as I am just guessing in all this and I'm guessing also that RS like Zopa doesn't like us dabblers to know the best way to game their systems anyway.
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wapping35
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Post by wapping35 on Jan 30, 2019 17:35:21 GMT
Given the coverage ratio is now down to 120% it will be interesting to see how the Q4 2018 review impacts things.
It is usually processed around the middle of Feb and often it is a 4-5% change (obviously it could be +ve or -ve).
W35
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ashtondav
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Post by ashtondav on Jan 30, 2019 17:44:57 GMT
Based on the high levels of personal insolvencies (the highest in seven years) I bet the coverage will go dooooooooooooown...
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wapping35
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Post by wapping35 on Jan 30, 2019 17:53:16 GMT
I should say because of the big changes on the quarterly reviews I would look to withdraw when the ratio goes below 115/114%.
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ashtondav
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Post by ashtondav on Jan 31, 2019 9:53:44 GMT
Interesting. I consider the RS PF as being one of the few statistical bellweather forward indicators for p20p bad debt. I too will start selling on various sites at 115% and attempt bail out if 110% is approached for a few weeks...
regardless of use it is a very good indicator and I can’t think of a better one for p2p consumer debt defaults - except official figures of course.
RS conspicuous failure to achieve coverage rates toward the higher end of their target is also interesting. From the stats in the coverage thread 125%ish is the best we can hope for - and that in a full employment economy!
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robski
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Post by robski on Jan 31, 2019 11:25:18 GMT
I would say yes but
Personal loans are still widely available at 3%, whilst I know this isn't the likely people borrowing from RS they have to compete in the marketplace. I don't think there is much opportunity to push the fund higher, whilst I would like to see 150%, who wouldn't, I would be more worried if I saw continual degredation. It was what 112/113% for quite a while so its not like its been unable to move back up.
Personally I only invest in 5 year. I have in all 4 previously, and still have a 3 year portfolio running down, rolling for me when it changed pays too little. I prefer 5 year, with a 2.5% or so margin you dont need to be in 5 year for that long to make it worth paying the fee to sell out. If the fund started falling to dangerous levels I would stop reinvesting first, you would get over 1/60th back each month (as loans are at various stages), and thats ignoring early repayments/default PF payments.
People bailing will only push rates up supply vs demand, so again moves the risk profile as the rates go up. Plus the plan of "skimming" interest to keep the fund topped up feels preferable to me than a lottery type approach in regards who loses and who wins.
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