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Post by df on May 4, 2020 17:30:14 GMT
Bad news, but I'm not too disappointed. My average was 6.1%. In the current market condition 3.05% is better than nothing. I still have some fixed rate bank accounts that pay between 2% and 3%, but I don't expect we'll see any new offers like this within next few years. Trying to look at positive side of it. RS reduction of rate gives some reassurance that there is no expected loss of lenders' capital. I really don't see how this follows. Could have equally said that an ICR of 113% last month gives confidence that there is no expected risk of losses of interest. Well, the 50% hair cut going to PF gives some degree of comfort. I'm not saying that there is any guarantee of capital protection, but as it stands now I see my funds in RS are in better position than in Col, FS, Ly, BM and mysterious FO where I expect significant loss of capital. There's not much I can do about it anyway, except joining RYI queue which is not likely to be moving in near future (looking at what people are reporting in this forum it seems like there are hardly any buyers for RS loans).
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gg
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Post by gg on May 4, 2020 17:36:17 GMT
People with a full time job (maybe two in the household) would have invested with an expectation to be able to get their money out within a few days (or even weeks at worst case). This was virtually unpredictable other than to the most seasoned investors. My view is that a fairer route to money, when there’s clearly a run on the platform, would be for each investor to receive their money back in a fairer way. The queue simply isn’t fair. Fortunately, I only have a few grand to get out having panicked when The Times did the attempted hatchet job on P2P back in January. gg I don't know why it's relevant what job you have, no one should have invested in P2P with money that they might need "within a few days". It's not about predictability, it's about risk. People doing this clearly did not have the requisite understanding of P2P - or, perhaps, personal finance in general - to be investing (a consistent theme of this board). They shouldn't have been anywhere near P2P and need to take at least some responsibility for this. One assumes, for example, they didn't read any of the warnings plastered all over these websites or the T&C. That's really, really not good. You clearly don’t want to listen. Even those not needing the money for a few days might have expected to get it back in few weeks. Might be a few months. Might be never. gg
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pip
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Post by pip on May 4, 2020 17:45:49 GMT
I really don't see how this follows. Could have equally said that an ICR of 113% last month gives confidence that there is no expected risk of losses of interest. Well, the 50% hair cut going to PF gives some degree of comfort. I'm not saying that there is any guarantee of capital protection, but as it stands now I see my funds in RS are in better position than in Col, FS, Ly, BM and mysterious FO where I expect significant loss of capital. There's not much I can do about it anyway, except joining RYI queue which is not likely to be moving in near future (looking at what people are reporting in this forum it seems like there are hardly any buyers for RS loans). I really have no idea how an interest rate hair cut gives any comfort that capital is safe. Reality is that it will be months before the full scale of the impact of COVID-19 on the health of the loan book will be known. How many of the businesses lent to are closed, how many have seen huge revenue declines, how many people lent to have lost their jobs, how many borrowers just decide that other bills should be prioritised? Maybe a lot will be fine, but at present it's way too early to make any predictions.
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ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on May 4, 2020 18:09:55 GMT
I support the interest rate cut, especially if it means RS surviving this period which is difficult for everyone. I would rather lose interest for a few months than lose RS and my capital! I'm not pulling money out because I think that will only make the problem worse like the run on the banks during the last financial crisis. I hope my faith in RS and its investors will be justified! IMHO you can't put faith in ANY P2P Platform, and you definitely shouldn't. Platforms are vastly inferior to Banks, owned by individuals who invariably have FA real business experience, and their interests are totally aligned with Borrowers, not with Lenders. Finally, to top it off, add in the FCA's proven track record of culpable complacency, with virtually zero interest in policing P2P properly and aiding & abetting rampant abuses, which includes *criminal activity. Honestly, have a very good rethink about "having faith". * I am not suggesting there is criminal activity at Ratesetter, come to your own conclusions regarding Platforms in general.
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corto
Member of DD Central
one-syllabistic
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Post by corto on May 4, 2020 18:26:34 GMT
Bad news, but I'm not too disappointed. My average was 6.1%. In the current market condition 3.05% is better than nothing. I still have some fixed rate bank accounts that pay between 2% and 3%, but I don't expect we'll see any new offers like this within next few years. Trying to look at positive side of it. RS reduction of rate gives some reassurance that there is no expected loss of lenders' capital. I really don't see how this follows. Could have equally said that an ICR of 113% last month gives confidence that there is no expected risk of losses of interest. It follows from the option that RS might truly believe that with the current reduction they can get through the mess.
