ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 30, 2015 14:57:18 GMT
Just had an email about a new loan to same borrower which existing #101 lenders can migrate their holdings to and get 1% cashback. Deadline 5pm 31/3 to accept. 3.3mil, 10%, 65LTV
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Post by davee39 on Mar 30, 2015 15:21:15 GMT
So, this was supposed to be repaid in full last Friday, got delayed and is now up for refinance into a bigger loan?. I will eagerly await the details.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 30, 2015 15:22:09 GMT
I'm not making the same mistake twice, still waiting on cashback from NWBL.
Possible drawdown delays, spelling mistake on the paperwok, and your 1% cashback soon gets eaten up.
I hope to be feeding the worms instead.
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ianb
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Post by ianb on Mar 30, 2015 15:35:02 GMT
I'm not making the same mistake twice, still waiting on cashback from NWBL. Possible drawdown delays, spelling mistake on the paperwok, and your 1% cashback soon gets eaten up. I hope to be feeding the worms instead. Oh ! I don't want to feed any worms (or vice versa). What put me off the new one is that its a bullet (all interest at the end) - I double checked this with Dominic, timing is approx. 2 weeks to repay the existing loan and launch this, subject to the usual caveats.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 30, 2015 15:35:25 GMT
So, this was supposed to be repaid in full last Friday, got delayed and is now up for refinance into a bigger loan?. I will eagerly await the details. Its a totally different loan for a different project. Existing loan is to be repaid with sale to a REIT.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 30, 2015 16:06:35 GMT
I'm not making the same mistake twice, still waiting on cashback from NWBL. Possible drawdown delays, spelling mistake on the paperwok, and your 1% cashback soon gets eaten up. I hope to be feeding the worms instead. Oh ! I don't want to feed any worms (or vice versa). What put me off the new one is that its a bullet (all interest at the end) - I double checked this with Dominic, timing is approx. 2 weeks to repay the existing loan and launch this, subject to the usual caveats. Hadn't realized it's rolled up interest for 18 months. That's equivalent to 9.17% interest compounded monthly for 18months.
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oldgrumpy
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Post by oldgrumpy on Mar 30, 2015 16:47:42 GMT
"That's equivalent to 9.17% interest compounded monthly for 18months"
I might as well spread my ninepence among the wind machines at 9.75% while I decide what to do.
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Post by reeknralf on Mar 30, 2015 19:43:58 GMT
I continue to be mystified by how p2p platforms calculate interest. The headline rates almost never correspond to what is actually paid. On the whole the interest paid is higher than the advertised rate, so I don't complain.
We don't have the repayments for this loan, so I tried a couple of others.
#156 listed at 10%, xirr 10.38%, gross repayment 1.05 times original loan, paid over 6 months. 0.05 is 6/12 of 0.1. A stupid way to present the figures, but OK.
#151 listed at 11.5%, xirr 12.11%, gross repayment 1.54 times original loan, paid over 5 years. 12.11% nearly corresponds to (1+(0.115/12))^12. Still a stupid way to present the numbers, but at least consistently stupid.
Back to this loan.
Under a normal definition of 10% pa, after 18 months I get 1.1^(3/2) after 18 months, £1154 for each £1000 invested.
Extrapolating from the above examples, '10% pa' becomes 10/12=0.83% per month, or 10.47% xirr ((1+(0.1/12))^12), £1161 for each £1000 invested.
If 10% pa were distorted even further to mean 15% after 18 months this is 9.77% annualised xirr.
I can't see any way to get 9.17%, which yields only 14.1% after 18 months.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 30, 2015 20:44:11 GMT
Oh ! I don't want to feed any worms (or vice versa). What put me off the new one is that its a bullet (all interest at the end) - I double checked this with Dominic, timing is approx. 2 weeks to repay the existing loan and launch this, subject to the usual caveats. Hadn't realized it's rolled up interest for 18 months. That's equivalent to 9.17% interest compounded monthly for 18months. Actually, it should be 9.355% not 9.17%.
