robski
Member of DD Central
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Post by robski on Jun 28, 2019 11:32:36 GMT
My smallest loan comes from the "great sell off of 2018" so you stood a pretty good chance of picking up small loans
Its £2.61 and pays 34p interest over 41 months. The schedule clearly shows its not calculating the interest as you would expect. Month 1 was 0p, and month 2 was 2p
My suspicion is RS start the calculation at "total loan" level. So they calculate the repayments for the borrower, then allocate these to the lenders if more than one. Ideally you would do this starting with the smallest amount, working up to the highest. The highest would be simply the borrowers repayments less the other lenders repayment schedules.
When sell outs are happening their hands are more tied, they can only deal with the bit thats being sold, its quite possible I guess they just don't have the interest left somehow. I have plenty where the last 1-3 payments will include zero interest. This is clearly the splitting of the repayment coming into effect. Maybe it works slightly differently when the system is doing initial loan calculations and later on.
Actually just thinking, as we know RS say they have to deal with the less than £10 loans individually. So I guess this requires an actual person to become involved, its completely forseeable that in this scenario there may be some less than perfect calculations taking place! (Eg maybe they couldn't be bothered to work out the interest on 46p and gave the rest to someone else who purchased the rest of the sold on loan)
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Post by propman on Jun 28, 2019 13:52:47 GMT
having checked, there is now some "catch up" mechanism for partial pennies. This was not always the case, but seems to be the case for all loans in my current loanbook. I had one notionally 7.8% 15p loan from 27 June 2012 to 5 April 2016 that paid nothing until the final day when only the capital was repaid. By my calculation 5p interest should have been paid. Apologies for stating that this is still the case above.
It does seem that the interest allocation on older loans is still calculated as before with some accumulating no interest for the latter months.
- PM
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sl75
Posts: 2,092
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Post by sl75 on Jul 19, 2019 10:16:58 GMT
Receiving such sub-£10 loans becomes a lot more likely when someone is using the sell-out...
In particular, when I switched my re-investment money from 5 year to rolling during last weekend's rate spike (I'd probably have added fresh funds too if I'd seen how high that spike went!), a single order for less than £120 got matched against 6 different loans, 2 of which were less than £10, due to the previous lender's loans being sliced into multiple pieces.
One of them is for £0.46, and claims to be due to pay £0.00 in interest. Hopefully it'll decide to give me a penny for at least one of the next 27 months... Those two sub-£10 loans stopped being a problem. They didn't "roll", but instead, the sub-£10 amount was repaid in full.
Perhaps RateSetter already have a process for dealing with these on "rolling" market so that lenders don't get stuck for more than a month at a time?
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Post by Deleted on Jul 22, 2019 10:49:23 GMT
Those two sub-£10 loans stopped being a problem. They didn't "roll", but instead, the sub-£10 amount was repaid in full.
Perhaps RateSetter already have a process for dealing with these on "rolling" market so that lenders don't get stuck for more than a month at a time?
My sub £10 loans were repaid in full too, so looks like that is standard protocol.
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