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Post by wiseclerk on Sept 21, 2015 7:52:42 GMT
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jonah
Member of DD Central
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Post by jonah on Sept 21, 2015 19:45:45 GMT
Sounds good for Z / RS to get more borrowers through the door. The fixed 7.9 is an interesting rate... Close to the 5yr RS number I seem to see at logon time. Given 2x margins though, unless RS cuts theirs due to needing to do less due diligence, I don't see this driving up rates too much. Every little helps though.
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Post by wiseclerk on Sept 22, 2015 5:47:38 GMT
The 7.9% is APR for borrowers including fees, so the nominal interest rate will be lower.
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pikestaff
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Post by pikestaff on Sept 22, 2015 13:14:43 GMT
I would think most 4-5 year borrowers on RS are paying a lot more than 7.9% once RS's normal margin and the payment into the provision fund are taken into account.
I doubt that RS will be making any money from this deal in the short term. They will be counting on market rates coming down when p2p ISAs come on board, at which point it should be profitable for them. Until then the volumes will probably be small anyway.
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Post by p2plender on Sept 22, 2015 13:55:22 GMT
A bail out consolidation loan if I read correctly..
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Post by wibble on Sept 22, 2015 15:24:33 GMT
This is adding another "middle man" to the p2p market, which seems counterproductive to me.
I recently got a Zopa loan for under 5%, including fees, I'm clearly not Salaryfinance's target audience.
Which makes me think ... "who are"?
1. Those who are unaware of p2p offerings (otherwise they'd go direct, surely?)
2. Those with a credit record worse than mine (mine is good)
3. Others!
Number 2. above worries me a little - it implies a higher level of risk entering the p2p market.
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arbster
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Post by arbster on Sept 22, 2015 15:36:22 GMT
1. Those who are unaware of p2p offerings (otherwise they'd go direct, surely?) 2. Those with a credit record worse than mine (mine is good) 3. Others! Number 2. above worries me a little - it implies a higher level of risk entering the p2p market. I suppose some of #2 is mitigated by the fact that the repayments are made directly from the salary payments, assuming they stay in employment after taking the consolidation loan.
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Post by westonkevRS on Sept 23, 2015 5:16:08 GMT
I'm not going to go into the details of this deal or the financials. In truth I don't know them all.
However I've worked with Russian and Ukrainian banks, and also in multiple central European countries where "salary projects" are common. Basically everyone gets paid onto what is effectively a pre-paid card which they can either spend via the scheme or cash (at cost). Employees have no choice, even if they have their own current account. Despite these territories being high risk and high defaults, loans made to these employees had very low default risk. Fraud was eliminated, intention to pay eliminated and credit risk significantly reduced. In some instances the employer even guarantored the loan.
Employees got credit they would otherwise have been rejected for, or approved but expensive. All good.
Kevin.
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