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Post by whitmanthecat on Mar 30, 2015 21:12:54 GMT
I continue to be mystified by how p2p platforms calculate interest. The headline rates almost never correspond to what is actually paid. On the whole the interest paid is higher than the advertised rate, so I don't complain. While I'm with you that the rates aren't necessarily the most helpful to compare, I disagree with your first paragraph. The headline rates always correspond to what is actually paid *. For a (non-amortising) loan amount, headline rate and term in years, then multiply the three together and that's the interest paid. So there's no mystery in how interest is calculated. It's just a convention for loans, but makes no mention of timing. Then, once you've got the interest paid, timing is significant so you're right in doing an IRR to get effective rates that give relevant comparisons for us lenders. You can ignore the headline rate, other than it being roughly near the IRR. * Actually the borrowers pay more to include AC's fee, but individual lenders need not count that.
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mikes1531
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Post by mikes1531 on Mar 31, 2015 2:56:44 GMT
I'm not making the same mistake twice, still waiting on cashback from NWBL. Possible drawdown delays, spelling mistake on the paperwok, and your 1% cashback soon gets eaten up. What put me off the new one is that its a bullet (all interest at the end) - I double checked this with Dominic, timing is approx. 2 weeks to repay the existing loan and launch this, subject to the usual caveats. Important details such as this ought to be in the deal description rather than having to be extracted via a phone call to Dominic. Was that just an oversight, or are AC trying to ensure that nothing is 'promised' in writing? Without that info, I was presuming the current loan would be paid off as we have been told it would be, this week. The email announcing the new loan opportunity indicates the loan hasn't been funded fully yet, which is why it isn't on the Upcoming Loans list. Since it typically takes at least a month from auction close to drawdown, I was expecting there to be a gap of a month or more between funds coming out of Loan #101 and going into the new loan. That would negate the advantage of the 1% cashback, so there's not much point in rolling an investment over. With the new loan being £750k larger than #101, I expect there will be plenty of it available on the Aftermarket for some considerable time after drawdown, especially since no interest is paid until the loan is repaid.
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tonyr
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Post by tonyr on Mar 31, 2015 6:07:40 GMT
What put me off the new one is that its a bullet (all interest at the end) - I double checked this with Dominic, timing is approx. 2 weeks to repay the existing loan and launch this, subject to the usual caveats. Important details such as this ought to be in the deal description rather than having to be extracted via a phone call to Dominic. Was that just an oversight, or are AC trying to ensure that nothing is 'promised' in writing? Without that info, I was presuming the current loan would be paid off as we have been told it would be, this week. The email announcing the new loan opportunity indicates the loan hasn't been funded fully yet, which is why it isn't on the Upcoming Loans list. Since it typically takes at least a month from auction close to drawdown, I was expecting there to be a gap of a month or more between funds coming out of Loan #101 and going into the new loan. That would negate the advantage of the 1% cashback, so there's not much point in rolling an investment over. With the new loan being £750k larger than #101, I expect there will be plenty of it available on the Aftermarket for some considerable time after drawdown, especially since no interest is paid until the loan is repaid. From talking to Martin yesterday I believe they are looking at mid April for the drawdown of the new loan.
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ianb
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Post by ianb on Mar 31, 2015 6:15:40 GMT
Important details such as this ought to be in the deal description rather than having to be extracted via a phone call to Dominic. Was that just an oversight, or are AC trying to ensure that nothing is 'promised' in writing? To be fair to AC, this info was in the credit report attached to Dom's email, I rang him up to double check and get an idea of the timing.
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jjc
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Post by jjc on Mar 31, 2015 8:02:15 GMT
It wasn't mentioned (didn't even appear) on the comparison table sent out with the teaser. I've got 2 cars both identical except one has no engine. You bought the one with the engine 6 months ago, if I was to try to sell you the other one & you asked for a comparison sheet maybe you'd expect to see the (lack of) engine on the table? Mmmm
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pikestaff
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Post by pikestaff on Mar 31, 2015 8:30:07 GMT
AFAIK AC calculates interest at 1/12 of the stated annual rate per month, compounded monthly - regardless of when interest is actually paid. If this is not clarified in the full credit report (which we do not have), I would expect it to be clarified in the Q&A, once the new loan appears in the list of upcoming loans.
The borrower's track record to date is good, and I am minded to invest in the new loan. However, I will do so on the aftermarket rather than via the cashback offer. The new loan is for £3.3m so there should be plenty available. A 1% cashback is not enough to tempt me to jump in early - without the benefit of the full credit report or the Q&A, and with the risk that the loan is drawn late or never at all.
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