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Post by oppsididitagain on May 4, 2020 8:00:46 GMT
Can't see RS receiving many new investments after this. Can get 1.5% with full protection and access to funds when required. I can see RS RYI dropping to virtually zero, especially as RS are making new loans. If you have been lending at 3%, the new rate is an annualised rate of 2% (not 1.5%) for 2020, but still not very attractive. Considering the BOE rate is now .10 % people are going to have to get used to lower rates everywhere. It could be worse, RS could start charging you a fee as well ! and as I have said before on another thread, the quickest way (at the moment) to get your money back is to hope a loan defaults and the PF pays out for you.
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Post by oppsididitagain on May 4, 2020 8:03:55 GMT
(Was anyone reinvesting on the platform just prior to this? I lent on the 1 year but got a lower than asked for rate due to a mix up with how the UI now works and my lack of familiarity with it. Fortunately they have shot their own fox b/c the only gave me 3 months on a swap with an sellout investor which means that's coming out 'early' and that's 'good' thing for a change.) I got £700 matched at 8.3% on March 16 in 1 year. This loan is still active
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ashe
Posts: 53
Likes: 36
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Post by ashe on May 4, 2020 8:04:10 GMT
Bit simplistic. My behaviour in terms of withdrawing was affected by the relative terms and fees between my loans. RS would be waving a red rag to a bull if they forced the same rates on people who didn't put in withdrawal requests earlier due to having higher rates. The way the cut is being done is exactly as described in their terms and conditions that have been in place for years. It makes sense to stick to the terms and conditions. Yes, definitely. I was mainly responding to flaws in the argument someone put forward that everyone should get the same rates 'because everyone is in the same position'.
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rscal
Posts: 916
Likes: 504
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Post by rscal on May 4, 2020 8:07:40 GMT
I just noticed they have changed the website again. There is no 'radio button' to select 'by date' on the payments due this month page and I would always change that from default to by date for ease of reading. Now it goes by default (i.e by separate contracts on the same date in date order)
(I think they are changing the code as we speak to get the change announced 'by managment' somehow implemented 'IRL'. The payments cannot be sorted at the top at present)
(YES. If you now click on an amortising loan - 5 year - and expand the Repayment (history) they now have twol columns for interest: 'Investor Provision Fund contribution' and 'Interest less Provision Fund contribution' - so you can see 'the join')
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Post by investor1925 on May 4, 2020 8:20:01 GMT
All my investments are in the 1 year market & my strategy has been to not re-invest automatically, but to see what the market rate is whenever I get a loan returned & play it by ear at that point. My strategy has just changed to withdraw everything that is returned & drop it into the bank. I can always put it back in when this is all over Sadly for RS, if everyone does that, the business will just slowly whither away & I may not ever be able to put it back.
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puddleduck
Member of DD Central
Posts: 537
Likes: 489
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Post by puddleduck on May 4, 2020 8:21:23 GMT
I see no mention of a reduction on the old 1 and 5 year deprecated accounts.
Have these accounts avoided the cuts?
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pip
Posts: 542
Likes: 725
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Post by pip on May 4, 2020 8:23:06 GMT
Surely all investors should get the same rate as all are now in the same position. Bit simplistic. My behaviour in terms of withdrawing was affected by the relative terms and fees between my loans. RS would be waving a red rag to a bull if they forced the same rates on people who didn't put in withdrawal requests earlier due to having higher rates. I wouldn't say simplistic is the right word here and a bit patronising to be honest. I have no skin in the game here as I withdraw everything from RS after they tried to force me to have to declare myself as a sophisticated investor. If a corporate issuer of debt decides that it cannot repay short term loans on terms and as part of a refinancing plan it will cut all debt holders interest rates and lengthen the terms of short term debt holders, then I can assure you that short term bondholders would not accept this without getting the same rate as their longer term fellow debt holders. The RS T&C's allow them to pretty much unilaterally change the rates midway through investments, but still in this scenario I think it would have been better to just lump ratesetter investors in the same pot. I think a fairer mechanism would have been to say: 1) All investments will get half of the average rate of say 4.5%, with the rest going to the provision fund. I suspect if things worsen/are as bad as I fear for small businesses this may need to turn into all interest (and potentially some capital) will go into provision fund. 2) Funds will be released back to investors as/if they repay with the rest coming from the provision fund. 3) RS will waive all sellout fees if/when this is possible. I personally think that they should suspend all sellout function at present as the value of outstanding loans is not possible to judge and it is the fairest thing for both buyers and sellers. I think RS getting into a position where it re-sold a bunch of dud loans to businesses that are closed is not a place it wants to be.
