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Post by befuddled on Sept 4, 2019 17:38:51 GMT
Presumably, all existing loans can be drawn down over the terms of the loans with no fees, if reinvestment is not allowed (isn't yet clear to me if it will). Bit of a pain for the ISA, mind you. If rates are uncompetitive (seems likely at current levels) I think the strategy will be to reinvest in the Access on repayment of current loan installments, then transfer out in batches. Loan Pad, AC, LW would seem to be the obvious fire and forget ISA alternatives. You can pull cash out of ISA with no loss of tax free status providing you return cash before year end, ie withdraw cash to bank account, move the withdrawn cash back to RS on April 5, then remove it back to bank account April 7th. (OK maybe give yourself a few days margin for weekends etc !) OK, a bit of a faf, but workable once a year... You can also transfer part of ISA (ie repayments/interest) out to another ISA (permanently) providing it is not from the current year's ISA
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rscal
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Post by rscal on Sept 4, 2019 18:26:29 GMT
Can I check something: My Five Year and One Year loans are simply set to send repayment of "Captial and Interest" to holding at present. I have no "My Rate" set against either of these (I'm completely out of Rolling now)
Will my repayment instructions be amended unilaterally by the system as things stand when we switch to the new set-up in October? I could set a 'silly' rate of course, but will I have to or can I leave it and continue to receive payments via the 'sensible' arrangement as now?
Thnx
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Stonk
Stonking
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Post by Stonk on Sept 4, 2019 18:56:33 GMT
Trying to put it all into a simple picture, please correct me if I'm wrong. There will be 6 RS accounts: 1. Access (replacement for Rolling) 2. Plus (ditto) 3. Max (ditto) 4. 1-year (discontinued, but still running for existing customers until loans are repaid). 5. 5-year (ditto) 6. Rolling (ditto)
What is going to happen to 1 Year and 5 Year? All I read is that they will remain available to existing active investors (those with loans or orders). I took that to mean that there will continue to be a supply of new loans on those markets, i.e., business as usual. What you have suggested is rather different, though, and might well be correct: that we can keep our current loans, but never get any new ones and the markets will die a natural death. Hmm.
Anyway, I think I'll go and put an order in at 99.9% to keep my active status.
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Post by propman on Sept 4, 2019 19:00:06 GMT
Trying to put it all into a simple picture, please correct me if I'm wrong. There will be 6 RS accounts: 1. Access (replacement for Rolling) ... 6. Rolling (ditto)
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Post by Deleted on Sept 4, 2019 20:21:19 GMT
Can I check something: My Five Year and One Year loans are simply set to send repayment of "Captial and Interest" to holding at present. I have no "My Rate" set against either of these (I'm completely out of Rolling now)
Will my repayment instructions be amended unilaterally by the system as things stand when we switch to the new set-up in October? I could set a 'silly' rate of course, but will I have to or can I leave it and continue to receive payments via the 'sensible' arrangement as now?
Thnx
There are supposedly no changes to the 1 year and 5 year markets, but I will definitely be checking all settings on 3 October just in case, as RS has made a few cock-ups recently.
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Post by df on Sept 4, 2019 20:46:00 GMT
Trying to put it all into a simple picture, please correct me if I'm wrong. There will be 6 RS accounts: 1. Access (replacement for Rolling) 2. Plus (ditto) 3. Max (ditto) 4. 1-year (discontinued, but still running for existing customers until loans are repaid). 5. 5-year (ditto) 6. Rolling (ditto)
What is going to happen to 1 Year and 5 Year? All I read is that they will remain available to existing active investors (those with loans or orders). I took that to mean that there will continue to be a supply of new loans on those markets, i.e., business as usual. What you have suggested is rather different, though, and might well be correct: that we can keep our current loans, but never get any new ones and the markets will die a natural death. Hmm.
Anyway, I think I'll go and put an order in at 99.9% to keep my active status.
There's lack of clarity on the future of existing accounts. I won't do anything, just wait and see what happens in October. As RS has been in a 'change mode' for sometime now, I won't be surprised if we'll see some more changes in near future. I'm not sure, but it doesn't feel like they have a well thought through strategy for survival.
