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Post by tomas on Sept 11, 2019 4:43:12 GMT
The rates are falling quite fast. The loans turnover is increasing. Most of my loans could be replaced with this low rate loans in a couple of months. Should I wait for higher returns with no hope to sell these low rate loans on secondary market? Or should I wait, keep cash on account and hope for the best?
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benaj
Member of DD Central
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Post by benaj on Sept 11, 2019 7:54:21 GMT
I haven't given up on Mintos yet, but I am in the position to re-balance my portfolio. It might be easier to stick with Mintos for a bit longer as it is a pretty good platform, I am running down my account and might increase investment on Mintos when the time is right.
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Post by bilko on Sept 13, 2019 18:13:51 GMT
Some speculate the low rates are a seasonal thing. I doubt it. These are the inevtable effects of the negative interest rate in Europe. Those are with us for a while yet.
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Post by extremis on Sept 13, 2019 19:32:49 GMT
Some speculate the low rates are a seasonal thing. I doubt it. These are the inevtable effects of the negative interest rate in Europe. Those are with us for a while yet. Well, negative interest rates were already in place back on July, when we could easily find plenty of 16% interest rate opportunities on Mintos marketplace. Interest rates in Europe have not significantly changed in the last couple of months to account for the dramatic change in rates on Mintos. Available loans on PM has fallen 10 times (from 500k to 50k) in these 2 months, this has nothing to do with European rates too. It is obviously a supply and demand thing, and i expect supply to rise again shortly before Christmas time along with interest rates. However, i am not so sure rates will (ever?) go up as high as before depending on I&A success (as already mentioned). After all, if everyone decides to put his/her money in I&A and accept whatever interest rate there is available from whomever, then why should LOs offer us higher rates? But maybe newcomers (that are the main I&A users) will get more seasoned (e.g. understand that buyback guarantee is nowhere near the safety offered by banks' compensation schemes) with time and resort to Autoinvest like most of us do anyway, so the effect will be minimal. Only time will tell.
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Post by bilko on Sept 14, 2019 6:40:17 GMT
Some speculate the low rates are a seasonal thing. I doubt it. These are the inevtable effects of the negative interest rate in Europe. Those are with us for a while yet. Well, negative interest rates were already in place back on July, when we could easily find plenty of 16% interest rate opportunities on Mintos marketplace. Interest rates in Europe have not significantly changed in the last couple of months to account for the dramatic change in rates on Mintos. Available loans on PM has fallen 10 times (from 500k to 50k) in these 2 months, this has nothing to do with European rates too. It is obviously a supply and demand thing, and i expect supply to rise again shortly before Christmas time along with interest rates. However, i am not so sure rates will (ever?) go up as high as before depending on I&A success (as already mentioned). After all, if everyone decides to put his/her money in I&A and accept whatever interest rate there is available from whomever, then why should LOs offer us higher rates? But maybe newcomers (that are the main I&A users) will get more seasoned (e.g. understand that buyback guarantee is nowhere near the safety offered by banks' compensation schemes) with time and resort to Autoinvest like most of us do anyway, so the effect will be minimal. Only time will tell.
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Post by bilko on Sept 14, 2019 7:03:54 GMT
Well, negative interest rates were already in place back on July, when we could easily find plenty of 16% interest rate opportunities on Mintos marketplace. Interest rates in Europe have not significantly changed in the last couple of months to account for the dramatic change in rates on Mintos. Available loans on PM has fallen 10 times (from 500k to 50k) in these 2 months, this has nothing to do with European rates too. It is obviously a supply and demand thing, and i expect supply to rise again shortly before Christmas time along with interest rates. However, i am not so sure rates will (ever?) go up as high as before depending on I&A success (as already mentioned). After all, if everyone decides to put his/her money in I&A and accept whatever interest rate there is available from whomever, then why should LOs offer us higher rates? But maybe newcomers (that are the main I&A users) will get more seasoned (e.g. understand that buyback guarantee is nowhere near the safety offered by banks' compensation schemes) with time and resort to Autoinvest like most of us do anyway, so the effect will be minimal. Only time will tell. This is a trickle down thing. Effects come with time and with the realization that the negative interest rates are more than a temporary anomaly. Of course it's supply and demand: lower interest rates make more investors look towards new investment methods in fintech, while fewer borrowers will feel the need to take out loans from the high end loan originators. Take my own example: I took out a higher mortgage loan on my new house than I needed. I have more money to invest and run a lower risk to need an urgent loan. It's not just Mintos. My Robocash portfolio now has 60 % cash drag and my Peerberry auto-invest is also in a coma. Actually, it would be very surprising if the European negative rates did not have any effect on P2P lending at all.
