aju
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Post by aju on Dec 7, 2019 18:53:38 GMT
Sadly I'm finding that a high percentage of my 5 year loans are repaying very early. I managed to get 6.5 percent earlier this year and invested a chunk of money which was spread across 8 or 9 loan contracts In the 5 year at 6.5‰. I'm down to only 2 of those contracts left less than 6 moths later and now rates are not as good in 5 year so I haven't reinvested there. I've invested money in 1 year instead. Do you think I have just been unlucky in having such a high percentage repay so early or maybe they refinanced to get a better rate or something? Somewhat unlucky, I think, but these are statistically small numbers so anything could happen. I have several 5Y loans >6.5% and (touch wood) haven't had any early repayments recently. Of course, having said that... Yes, I believe we are. I'm not sure its correct that they will close as long as you have relend on, set it high enough that it will not actually be lent and control yourself as described above. I believe that as long as you have relend on of course. This what happened to me it relent out itself I just made the mistake of closing the offer before I put my £10 onto the system.
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upperdeane
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Post by upperdeane on Dec 8, 2019 18:49:33 GMT
Somewhat unlucky, I think, but these are statistically small numbers so anything could happen. I have several 5Y loans >6.5% and (touch wood) haven't had any early repayments recently. Of course, having said that... Yes, I believe we are. I'm not sure its correct that they will close as long as you have relend on, set it high enough that it will not actually be lent and control yourself as described above. I believe that as long as you have relend on of course. This what happened to me it relent out itself I just made the mistake of closing the offer before I put my £10 onto the system. Cheers aju
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Post by df on Dec 8, 2019 22:32:55 GMT
In the case of 5 year lenders, I'd have trouble believing that the market will still be open for investment by the time the last of my currently-active loans has repaid (expected some time in 2023/4 - exact month depending on which of them repay early).
There'll presumably come a point when 1Y an 5Y markets are "closed to new investment", with all investors forced to choose a new re-investment option or have the money accumulate in their holding account, and with remaining sales from 1Y and 5Y loans handled by the new markets.
I'd bet on that as being months rather than years.
The timing will likely depend on the success of new products (i.e. how many lenders will want to invest at the rates RS is offering).
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upperdeane
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Post by upperdeane on Dec 18, 2019 11:34:24 GMT
Somewhat unlucky, I think, but these are statistically small numbers so anything could happen. I have several 5Y loans >6.5% and (touch wood) haven't had any early repayments recently. Of course, having said that... Yes, I believe we are. Cheers, several months ago i transferred a chunk of money over into my ISA, hit the lend button all in one go at 6.5% rate - next morning it all got filled in just 8 loan parts. It was a fair amount of money in total from my transferred ISA so it wasn't really diversified as much as i was expecting and one of the loan parts alone was about £20k. I was expecting much smaller loan parts. Oh well. I've managed to get 5%+ in the one year with the early pay off 5yr money, which i'm happy with at this stage and I can hopefully access it for a "loss of interest" haircut i want. I'm going to have to keep and eye on my 1 year particularly as i don't want to lose access to that if loans pay off quickly. It got me thinking, If RS were crafty, they could close all our 1 year and 5 year loans overnight and make it look as if they were all paid off early and we wouldn't have access to those markets anymore. I'm not saying they would do that of course. Cheers for the input. And another early repayment in the 5 year this-morning for me (with no email). I'm down to one loan remaining now in the 5 year now. Either i'm very unlucky (as all but one have repaid very early) or RS are repaying my 5 year loans because they dont like the % interest rate I got for my original investments. So if the last loan pays off I have no more 5year access. So i may have to add few £10 orders just to keep a few loans active in the 5 yr.
