rscal
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Post by rscal on Sept 4, 2019 5:30:11 GMT
It's commendable how ppl on this forum are adjusting to this: saying it won't be too bad and we'll manage this etc. Of course I could point out that exiting the existing product range is still subject to the sub-£10 loans issue which RS seem to have no inclination to address or resolve (Hint: it's a technical issue not a marketing one) We'll put that in the 'too hard' box shall we?
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jlend
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Post by jlend on Sept 4, 2019 5:47:24 GMT
Sorry my post failed. I meant to ask r00lish67 So you believe that if I have a rolling loan at 4.6% with the "remaining" capital reinvestment of 58 months, I will continue to receive 4.6% for the next 58 months? Because if not, far from "nothing changes for you" it is "everything changes for me" as I have a number of such loans. If you have seen something that leads you to believe this, could you point it out to me, because I would really like to believe that this will be the case. From the FAQs "We will let you know of any changes to the Going Rate with 14 days’ advance notice. Changes in the Going Rate will not affect your existing investments which will continue at the same rate as before; changes in the Going Rate will only apply to new investments/reinvestments." Hopefully the FAQ above is clear. Just to expand on it. Once a loan matches at a specific rate, that rate remains unchanged for the duration of the loan. That is true for the old and new accounts. It also the same in Lending Works for example. It is worth remembering though that the loan will gradually be paid off by the borrower as I am sure you know. Also all the loans may be repaid early either by the borrower or the PF in the event of a default of some loans. So yes you are guaranteed the same rate for the duration of the loan, but the duration of the load and the amount outstanding is not guaranteed. Plus the PF is not guaranteed to be sufficient to pay out as I am sure you are aware. Any repayments will be reinvested back in the market automatically at either the going rate or a rate that you choose. This may or may not be 4.6%. It is up to you what rate you try and get. Obviously the higher the rate the less likely it will be matched at any one time. Only time will tell what happens to rates on average and how many times we see rates shoot up for short periods of time.
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happy
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Post by happy on Sept 4, 2019 7:26:17 GMT
Ratesetter has the advantage that it publishes the details of it accruing provision fund where Assetz capital is much higher risk because the provision find is mostly “opaque” in operation. You say AC is a bigger risk due to the (your implied) inferior structure of its PF versus RS's however I feel you are perhaps not considering the very important fact that most RS loans are unsecured and therefore in the event of a default are 100% dependant on the presence of a funded and functioning PF to protect your capital. Compare this to AC where all loans (bar a few historic loans) are asset secured and the PF will only need to cover any residual loss in the event of a default. I feel that the more accepted view is that ultimately RS has more potential risk of capital loss in it's PF model than AC, particicularly during the next inevitable downward economic cycle. This is perhaps demonstrated by RS's recent struggles to maintain it's PF at the published target funding level even during the relatively benign economic climate we have exerienced over the last few years. So much so that they reduced the target. This concern has been discussed in some detail on this forum a number of times before. I'm pretty much out of RS now, apart from some retained interest, having previously had 6 figure sum there 3-4 years ago but I still choose to invest in AC in both their MLA and automated accounts. I have no issues with AC and the visibility of where my money is invested or how the PF works and is funded, all the information is available for an investor to see. JMO....
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Post by propman on Sept 4, 2019 7:57:53 GMT
Ratesetter has the advantage that it publishes the details of it accruing provision fund where Assetz capital is much higher risk because the provision find is mostly “opaque” in operation. You say AC is a bigger risk due to the (your implied) inferior structure of its PF versus RS's however I feel you are perhaps not considering the very important fact that most RS loans are unsecured and therefore in the event of a default are 100% dependant on the presence of a funded and functioning PF to protect your capital. Compare this to AC where all loans (bar a few historic loans) are asset secured and the PF will only need to cover any residual loss in the event of a default. I feel that the more accepted view is that ultimately RS has more potential risk of capital loss in it's PF model than AC, particicularly during the next inevitable downward economic cycle. This is perhaps demonstrated by RS's recent struggles to maintain it's PF at the published target funding level even during the relatively benign economic climate we have exerienced over the last few years. So much so that they reduced the target. This concern has been discussed in some detail on this forum a number of times before. I'm pretty much out of RS now, apart from some retained interest, having previously had 6 figure sum there 3-4 years ago but I still choose to invest in AC in both their MLA and automated accounts. I have no issues with AC and the visibility of where my money is invested or how the PF works and is funded, all the information is available for an investor to see. JMO.... I am not familiar withAssetz, but secured loans are not necessarily likely to suffer lower defaults. Most such loans are secured on either commercial property or residential developments. Both are very cyclic and have the potential to lose 50%+ across the board. Most such secured borrowers have little else to use to repay their loans and some loans are explicitlt limited to proceeds from the security. As such, a market downturn will affect the majority of loans with the potential to lose significant amounts. Personally the area of their loan book I am least happy with is the secured property loans! Such loans are likely to largely pay back in full for most of the economic cycle and then lose significant amounts at the base of the cycle. Others are more evenly spread.