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Post by scepticalinvestor on May 4, 2020 18:45:05 GMT
Looks like there is a change in today's payout blurb, they've taken out the part claiming that "more than 9 out of 10 RateSetter investors have continued to invest with us."Might just be an inadvertant omission though.
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Greenwood2
Member of DD Central
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Post by Greenwood2 on May 4, 2020 19:10:49 GMT
I support the interest rate cut, especially if it means RS surviving this period which is difficult for everyone. I would rather lose interest for a few months than lose RS and my capital! I'm not pulling money out because I think that will only make the problem worse like the run on the banks during the last financial crisis. I hope my faith in RS and its investors will be justified! IMHO you can't put faith in ANY P2P Platform, and you definitely shouldn't. Platforms are vastly inferior to Banks, owned by individuals who invariably have FA real business experience, and their interests are totally aligned with Borrowers, not with Lenders. Finally, to top it off, add in the FCA's proven track record of culpable complacency, with virtually zero interest in policing P2P properly and aiding & abetting rampant abuses, which includes *criminal activity. Honestly, have a very good rethink about "having faith". * I am not suggesting there is criminal activity at Ratesetter, come to your own conclusions regarding Platforms in general. RS always said that in the event of a problem with the PF they would reduce interest rates and in the worst case scenario take a haircut off capital. What is anyone complaining about?
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Post by Badly Drawn Stickman on May 4, 2020 19:15:54 GMT
Looks like there is a change in today's payout blurb, they've taken out the part claiming that "more than 9 out of 10 RateSetter investors have continued to invest with us."Might just be an inadvertant omission though. It has slowly evolved from the early version, it is now clear that there are different payments for the access as opposed to 1 & 5 year. Which was as issue discussed on the forum What constitutes an investor was a tepid topic last week on the forum, and has maybe been removed as a result? Maybe if we discuss the cancellations figure not changing recently that might fade away. Ratesetter wisely maybe do not respond, but they clearly read. So we need to find who posted the daft idea of reducing interest, then we will know who to blame.
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jcb208
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Post by jcb208 on May 4, 2020 19:44:48 GMT
One thing for sure If Ratesetter get through this year they will need to find a new product as most of us who invested in access will not do so again as its obviously slower to RYI then the 1 &5 year market
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sd2
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Post by sd2 on May 4, 2020 20:23:06 GMT
How long before RS make a capital reduction? They will then be unable to state "No one has ever lost money ......" I tried to estimate this with data. TLDR - on current default projections they *probably* won’t have to, but the remaining offer is rather un-inviting. Short term: The current run-rate on the PF so far due to excess defaults is ~£1.2m/month, = 0.14% of total capital, = 1.7% per year. (£8.25m cash in March reduced to £6.96m April, £5.84m on 4th May). Therefore, diverting roughly 1.5-2% of interest payments into the PF should keep it stable short term. OK. Medium-term: RS calculation based on new data shows expected future losses £39.2m, of which they have £28.9m PF expected previously. To return to 125% coverage, they need £49m PF, ie they are £20m short. Diverting 1.7% interest on £830m total assets, will generate £14m/yr additional inflow to the PF. Then it would take about 18 months to build the PF back to target. That doesn’t immediately cog with why RS claim that this measure will only last 8 months. To recover the PF in that short a time, RS also need to subsidise the PF by about £10m to “save the platform”. This is probably achievable partly from the expected sellout fees and excess interest headroom (6%+) from 5yr accounts, and partly from taking a haircut themselves on the RS intermediation fees. All that “headroom” between the 3-6% investor rates on the term accounts, to the 3% Access account, has been going into RS’s pocket. They can afford to give that profit up. Also, since they are making fewer new loans, their cost of acquiring new business (on both sides of the fence) will drop. Long-term: Partly depends on whether the RS modelling of default ratios is correct. This is more of a slow-burner, and with the new cash injections shouldn’t become an issue for at least the eight months. But the real question is whether the platform *has* a future beyond the length of the current set of 5-year loans. The only product they currently offer (Access) has an interest rate that doesn’t compensate for any risk, and has given up on matching interest rates between investors and borrowers. I suspect that RS will just pivot to become an online ”challenger” bank with completely classic model, FSCS cert’d, with the PF taking the role of its Basel2 required tier 1 capital. When the lock down is over all those who have taken an interest and capital holiday will either have the their loans extended or will pay higher interest and capital to get the loans up to date??? Wouldn't this help the provision fund?? And my beer fund?