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ceejay
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Post by ceejay on Dec 18, 2019 13:55:41 GMT
And another early repayment in the 5 year this-morning for me (with no email). I'm down to one loan remaining now in the 5 year now. Either i'm very unlucky (as all but one have repaid very early) or RS are repaying my 5 year loans because they dont like the % interest rate I got for my original investments. So if the last loan pays off I have no more 5year access. So i may have to add few £10 orders just to keep a few loans active in the 5 yr. As I said earlier, please don't buy a few £10 loans in the 5Y market. After just one month they will amortize below £10 and you will be stuck with them until they finish. £50, maybe. It seems that we think you'll be ok if your orders are never matched because you've set them high, but I wouldn't want to rely on that. The £10 loan strategy works better in the 1Y market as they don't amortize (and they're for at most a year anyway).
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upperdeane
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Post by upperdeane on Dec 18, 2019 14:05:29 GMT
And another early repayment in the 5 year this-morning for me (with no email). I'm down to one loan remaining now in the 5 year now. Either i'm very unlucky (as all but one have repaid very early) or RS are repaying my 5 year loans because they dont like the % interest rate I got for my original investments. So if the last loan pays off I have no more 5year access. So i may have to add few £10 orders just to keep a few loans active in the 5 yr. As I said earlier, please don't buy a few £10 loans in the 5Y market. After just one month they will amortize below £10 and you will be stuck with them until they finish. £50, maybe. It seems that we think you'll be ok if your orders are never matched because you've set them high, but I wouldn't want to rely on that. The £10 loan strategy works better in the 1Y market as they don't amortize (and they're for at most a year anyway). Ah, OK. Thanks for that.
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aju
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Post by aju on Dec 18, 2019 15:50:28 GMT
As I said earlier, please don't buy a few £10 loans in the 5Y market. After just one month they will amortize below £10 and you will be stuck with them until they finish. £50, maybe. It seems that we think you'll be ok if your orders are never matched because you've set them high, but I wouldn't want to rely on that. The £10 loan strategy works better in the 1Y market as they don't amortize (and they're for at most a year anyway). Ah, OK. Thanks for that. I had relend on my E/D 1Y and it finished the last loan early but as it was on relend it remained available and was in offer mode but was not matching - it's there where I made the mistake I should have kept it there and offered the additional £10 loan first then removed the relent/offered closed loan (I purposely had the relends set high as I wanted to move most relent money to the ISA side now for tax reasons). In effect I wanted to reduce the amount on the offer and send the rest to the ISA side but I stopped it by mistake and it closed my 1Y in the E/D side at that point. It wasn't a big deal I lost it as I still pay tax so I lost it. I'm also now finding that we should be in the 1Y, the rates seem better there too and we are retired so it's time to start shortening our lend periods to 12 months rather than 5 years, so in both our accounts we have 5Y set to relend onto the 1Y as well as 1Y to lend into 1Y. One does have to be careful I guess in that RS can change this stuff anytime they like after all they changed it this time for their own business reasons I feel. The interesting thing about the 1Y though is its very bursty and I think someone said it uses mortgage type funding so there is potential for it always to be lucrative for the opportunist. All IMHO of course and open to change.
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upperdeane
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Post by upperdeane on Dec 18, 2019 15:57:39 GMT
I had relend on my E/D 1Y and it finished the last loan early but as it was on relend it remained available and was in offer mode but was not matching - it's there where I made the mistake I should have kept it there and offered the additional £10 loan first then removed the relent/offered closed loan (I purposely had the relends set high as I wanted to move most relent money to the ISA side now for tax reasons). In effect I wanted to reduce the amount on the offer and send the rest to the ISA side but I stopped it by mistake and it closed my 1Y in the E/D side at that point. It wasn't a big deal I lost it as I still pay tax so I lost it. I'm also now finding that we should be in the 1Y, the rates seem better there too and we are retired so it's time to start shortening our lend periods to 12 months rather than 5 years, so in both our accounts we have 5Y set to relend onto the 1Y as well as 1Y to lend into 1Y. One does have to be careful I guess in that RS can change this stuff anytime they like after all they changed it this time for their own business reasons I feel. The interesting thing about the 1Y though is its very bursty and I think someone said it uses mortgage type funding so there is potential for it always to be lucrative for the opportunist. All IMHO of course and open to change. Thanks aju
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