JMHO
PM
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jlend
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Post by jlend on Sept 4, 2019 9:09:07 GMT
Ratesetter has the advantage that it publishes the details of it accruing provision fund where Assetz capital is much higher risk because the provision find is mostly “opaque” in operation. You say AC is a bigger risk due to the (your implied) inferior structure of its PF versus RS's however I feel you are perhaps not considering the very important fact that most RS loans are unsecured and therefore in the event of a default are 100% dependant on the presence of a funded and functioning PF to protect your capital. Compare this to AC where all loans (bar a few historic loans) are asset secured and the PF will only need to cover any residual loss in the event of a default. I feel that the more accepted view is that ultimately RS has more potential risk of capital loss in it's PF model than AC, particicularly during the next inevitable downward economic cycle. This is perhaps demonstrated by RS's recent struggles to maintain it's PF at the published target funding level even during the relatively benign economic climate we have exerienced over the last few years. So much so that they reduced the target. This concern has been discussed in some detail on this forum a number of times before. I'm pretty much out of RS now, apart from some retained interest, having previously had 6 figure sum there 3-4 years ago but I still choose to invest in AC in both their MLA and automated accounts. I have no issues with AC and the visibility of where my money is invested or how the PF works and is funded, all the information is available for an investor to see. JMO.... Just to add, the proportion of the RS property loans is increasing. This may be a good or bad thing depending on how lenders feel about secured property loans. For example 31% of RS loans in July were property loans. This equates to 25.8m Euros according to the stats publishes by wiseclerk. ACs new loans for July were 20m. Albeit this is only a one month example in gives some idea of scale. Also some of the other RS loans have security, e.g. some of the car loans and commercial loans for example. AC also have room for improvement with regard to their PF reporting. Currently the PF stats for the QAA, 30DAA and 90DAA are from 31st March 2019. It would be better if they were updated more frequently. I have money in both AC and RS.
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Post by pachiraaquatica on Sept 4, 2019 9:39:30 GMT
jlend (Sorry for some reason the Quote function is not working for me) I think that is good to know. The only question I have is that you say that the Going Rate will apply to reinvestments. Currently for an investment in the Rolling market, with say 58 months remaining, each month that loan shows up as a newly matched loan. So technically it is a new investment. Can you confirm that for the purpose of retaining it's current rate (all mine are higher than 3%) they will not be considered as a reinvestment, and will be loaned again at their current rate (eg 4.8%)
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jlend
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Post by jlend on Sept 4, 2019 10:58:30 GMT
jlend (Sorry for some reason the Quote function is not working for me) I think that is good to know. The only question I have is that you say that the Going Rate will apply to reinvestments. Currently for an investment in the Rolling market, with say 58 months remaining, each month that loan shows up as a newly matched loan. So technically it is a new investment. Can you confirm that for the purpose of retaining it's current rate (all mine are higher than 3%) they will not be considered as a reinvestment, and will be loaned again at their current rate (eg 4.8%) It is not actually a reinvestment you are seeing as per the terms and conditions, it is simply the outstanding reduced balance in the same original loan that you are seeing. Some of the terminology can be confusing, some of this for historical reasons. Hence I assume one of the reasons for calling the revised account "Access" . The portion of the original loan "rolling over" that you see does and will retain the original interest rate. Just remember obviously that the original borrower is typically paying back a portion of the capital each month to you. So the original loan is reducing all the time. Any capital paid back by the original borrower will be "reinvested" by you in another loan with a different borrower at a different rate. Hence this "reinvestment" will not get the original 4.8% you got in the original loan with the original borrower.
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Post by propman on Sept 4, 2019 12:49:47 GMT
jlend (Sorry for some reason the Quote function is not working for me) I think that is good to know. The only question I have is that you say that the Going Rate will apply to reinvestments. Currently for an investment in the Rolling market, with say 58 months remaining, each month that loan shows up as a newly matched loan. So technically it is a new investment. Can you confirm that for the purpose of retaining it's current rate (all mine are higher than 3%) they will not be considered as a reinvestment, and will be loaned again at their current rate (eg 4.8%) It is not actually a reinvestment you are seeing as per the terms and conditions, it is simply the outstanding reduced balance in the same original loan that you are seeing. Some of the terminology can be confusing, some of this for historical reasons. Hence I assume one of the reasons for calling the revised account "Access" . The portion of the original loan "rolling over" that you see does and will retain the original interest rate. Just remember obviously that the original borrower is typically paying back a portion of the capital each month to you. So the original loan is reducing all the time. Any capital paid back by the original borrower will be "reinvested" by you in another loan with a different borrower at a different rate. Hence this "reinvestment" will not get the original 4.8% you got in the original loan with the original borrower. Also, although it will require the investor to alter the default settings, the reinvestment can be set at another rate up to 5% above the Going Rate.
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