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Post by drphil on May 4, 2020 20:38:27 GMT
Looks like there is a change in today's payout blurb, they've taken out the part claiming that "more than 9 out of 10 RateSetter investors have continued to invest with us."Might just be an inadvertant omission though. It has slowly evolved from the early version, it is now clear that there are different payments for the access as opposed to 1 & 5 year. Which was as issue discussed on the forum What constitutes an investor was a tepid topic last week on the forum, and has maybe been removed as a result? Maybe if we discuss the cancellations figure not changing recently that might fade away. Ratesetter wisely maybe do not respond, but they clearly read. So we need to find who posted the daft idea of reducing interest, then we will know who to blame. I don't understand your point. The cancellations figure has been increasing steadily over the past few weeks.
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Post by df on May 4, 2020 21:42:33 GMT
Well, the 50% hair cut going to PF gives some degree of comfort. I'm not saying that there is any guarantee of capital protection, but as it stands now I see my funds in RS are in better position than in Col, FS, Ly, BM and mysterious FO where I expect significant loss of capital. There's not much I can do about it anyway, except joining RYI queue which is not likely to be moving in near future (looking at what people are reporting in this forum it seems like there are hardly any buyers for RS loans). I really have no idea how an interest rate hair cut gives any comfort that capital is safe. Reality is that it will be months before the full scale of the impact of COVID-19 on the health of the loan book will be known. How many of the businesses lent to are closed, how many have seen huge revenue declines, how many people lent to have lost their jobs, how many borrowers just decide that other bills should be prioritised? Maybe a lot will be fine, but at present it's way too early to make any predictions. Capital is never safe, but functioning PF gives some comfort. I absolutely agree - "Reality is that...at present it's way too early to make any predictions"
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Stonk
Stonking
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Post by Stonk on May 4, 2020 22:14:19 GMT
When the lock down is over all those who have taken an interest and capital holiday will either have the their loans extended or will pay higher interest and capital to get the loans up to date??? Wouldn't this help the provision fund?? And my beer fund?
If ....
... every borrower who is currently experiencing difficulties paying is given a payment holiday in time ...
... and ...
... they all subsequently recover completely from the crisis and get their payments fully back on track ...
... then ...
... ultimately they will repay the same capital and extra interest, thus helping both the PF and your beer fund.
But this is not going to happen. Many companies will fail completely, and countless more companies and individuals will never recover to a level where they can repay what they previously could afford. Those that make it through unscathed will be offset against potentially total losses of those that do not.
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Post by inquiete on May 5, 2020 10:16:54 GMT
I have all of my reinvestment settings set as high as possible - eg at 8% for access.
It seems that money coming back from my borrowers (capital and interest) avoid passing through the holding account - or else pass through very rapidly - and are being lent out at rates far lower than my reinvestment settings. This situation gets worse I imagine after yesterday's rate cut announcement.
Am i misunderstanding how the reinvestment settings work? I would have thought that setting these at the top of the rate range would have meant I would have access to all capital and interest repayments to be able to withdraw.
Thanks!
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ceejay
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Post by ceejay on May 5, 2020 10:29:07 GMT
I have all of my reinvestment settings set as high as possible - eg at 8% for access. It seems that money coming back from my borrowers (capital and interest) avoid passing through the holding account - or else pass through very rapidly - and are being lent out at rates far lower than my reinvestment settings. This situation gets worse I imagine after yesterday's rate cut announcement. Am i misunderstanding how the reinvestment settings work? I would have thought that setting these at the top of the rate range would have meant I would have access to all capital and interest repayments to be able to withdraw. Thanks! Yes. This has been covered literally dozens of times on these forums. If you're in Access then what looks like a repayment mostly isn't, it's the monthly rollover of a loan which carries on until the loan really repays or until you manage to do an RYI on it. Look closely at your transaction logs and you will see a repayment for X for a given loan closely followed by an investment of (X-a little bit). Your reinvestment settings only apply to the small amount of real capital repayment and interest.
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