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robski
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Post by robski on Sept 5, 2019 10:29:18 GMT
Had a think about it and I think (assuming the deliberatly tricksy language used is as we think) then I am going to react as follows : 1) If 5 year carries on and still has enough new loans to keep reasonable levels going through this will remain my RS default. I suspect however they will not allow this and try to force people to move via creating a horrible cash drag scenario apart from any lender funds offered at a low rate. 2) If 5 year doesnt, then providing there isnt a significant lock out period I will probably allow funds to go to 90 day, assuming again it will provide a decent return (ie around same as 5 year) but also critically no massive cash drag to get lent out 3) If neither of the above apply I am going to look for a new home, and exit RS over a 5 year period. I will be doing daily requests to transfer funds as they come in via repayments. Whilst they will be ISA repayments (about 80% in ISA now for me) I can live with the fact I may lose some status, as they will be spread quite thinly I can live with a minimal impact on timings. There is another issue I have with the new system. Queuing of loans and loan sizes. I got burned a few times with large loans at a decent rate being repaid and the new rate being significantly lower. RS say they tried to get rid of that unpredictability, but for me they have failed, I dont want a consistently lower rate thanks My preferred is still to spread my funds into multiple loans, ideal of £100-200 each, as I only actively lend on 5 year that means the £10 issue only kicks in in the last 6 months approx and thats no issue to me. The new system as I cannot control via holding will mean I have zero control on the loan sizes, so I could end up seeing the same issue all over again. A decent rate all going into one loan that soon repays and I either have to accept a significantly lower rate, with potentially an even larger amount on one loan, or more cash drag and hence lower actual vs advertised rate.
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Sept 5, 2019 13:34:46 GMT
"We believe good products are simple, with a consistent experience." - so do I, but can't help comparing to some other platforms: GS - 1 product @5.3%, free withdrawal after 1 month. LW - 2 products: 5% instant access and 6.5% 0.5% withdrawal fee. These are much more simple and paying better rates. Trying to put it all into a simple picture, please correct me if I'm wrong. There will be 6 RS accounts: 1. Access (replacement for Rolling)2. Plus (ditto) 3. Max (ditto) 4. 1-year (discontinued, but still running for existing customers until loans are repaid). 5. 5-year (ditto) 6 . Rolling (ditto)I'm in Rolling and 5-year atm. Am I correct to think that if I set my reinvestments to highest possible rates and do regular cancelations/withdrawals I'll be able to gradually run my loan book down without paying any fees like I do with my Access and Classic Zopa accounts? Another thing, a bit out of topic. I'm not sure if 3% is a suitable rate for p2p investment. This is not very far from what you can get from FSCS accounts. 1% extra makes sense if you have 7 figure to invest, but I doubt many millionaires invest in RS... I think most ordinary p2p investors who requires fee free instant access will find other accounts (QAA for example is more simple and pays 4.1% for roughly the same level of risk) more attractive than RS's Access. I read it that Rolling will become Access immediately, thus leaving 5 accounts.
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Sept 5, 2019 15:27:39 GMT
"We believe good products are simple, with a consistent experience." - so do I, but can't help comparing to some other platforms: GS - 1 product @5.3%, free withdrawal after 1 month. LW - 2 products: 5% instant access and 6.5% 0.5% withdrawal fee. These are much more simple and paying better rates. Trying to put it all into a simple picture, please correct me if I'm wrong. There will be 6 RS accounts: 1. Access (replacement for Rolling)2. Plus (ditto) 3. Max (ditto) 4. 1-year (discontinued, but still running for existing customers until loans are repaid). 5. 5-year (ditto) 6 . Rolling (ditto)I'm in Rolling and 5-year atm. Am I correct to think that if I set my reinvestments to highest possible rates and do regular cancelations/withdrawals I'll be able to gradually run my loan book down without paying any fees like I do with my Access and Classic Zopa accounts? Another thing, a bit out of topic. I'm not sure if 3% is a suitable rate for p2p investment. This is not very far from what you can get from FSCS accounts. 1% extra makes sense if you have 7 figure to invest, but I doubt many millionaires invest in RS... I think most ordinary p2p investors who requires fee free instant access will find other accounts (QAA for example is more simple and pays 4.1% for roughly the same level of risk) more attractive than RS's Access. I read it that Rolling will become Access immediately, thus leaving 5 accounts. Existing one year and five year continuing as normal for current investors, you can add funds (I'm pretty sure anyway), but for how long I wonder. Withdrawing funds should work as it always has in these too.
