thedog
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Post by thedog on Jun 17, 2019 20:00:31 GMT
Isn't that a bit cheeky? Lending out your cash one day and then saying the loan starts the next day?
It does make the calculation work, though, as per propman :
170.34 x ( 1.06 ^ (30/365) - 1 ) is 81.8p
Phew!
I guess at best it would be a half day on the first day probably transactions happen at midnight. Is it that you can't get interest for both the first day and the last day otherwise the calculation for the next month would also get interest on the first day and that would be 2 people getting interest for the same day? I think......
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Stonk
Stonking
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Post by Stonk on Jun 17, 2019 20:25:06 GMT
I guess at best it would be a half day on the first day probably transactions happen at midnight. Is it that you can't get interest for both the day it's lent and the day it's returned otherwise the calculation for the next month would also get interest on the first day and that would be 2 people getting lots of for the same day? I think......
It's pretty standard practice to accrue a day's interest each time midnight passes. Whoever owns the asset at that time accrues the interest. That way, interest is paid for each and every day, and there's no duplication when the asset changes ownership.
For example, banks lend "overnight" to one another (or to a central bank) and earn/charge interest. Money goes one way at close of business, and back again with interest added before start of business the next day. I used to be involved with this. The interest rate is low (currently around 0.67% for GBP) and for only a day at a time, so you'd think it would not be worth doing ... except that the quantities of money can be in the billions. The interest pays for a trader or two!
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aju
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Post by aju on Jun 17, 2019 21:19:55 GMT
Is it that you can't get interest for both the day it's lent and the day it's returned otherwise the calculation for the next month would also get interest on the first day and that would be 2 people getting lots of for the same day? I think......
It's pretty standard practice to accrue a day's interest each time midnight passes. Whoever owns the asset at that time accrues the interest. That way, interest is paid for each and every day, and there's no duplication when the asset changes ownership.
For example, banks lend "overnight" to one another (or to a central bank) and earn/charge interest. Money goes one way at close of business, and back again with interest added before start of business the next day. I used to be involved with this. The interest rate is low (currently around 0.67% for GBP) and for only a day at a time, so you'd think it would not be worth doing ... except that the quantities of money can be in the billions. The interest pays for a trader or two!
those very small numbers at the front end makes me think of the old penny fraud in banks where a member of staff skims off a penny from each account and no one ever notices such small amounts going missing ...
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scc
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Post by scc on Jun 18, 2019 8:33:47 GMT
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Post by propman on Jun 18, 2019 10:44:52 GMT
It may be that the borrower only received the money the next day as it missed the transfer cut off so interest could only be charged from the next day...
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aju
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Post by aju on Jun 21, 2019 7:44:09 GMT
So i'm curious that rolling only shows the current month. Does this mean that it sells/closes the loan after a month and relends it. If that is the case my loan rate at present is 6% which was a chancer when the rates went up last week does that mean if the rates are lower it will take time to relend.
Please be gentle as I guess you can tell I'm still learning the ways of rolling.
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Post by Deleted on Jun 21, 2019 8:13:12 GMT
Assuming it's an amortising loan, the capital is 'relent' at your original rate (6% in your case) - but that's just how it looks, the capital actually remains lent to the original borrower. The month's interest and capital repayment is relent according to your settings (you can relend capital or capital & interest).
If it's non-amortising, the full amount is repaid at the end of the term, as in the 1 year market.
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aju
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Post by aju on Jun 21, 2019 8:55:48 GMT
Assuming it's an amortising loan, the capital is 'relent' at your original rate (6% in your case) - but that's just how it looks, the capital actually remains lent to the original borrower. The month's interest and capital repayment is relent according to your settings (you can relend capital or capital & interest). If it's non-amortising, the full amount is repaid at the end of the term, as in the 1 year market. Thx @inv11 , I checked back and it is amortising. I need to reset my relend settings to make it relend into rolling at the same level and I can control it accordingly if its too high. It should return about £14 capital a month. I'll keep an eye on rolliing and on here in the rolling threads to get the better rates.
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star dust
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Post by star dust on Jun 21, 2019 11:09:39 GMT
Just to confirm really, I think you are correct, it’s a while since I invested in the rolling market too, nearly a year, and I think what changed around September last year was that you could set your own ‘market rate’ for the re-investment of the capital from the rolling market, rather than having it automatically matched to the rolling market rate. I've just looked to make sure I'm still doing the 'right' thing too The t&cs here www.ratesetter.com/investor-terms still say Relevant section highlighted. So as a minimum you have to set a re-investment rate for the capital returning which will be re-lent in the rolling market otherwise it defaults to ‘market rate’ if you don’t. My re-investment in rolling is set to 6% from last year. I’m planning on leaving it at that. AFAIK there is no penalty for cancelling the order and withdrawing the funds returned as a result.
I was quite pleased to find that a couple of the recent 6%+ matches I got were for one year fixed (non-amoritising) terms which won't pay monthly interest, but of course may not last the year.
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aju
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Post by aju on Jul 1, 2019 16:20:52 GMT
So Mrs Aju got some repayments on rolling today but here's the thing. In the transactions files the following records seem at odds. Both loans were formed on the 24th less than a week ago.
