oik
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Post by oik on Jan 12, 2016 18:14:07 GMT
Lending on Ratesetter's "Monthly" market I sort of assumed I'd be lending for about a month or so: be it 28 days, or a calender month. Turns out that, for Ratesetter, a "month" can mean whatever Ratesetter decides it means.
Could be five weeks or more, or could be just 7 days before the money you thought you'd just agreed to lend for a month will need to be placed elsewhere. You won't know what a "Ratesetter month" is and for how long you've loaned your money until after you've loaned the money. For example, the loan for the few thousand I lent today, 12 Jan, I see is due to mature in just 7 day time on 19 Jan, while another loan made shortly before won't mature for over 5 weeks.
That's always assuming someone doesn't decide to end the loan even earlier, or more seriously, if Ratesetter have a liquidity issue in which case it seems they reserve the right to retain your loot for just about as long as they require. Or if Ratesetter has one of it's famous "hiccups" then the money you were told had been lent out won't have been lent at all.
Hopefully the financial markets will soon look more inviting so there'll be no more need for all the faffing about with the likes of Ratesetter. (And why anyone would lend through Ratesetter before making use of the FSCS protected current accounts paying 3-5%, as seems to happen, is a total mystery to me.)
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Post by p2plender on Jan 12, 2016 18:24:11 GMT
I don't see anyone forcing you to lend with ratesetter.
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oik
Member of DD Central
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Post by oik on Jan 12, 2016 18:44:39 GMT
I don't see anyone forcing you to lend with ratesetter. They aren't. Was there any particular reason why you think that to be relevant? I invest in lots of businesses and companies without having to believe they're faultless or being inhibited in being critical when deserved. Why should the fans of Ratesetter think them beyond criticism.
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Post by westonkevRS on Jan 12, 2016 20:29:14 GMT
Typically 30 days with exceptions on the upside and downside.
Unless something has changed in recent months, the maximum number of days for a rolling contract is set at 35 days. This is because a 30 day payment could result in a end date on a bank holiday (e.g. Thursday of Easter weekend) so a 30 day contract in this case would be extended to the following Tuesday as that is when the borrower payment will happen. RateSetter also do not want to end up with very short rolls (between the lender end date and the next borrower payment date). This is quite rare.
In 2014 there was a period when some exceptional contracts went to 45 days. This was very rare and now should not occur. I'd be interested if any lenders have contracts longer than 35 days?
Some contracts will be smaller than the typically 30 day month depending on if a loan it is being matched to is due to finish shortly, or the payment date is within 30 days and your monthly segment is the top slice.
Kevin.
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locutus
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Post by locutus on Jan 12, 2016 22:11:46 GMT
Typically 30 days with exceptions on the upside and downside. Unless something has changed in recent months, the maximum number of days for a rolling contract is set at 35 days. This is because a 30 day payment could result in a end date on a bank holiday (e.g. Thursday of Easter weekend) so a 30 day contract in this case would be extended to the following Tuesday as that is when the borrower payment will happen. RateSetter also do not want to end up with very short rolls (between the lender end date and the next borrower payment date). This is quite rare. In 2014 there was a period when some exceptional contracts went to 45 days. This was very rare and now should not occur. I'd be interested if any lenders have contracts longer than 35 days? Some contracts will be smaller than the typically 30 day month depending on if a loan it is being matched to is due to finish shortly, or the payment date is within 30 days and your monthly segment is the top slice. Kevin. In exceptional circumstances, money lent on the monthly market might not be paid back for up to 5 years. That is correct isn't it?
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Post by westonkevRS on Jan 12, 2016 22:36:12 GMT
In exceptional circumstances, money lent on the monthly market might not be paid back for up to 5 years. That is correct isn't it? Yes, the terms and conditions allow RateSetter to lock in money in terms of exceptional circumstances due to liquidity. That is a risk lenders must consider. Although this hasn't occurred in over 5 years since launch, monthly money isn't typically used for such lending, and it is well recognised the impact this would have on lender trust. It would probably be terminal. So we have a number of avenues available to avoid such an action, and even if it was I suspect the lock on monthly money would be minimal. But yes, the terms allow. Kevin.
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iren
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Post by iren on Jan 13, 2016 14:59:10 GMT
Could be five weeks or more, or could be just 7 days before the money you thought you'd just agreed to lend for a month will need to be placed elsewhere. You won't know what a "Ratesetter month" is and for how long you've loaned your money until after you've loaned the money. For example, the loan for the few thousand I lent today, 12 Jan, I see is due to mature in just 7 day time on 19 Jan, while another loan made shortly before won't mature for over 5 weeks......... 7 days? I've had a match with just a one day maturity previously.
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pikestaff
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Post by pikestaff on Jan 14, 2016 8:22:26 GMT
In exceptional circumstances, money lent on the monthly market might not be paid back for up to 5 years. That is correct isn't it? Yes, the terms and conditions allow RateSetter to lock in money in terms of exceptional circumstances due to liquidity. That is a risk lenders must consider. Although this hasn't occurred in over 5 years since launch, monthly money isn't typically used for such lending, and it is well recognised the impact this would have on lender trust. It would probably be terminal. So we have a number of avenues available to avoid such an action, and even if it was I suspect the lock on monthly money would be minimal. But yes, the terms allow. Kevin. I think locutus is probably referring to the consequences of a Resolution Event (if/when the provision fund looks like running out), following which all funds are pooled. There is of course the liquidity risk as well. I'm happy that you have the tools to minimise the risk of this happening and that the risks are properly reflected in the rate.
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