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aju
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Post by aju on Sept 5, 2019 15:32:37 GMT
Has anyone been able to print a copy of the FAQ's by chance. It's one of those unhelpful one where the print option only see's at best one open faq at once. I've tried using an interceptor extension to change the code to force the opening but sadly this code is way above my paygrade. www.ratesetter.com/help/new-investment-products-faq
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Post by jono75 on Sept 5, 2019 15:52:08 GMT
Just as an extra confirmation about the new Plus and Max accounts and getting access to money without paying a fee, it seems like this is not possible.
From RS email:
"Both the Plus and Max products will automatically reinvest and incur a fee if you release your investments. The Access product will continue to have zero fee.
"The 1 year and the 5 year market will remain accessible for existing customers (with funds invested)."
Lending Works offer better rates than plus (5%) with no fee and 0.5 fee for 6.5%, other than for diversification that's a no brainer.
Not sure if it will be possible to set a high re-investment percentage and cancel the orders in the new products to get your money to holding, I'm going to wait and see what feedback comes in next month.
I personally think they will stop any new investments in 1yr and 5yr soon and wind them down naturally. If they don't change the mandatory fee for new products then they won't look very competative to lenders. Especially as they have total control of the going rate and can change it with little notice.
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jlend
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Post by jlend on Sept 5, 2019 16:19:25 GMT
From RS
"You will not have to close your account in order to cancel orders in any of the products."
RS have also already confirmed there are no fees for cancelling unmatched orders. The release fee is only for money already matched.
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Post by df on Sept 5, 2019 16:24:36 GMT
Just as an extra confirmation about the new Plus and Max accounts and getting access to money without paying a fee, it seems like this is not possible. From RS email: "Both the Plus and Max products will automatically reinvest and incur a fee if you release your investments. The Access product will continue to have zero fee. "The 1 year and the 5 year market will remain accessible for existing customers (with funds invested)." Lending Works offer better rates than plus (5%) with no fee and 0.5 fee for 6.5%, other than for diversification that's a no brainer. Not sure if it will be possible to set a high re-investment percentage and cancel the orders in the new products to get your money to holding, I'm going to wait and see what feedback comes in next month. I personally think they will stop any new investments in 1yr and 5yr soon and wind them down naturally. If they don't change the mandatory fee for new products then they won't look very competative to lenders. Especially as they have total control of the going rate and can change it with little notice. I think 'plus' and 'max' are designed to eventually replace 1year and 5year respectively. I fear that very soon we won't see rates above 5% on RS any more. It's just my speculation, have to wait and see what will happen.
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ashtondav
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Post by ashtondav on Sept 5, 2019 16:57:02 GMT
If you can get a decent rate in max, say 6%, and you can set high rates so you get unmatched money which you can withdraw at no cost (now confirmed), I don’t have a problem. The issue will be if I can ever achieve 6% in max without excessive cash drag. I still favour RS over LW because of platform size, but 6.5% vs 5% is a no brainier so very tempting.
in terms of my short term accesss accounts I favour AC and LW. RS Access is pitched too low - it needs to be at least in line with AC, which has the additional protection of asset backing.
I know nothing about Growth Street so open to views.
But Gawd how times have changed. Back in 2008 I could get 6% from the building society. Now I have to risk my capital to get above the inflation rate. And my pals in Germany are only getting 0.5% best on deposit.
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Post by propman on Sept 5, 2019 17:14:59 GMT
Despite RS's best efforts, rates still go above MR & Lend it now more days than not. Why would the new system be different given lower rates if you can still choose to lend above the Going Rate?
My concern is that there is no repayment of the new loans at all. Yes you can cancel unmatched offers, but what if there are never any offers of money already lent? It might be the case that funds lent above the currently available rate are not relent, but would they be shown as offers (and therefore withdrawable) or merely remain unlent?
If you have to pay to withdraw, to need the same amount to produce the same return as a 6% 5 year loan going to term with optimal investment upfront would require investment at Going rate +1.5% (split between all 3 markets where the return for each payment is the minimum achievable). ie 0.5%pa cost of withdrawing. In practice the rate would need to be higher if the repayments are to be withdrawn as some would be expected to crystallise earlier so teh fee would be a greater proportion of the interest earned.
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