Date Item Product Transaction Amount Balance
01/07/2019 O502398686131 Rolling Lend order (£14.74) £2.29
01/07/2019 C617787721969 Rolling Interest £0.01 £17.03
01/07/2019 C617787721969 Rolling Capital repayment £15.16 £17.02
01/07/2019 O502397859368 Rolling Lend order (£32.05) £1.86
01/07/2019 C617787845486 Rolling Interest £0.04 £33.91
01/07/2019 C617787845486 Rolling Capital repayment £33.87 £33.87
Weirdly the amount she received and the amount lent back out seems to not be the same and the balance not yet lent seems to be mounting in holding rather than relent. the loans seem to be changing their names as well.
I'm sure there is a simple explanation for this but it escapes me at present.
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Post by Deleted on Jul 1, 2019 17:16:26 GMT
I think the capital repayment item should be the whole loan (your bottom example: 33.87) - some of this is due to be repaid today and the rest will be 'relent' at the original rate (32.05) (even though that bit was not actually repaid). So the capital repaid today is 33.87-32.05 = 1.82 - this amount will be relent as in your reinvestment settings.
The interest is 0.04 - I suspect this is a loan you've had for less than a month as 5% (say) of £33 for 1 month is around 14p. This may be relent if you've chosen capital and interest in your reinvestment settings.
That's the way I think it works anyway!
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thedog
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Post by thedog on Jul 1, 2019 18:04:31 GMT
So Mrs Aju got some repayments on rolling today but here's the thing. In the transactions files the following records seem at odds. Both loans were formed on the 24th less than a week ago.
Date Item Product Transaction Amount Balance
01/07/2019 O502398686131 Rolling Lend order (£14.74) £2.2901/07/2019 C617787721969 Rolling Interest £0.01 £17.0301/07/2019 C617787721969 Rolling Capital repayment £15.16 £17.02
01/07/2019 O502397859368 Rolling Lend order (£32.05) £1.86
01/07/2019 C617787845486 Rolling Interest £0.04 £33.91
01/07/2019 C617787845486 Rolling Capital repayment £33.87 £33.87 Weirdly the amount she received and the amount lent back out seems to not be the same and the balance not yet lent seems to be mounting in holding rather than relent. the loans seem to be changing their names as well.
I'm sure there is a simple explanation for this but it escapes me at present.It's an "amortising" loan meaning that the capital is gradually repaid over the life of the loan not in a single amount at the end. I think most (all??) Rolling RS loans are amortising to some degree and as you say the returned capital goes into your holding account. Think of it like a repayment mortgage where you pay off capital gradually through the life as opposed to interest-only where the capital is a lump at the end. Not sure exactly how RS structure their loans but you may well find the capital returned * number of payments remaining equals the capital currently outstanding. (If it's less with a lump sum remaining that's what is technically called a "balloon" repayment as the capital has deflated over time but not entirely).
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aju
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Post by aju on Jul 1, 2019 18:11:21 GMT
I think the capital repayment item should be the whole loan (your bottom example: 33.87) - some of this is due to be repaid today and the rest will be 'relent' at the original rate (32.05) (even though that bit was not actually repaid). So the capital repaid today is 33.87-32.05 = 1.82 - this amount will be relent as in your reinvestment settings. The interest is 0.04 - I suspect this is a loan you've had for less than a month as 5% (say) of £33 for 1 month is around 14p. This may be relent if you've chosen capital and interest in your reinvestment settings. That's the way I think it works anyway! That makes sense, as you say it was not a full month in fact 24th was the day it was originally formed/started.
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aju
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Post by aju on Jul 1, 2019 18:12:49 GMT
So Mrs Aju got some repayments on rolling today but here's the thing. In the transactions files the following records seem at odds. Both loans were formed on the 24th less than a week ago.
Date Item Product Transaction Amount Balance
01/07/2019 O502398686131 Rolling Lend order (£14.74) £2.2901/07/2019 C617787721969 Rolling Interest £0.01 £17.0301/07/2019 C617787721969 Rolling Capital repayment £15.16 £17.02
01/07/2019 O502397859368 Rolling Lend order (£32.05) £1.86
01/07/2019 C617787845486 Rolling Interest £0.04 £33.91
01/07/2019 C617787845486 Rolling Capital repayment £33.87 £33.87 Weirdly the amount she received and the amount lent back out seems to not be the same and the balance not yet lent seems to be mounting in holding rather than relent. the loans seem to be changing their names as well.
I'm sure there is a simple explanation for this but it escapes me at present.It's an "amortising" loan meaning that the capital is gradually repaid over the life of the loan not in a single amount at the end. I think most (all??) Rolling RS loans are amortising to some degree and as you say the returned capital goes into your holding account. Think of it like a repayment mortgage where you pay off capital gradually through the life as opposed to interest-only where the capital is a lump at the end. Not sure exactly how RS structure their loans but you may well find the capital returned * number of payments remaining equals the capital currently outstanding. (If it's less with a lump sum remaining that's what is technically called a "balloon" repayment as the capital has deflated over time but not entirely).
thx, I forgot it was amortizing. I'm new to this rolling milarkey
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smezz
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Post by smezz on Jul 1, 2019 20:19:44 GMT
Just to complete the picture, I picked up a couple of non amortizing loans on Rolling recently both with 6 months to go (probably point to same loan - will check).
Edit: yes two contracts point to same loan. I guess someone sold a 1 year loan halfway through.
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