aju
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Post by aju on Oct 10, 2019 16:24:21 GMT
I think the numbers you have shown i.e. 2dp are definitely rounded from maybe 5/6 dp. In Zopa they are shown much more accurately. That said the rounding up and down would be minimal I would have thought even using 2dp rather than 5 or even 6 dp. Of course on a much larger loan, I have one 4 figure one, that would perhaps have a bigger effect although its the same level of rounding so I'm not sure. I made the 7 days come to .22*12/365*7 = 5p ( I guessed the average monthly rate was about .22p looking at your numbers) This may have changed more recently, but several years ago unlike Zopa there was rounding of the amounts due to nearest penny. That said, I think the loan shown may be later as the March payment actually increased, but looks like a regular payment due to the timing. Would that have been the case under the hood though - it reminds me of that old bank insider fraud of just skimming a 1cent off each of the accounts such that no one notices but the profits can be quite large. Of course with dp rounding its more swings and roundabouts. I would have thought though that under the hood they would be working at the 5/6 dp level, wouldn't they, whilst at the display level work at the 2dp levels.
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Post by propman on Oct 10, 2019 16:42:23 GMT
I recheck the numbers, if the borrower repaid on the 16th Sep, XIRR would be 6.37%, close enough to 6.4%. If final repayment is £7.92, XIRR would have been 6.37% as well. I guess RS rounded down 1p, unpaid interest would have been very close to 1p for 7 days of interest. I think the numbers you have shown i.e. 2dp are definitely rounded from maybe 5/6 dp. In Zopa they are shown much more accurately. That said the rounding up and down would be minimal I would have thought even using 2dp rather than 5 or even 6 dp. Of course on a much larger loan, I have one 4 figure one, that would perhaps have a bigger effect although its the same level of rounding so I'm not sure. I made the 7 days come to .22*12/365*7 = 5p ( I guessed the average monthly rate was about .22p looking at your numbers) The 22p includes the capital repayment, I estimate £7.90 o/s before sale and agree that only 1p of interest is due on this. The difference to 6.4% (assuming daily compounding) is 1.1p cumulative. I also wonder whether the borrower gets a quote for the repayment and that a few days interest is lost while the payment is made and processed.
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aju
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Post by aju on Oct 10, 2019 17:17:44 GMT
I think the numbers you have shown i.e. 2dp are definitely rounded from maybe 5/6 dp. In Zopa they are shown much more accurately. That said the rounding up and down would be minimal I would have thought even using 2dp rather than 5 or even 6 dp. Of course on a much larger loan, I have one 4 figure one, that would perhaps have a bigger effect although its the same level of rounding so I'm not sure. I made the 7 days come to .22*12/365*7 = 5p ( I guessed the average monthly rate was about .22p looking at your numbers) The 22p includes the capital repayment, I estimate £7.90 o/s before sale and agree that only 1p of interest is due on this. The difference to 6.4% (assuming daily compounding) is 1.1p cumulative. I also wonder whether the borrower gets a quote for the repayment and that a few days interest is lost while the payment is made and processed. oops my bad error eh! "what a plonker Rodney"  Must be different to Zopa then as on Zopa the selling lender does not get the final period interest that goes to the buyer of the loan I think that's right anyway. Perhaps that's just a Zopa thang.
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benaj
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Post by benaj on Oct 10, 2019 17:39:21 GMT
The 22p includes the capital repayment, I estimate £7.90 o/s before sale and agree that only 1p of interest is due on this. The difference to 6.4% (assuming daily compounding) is 1.1p cumulative. I also wonder whether the borrower gets a quote for the repayment and that a few days interest is lost while the payment is made and processed. oops my bad error eh! "what a plonker Rodney" Must be different to Zopa then as on Zopa the selling lender does not get the final period interest that goes to the buyer of the loan I think that's right anyway. Perhaps that's just a Zopa thang. I didn’t sell that 10.01 loan, it was repaid early, and I was told there was no accrued interest on the phone. For 1p worth, it’s not worth it. But without loanbook, it’s hard to tell if I got paid more or less when selling lots via RYI.
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aju
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Post by aju on Oct 11, 2019 7:31:28 GMT
oops my bad error eh! "what a plonker Rodney" Must be different to Zopa then as on Zopa the selling lender does not get the final period interest that goes to the buyer of the loan I think that's right anyway. Perhaps that's just a Zopa thang. I didn’t sell that 10.01 loan, it was repaid early, and I was told there was no accrued interest on the phone. For 1p worth, it’s not worth it. But without loanbook, it’s hard to tell if I got paid more or less when selling lots via RYI. My apologies benaj, are you a Zopa lender and therefore have more book data. I guess the only way you can deal with this is to speak to RS and find out how it works. As you say its a very small amount but for a large loan in a similar situation this loss may be more significant. I have a very large loanbook on Zopa but to be honest most of my loans are £10 except for SG covers and they can go up to £50. Loans by their very nature in p2p are cleared much earlier as usually there are no penalties to the borrower for early redemption. It may be that this is standard practice to forgo the last month interest - seems a bit odd though.
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Post by Deleted on Oct 11, 2019 8:14:33 GMT
When you get a RYI quote on RS, it shows the accrued interest that you'll receive.
I think it's a quirk of Zopa that the buyer gets the accrued interest - I suspect their systems couldn't cope with anything more complicated.
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aju
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Post by aju on Oct 11, 2019 11:13:03 GMT
When you get a RYI quote on RS, it shows the accrued interest that you'll receive. I think it's a quirk of Zopa that the buyer gets the accrued interest - I suspect their systems couldn't cope with anything more complicated. Ah that's interesting @inv11 thanks for the that - I did have a long read of all the RS FAQ's and terms documents I could find but there seemed no mention of accrued interest and since I have never actually tried the RYI options yet I have not seen that. Perhaps I'll give it a go I assume you can back out without actually selling anything. My only other P2P investments are with Zopa and to be fair I've not seen their accrued interest method on any of Zopa's terms just noticed it when I sold out and queried it with Zopa at the time and was advised accordingly. I think it has been discussed on zopa forums as well.
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