djpix99
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Post by djpix99 on Feb 2, 2015 20:28:59 GMT
I'm just curious does interest earned pre drawdown get paid at drawdown or when the loan is repaid?
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star dust
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Post by star dust on Feb 2, 2015 20:44:08 GMT
I'm just curious does interest earned pre drawdown get paid at drawdown or when the loan is repaid? If it's any kind of boat other than a super yacht, when it's repaid (all of these are drawn down now anyway). If it's a monthly interest only loan, or you selected monthly interest, then you will receive interest accrued up to the end of the month preceding the drawdown date. If you selected interest up-front, the whole lot is paid on drawdown.
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djpix99
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Post by djpix99 on Feb 2, 2015 22:13:45 GMT
Thanks for that info
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Post by chrisuk on Feb 11, 2015 11:20:18 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this?
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 11, 2015 11:25:21 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this? What they charge to the borrowers is far in excess of what we see, so their trading capital will be very healthy. Try looking for bridging finance - you'll see that the rates you'd have to pay are eye-watering  . And if the next question is 'Why would anyone pay those high rates?" (a question that crops up fairly regularly with platforms that provide bridging loans), the answer is that if the potential return to the borrower is even higher, then it's worth it for them.
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j
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Post by j on Feb 11, 2015 12:09:59 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this? SS have also renegotiated with borrowers on a couple of loans when draw down dragged on for much longer than anticipated & the borrower duly obliged by covering the extra unanticipated interest obligation SS had initially promised to honour.
ramblin rose, what rates have you seen? A quick search yielded me rates of 0.65%-1.6% pm
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will
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Post by will on Feb 11, 2015 12:13:15 GMT
I've seen it on here, somewhere, that savingstream charge their customers 1.5% to 3% on the loans ...
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 11, 2015 12:28:47 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this? SS have also renegotiated with borrowers on a couple of loans when draw down dragged on for much longer than anticipated & the borrower duly obliged by covering the extra unanticipated interest obligation SS had initially promised to honour.
ramblin rose, what rates have you seen? A quick search yielded me rates of 0.65%-1.6% pm
It's a year or more since I looked, admittedly, but the 1.5% to 3% pm mentioned by will is along the lines of what I remember. Maybe the rates are coming down as competition in the field hots up? Or maybe those lower rates would only be available in certain circumstances?
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 11, 2015 12:41:02 GMT
It's a year or more since I looked, admittedly, but the 1.5% to 3% pm mentioned by will is along the lines of what I remember. Maybe the rates are coming down as competition in the field hots up? Or maybe those lower rates would only be available in certain circumstances? SS's Home page states that borrowers pay a rate of between 1.5% and 3% per month. I'm sure it will be a sliding scale related to the size of the loan. IMHO this rate will also exclude legal fees etc. Yes - I was referring to the wider market in general - sorry, I confused my reply to j by referring to your post.
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geoff
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Post by geoff on Feb 11, 2015 13:05:07 GMT
It's a year or more since I looked, admittedly, but the 1.5% to 3% pm mentioned by will is along the lines of what I remember. Maybe the rates are coming down as competition in the field hots up? Or maybe those lower rates would only be available in certain circumstances? SS's Home page states that borrowers pay a rate of between 1.5% and 3% per month. I'm sure it will be a sliding scale related to the size of the loan. IMHO this rate will also exclude legal fees etc. Interestingly, Lendy's website states "Rates from 0.75% per month".
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ramblin rose
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Post by ramblin rose on Feb 11, 2015 14:58:09 GMT
ramblin rose SS's Home page states that borrowers pay a rate of between 1.5% and 3% per month. I'm sure it will be a sliding scale related to the size of the loan. IMHO this rate will also exclude legal fees etc. Interestingly, Lendy's website states "Rates from 0.75% per month". Ah yes - nothing like a bit of consistency, eh 
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elgerod
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Post by elgerod on Feb 11, 2015 15:47:20 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this? Chris, I interpreted your question slightly differently to others. SS don't pay interest on loans that have not been drawndown until the loan is actually drawndown. So, from a cashflow point of view, they can afford to do it as the funds to pay the (backdated) interest will no doubt be deducted from the loan funds disbursed to the borrower. When a loan is drawndown, my understanding is that interest is paid to lenders, who had committed funds, up to the end of the month preceding the date of drawdown.
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ramblin rose
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Post by ramblin rose on Feb 11, 2015 16:07:21 GMT
What slightly concerns me is how 'SavingStream' can afford to pay interest to lenders on loans that have not been drawndown. Does anyone have thoughts on this? Chris, I interpreted your question slightly differently to others. SS don't pay interest on loans that have not been drawndown until the loan is actually drawndown. So, from a cashflow point of view, they can afford to do it as the funds to pay the (backdated) interest will no doubt be deducted from the loan funds disbursed to the borrower. When a loan is drawndown, my understanding is that interest is paid to lenders, who had committed funds, up to the end of the month preceding the date of drawdown. Unless SS manage to negotiate it (as they have in one case that we know of) the borrower is not liable for payment of interest until the loan is drawn down, so the backdated interest is paid by SS and not by the borrower.
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kermie
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Post by kermie on Feb 11, 2015 20:13:10 GMT
Also note that interest for the whole 6/7 months is often retained up-front, in which cases make paying lenders the pre-drawdown interest rather straightforward.
A challenge arises if loans that are made available to lenders for some reason fails to draw down at all and get withdrawn; that leaves SS on the hook, and clearly they need to manage that risk....but with the (I suppose) comfortable margin they are making elsewhere, I can't see it being an issue in all but the most extreme of cases.
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Post by chrisuk on Feb 11, 2015 23:17:14 GMT
Thank you for your replies. I have asked 'SavingStream' to issue a reply which will hopefully give us some reassurance.
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