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rscal
Posts: 916
Likes: 504
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Post by rscal on May 4, 2020 8:24:21 GMT
I was worried about bullet payment (1 year) loan interest being split since there is only one interest payment period - at redemption. But the repayment breakdown reveals you are just being docked interest for the proportion of the loan falling after the effective date of 4 May (phew!)
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Post by gricehead on May 4, 2020 8:25:36 GMT
I see no mention of a reduction on the old 1 and 5 year deprecated accounts. Have these accounts avoided the cuts? Not mentioned in the email, but it is mentioned at www.ratesetter.com/stabilisation-period. And the investor contribution to provision fund field is populated for all my 1 year loans.
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Post by investor1925 on May 4, 2020 8:26:58 GMT
I see no mention of a reduction on the old 1 and 5 year deprecated accounts. Have these accounts avoided the cuts? No, they have not avoided the cuts. If you list your loan holdings, it now displays your expected interest less the provision fund contribution. It's 50% same as the others
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pikestaff
Member of DD Central
Posts: 2,136
Likes: 1,484
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Post by pikestaff on May 4, 2020 8:34:22 GMT
If you have been lending at 3%, the new rate is an annualised rate of 2% (not 1.5%) for 2020, but still not very attractive. Considering the BOE rate is now .10 % people are going to have to get used to lower rates everywhere. It could be worse, RS could start charging you a fee as well ! and as I have said before on another thread, the quickest way (at the moment) to get your money back is to hope a loan defaults and the PF pays out for you. You can get more interest than 1.5% in a fully protected account. Hmm. MSE has a few that are not term deposits, but they are very limited as to both time and the amount on which the interest is paid. For significant amounts with a FSCS guarantee the best rate they currently have is 1.75% for a 3 year term deposit at FCMB Bank UK (no, I've not heard of them either). If you are willing to lock you money up for that long, consider Downing Crowd Funding. The bonds on offer there (not frequently, they are very selective) are not guaranteed but have low LTVs. Or, for liquidity, invest in listed bonds via either a bond fund or Wise Alpha. But that comes with mark-to-market risk.
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rscal
Posts: 916
Likes: 504
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Post by rscal on May 4, 2020 8:36:44 GMT
I see no mention of a reduction on the old 1 and 5 year deprecated accounts. Have these accounts avoided the cuts? Not mentioned in the email, but it is mentioned at www.ratesetter.com/stabilisation-period. And the investor contribution to provision fund field is populated for all my 1 year loans. Wait.... they sent 'an email'?? Just checking now... (time of sending... '9.06') Phew, am i relieved....
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Post by supernumerary on May 4, 2020 8:38:27 GMT
All my investments are in the 1 year market & my strategy has been to not re-invest automatically, but to see what the market rate is whenever I get a loan returned & play it by ear at that point. My strategy has just changed to withdraw everything that is returned & drop it into the bank. I can always put it back in when this is all over Sadly for RS, if everyone does that, the business will just slowly whither away & I may not ever be able to put it back. My emphasis on your quote. Yes, it is a VERY sad situation and those were my similar thoughts, in an earlier posting on this thread...
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Post by shanghaiscouse on May 4, 2020 8:41:06 GMT
I notice when you log in on the first page the going rate column is still showing 3%, 3.5% and 4%. It would be typical of the behaviour of larger P2Ps if they tried to make an argument not to update this to the 1.5%, 1.75% and 2% numbers they have announced. Its rather like Funding Circle boasting how its investor numbers keep going up - its because you cannot get your money out !
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Post by p2plender on May 4, 2020 8:41:19 GMT
Was expecting this to be honest and if it means platforms surviving and coming out the other end then so be it. At least they are trying something. We're in rotten times, get used to it. Not long before negative rates being the norm the way central banks are playing things so enjoy these new rates while they last..
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