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fric
Member of DD Central
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Post by fric on Sept 16, 2019 6:46:39 GMT
Loan originators can issue bonds to raise their capital at a significantly lower percent than on Mintos. Why put up loans for 14-16% on Mintos, if you can issue bonds for under 10%? There is a time delay here it seems. Bonds are a bit trickier and have to be timed properly, you need good financial situation etc. But you see this everywhere - governments as well are paying back their older bonds and "refinancing" with new bonds at a lower %. I think the loan originators just needs less and less money from Mintos marketplace investors.
Actually, I wouldn't be surprised if at some point we would start to see not individual loans but "bonds" (even though the loan structure on some originators are actually like that and you don't have a claim on the loan, but the originator as a whole) - you see 1 bond (loan) to lets say Mogo for 1 million at 8% or something.
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Post by extremis on Sept 16, 2019 23:06:45 GMT
Loan originators can issue bonds to raise their capital at a significantly lower percent than on Mintos. Why put up loans for 14-16% on Mintos, if you can issue bonds for under 10%? Well, there are a few reasons for that: diversification of funds is one reason and also bond financing is not as flexible as financing through a platform like Mintos. LOs must pay bond rates for the full bond amount whether this is lent to borrowers or not, while financing through Mintos occurs only when needed. Actually, there are very few LOs that can issue bonds for under 10%. Most of them are so small with virtually non-existent trading histories and/or even negative equities, that would be impossible for them to get financing through bonds even at 14-16% rates. So platforms like Mintos are their only chance to get financing and expand their businesses. We (investors) are lending them money at very low rates (especially nowadays that rates have plunged) for the risk taken.
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fric
Member of DD Central
Posts: 199
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Post by fric on Sept 17, 2019 6:09:42 GMT
Loan originators can issue bonds to raise their capital at a significantly lower percent than on Mintos. Why put up loans for 14-16% on Mintos, if you can issue bonds for under 10%? Well, there are a few reasons for that: diversification of funds is one reason and also bond financing is not as flexible as financing through a platform like Mintos. LOs must pay bond rates for the full bond amount whether this is lent to borrowers or not, while financing through Mintos occurs only when needed. Actually, there are very few LOs that can issue bonds for under 10%. Most of them are so small with virtually non-existent trading histories and/or even negative equities, that would be impossible for them to get financing through bonds even at 14-16% rates. So platforms like Mintos are their only chance to get financing and expand their businesses. We (investors) are lending them money at very low rates (especially nowadays that rates have plunged) for the risk taken. Sure, not everybody can, but the big LOs can and they have been doing that. E.g. Mogo was doing it last year i think for like 9.5 or something. I used the bonds as an example, they could also be getting just loans or direct investors into the company. With interest rates going down across Europe, these companies are benefiting from that as well, since more and more people are looking for some higher interest investing. And yes, it doesn't happen overnight, there is a time delay ofc. Remember when Mogo issued those bonds? Interest rates on Mintos plummeted...
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Post by hugoncosta on Sept 17, 2019 7:34:36 GMT
30k loans on the primary market. 10% is soon going to be the going rate. Invest & Access is going sub 9%. What's going on?
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benaj
Member of DD Central
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Post by benaj on Sept 17, 2019 7:55:31 GMT
It's a cat and mouse game.
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fric
Member of DD Central
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Post by fric on Sept 17, 2019 8:14:20 GMT
Its ~27600 loans left now... I think it was way more few hours ago when I logged in... At this rate there won't anything to invest in next week...
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walktall7
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Post by walktall7 on Sept 18, 2019 20:39:35 GMT
For us uk customers we cannot invest in any new loans in mintos at all, one third of my loans repaid since 5 July
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benaj
Member of DD Central
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Post by benaj on Sept 19, 2019 6:33:47 GMT
30k loans on the primary market. 10% is soon going to be the going rate. Invest & Access is going sub 9%. What's going on? I am not used to this new rates movement lately. Some LOs are droping their rates more 1% a day.
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Post by petebutt43 on Sept 29, 2019 23:01:50 GMT
Some speculate the low rates are a seasonal thing. I doubt it. These are the inevtable effects of the negative interest rate in Europe. Those are with us for a while yet. What low rates?
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