alender
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Post by alender on Mar 4, 2016 13:06:59 GMT
I've never sold out any loans, in fact the first time I even looked at the function was in reaction to this thread. If what I was told is correct (as opposed to what alender was told), in order to make the figures add up on the screenshots they'd either have to : Reduce capital, reduce interest, include a fee. I suspect its the middle option which totally hides the fact that your rate is being reduced (unless its negative of course). I suppose if the only change made to this process is the removal of RS's fee, the rate compensation will be shown in the same way that it has always been shown on all markets for selling out loans of a lower rate. Unfortunately I've never done this so can only guess at how its presented. Sprial there is one other explanation for us getting different information in the way sell out works that RS have changed it, perhaps to ensure it is always possible to sell out and therefore can be sold as instant access. Assuming what RS told you is correct so you can always sell out there is the case as I have said above where the rate has gone up and the interest earned on the loan so far is not enough to cover the interest at the new rate for the remainder of the loan, either RS would have to fund this, the capital reduced or sell out cannot take place at present.The calculate button helps in that you can see what you will/might get and if you have the knowledge this can be check against the expected amount for the period, APR calculations for anything but a year are complex but excel can help with this. However it will not tell us if we sell out if there is a delay to find a match i.e. if we have to wait for the rate to drop to our loan rate. This sell out option needs to be explained in details it is more complicated than it first looks.
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Investboy
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Post by Investboy on Mar 4, 2016 16:42:53 GMT
OK, I've had confirmation back from RS that if you sell a loan of a lower rate than current going rate you will have to compensate for the difference in rates. Whaaaat?? Where does it say that? T&C? On sell a loan page? I was doing a little experiment with 1mth market when the rate was 4%+, I sold few hundred and indeed someone bought it (rates were 3.6-3.7%) within 1h and I still made it to place it at 4% No idea how this system works... Why/how could someone buy it at lower rate? Was I charged something that was not shown? Was the fee/charge just hidden and deducted from my interest ?
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am
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Post by am on Mar 11, 2016 21:29:14 GMT
OK, I've had confirmation back from RS that if you sell a loan of a lower rate than current going rate you will have to compensate for the difference in rates. Whaaaat?? Where does it say that? T&C? On sell a loan page? I was doing a little experiment with 1mth market when the rate was 4%+, I sold few hundred and indeed someone bought it (rates were 3.6-3.7%) within 1h and I still made it to place it at 4% No idea how this system works... Why/how could someone buy it at lower rate? Was I charged something that was not shown? Was the fee/charge just hidden and deducted from my interest ? Next time I see the market spiking (if I remember) I'll see what it offers me for my monthly portfolio.
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james
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Post by james on Mar 12, 2016 0:05:11 GMT
OK, I've had confirmation back from RS that if you sell a loan of a lower rate than current going rate you will have to compensate for the difference in rates. Whaaaat?? Where does it say that? T&C? On sell a loan page? It's been described often enough. You pay if the rate has gone up but you don't get to keep the profit if rates have gone down, that goes to the protection fund. As with Zopa it's a heads you lose, tails we win system, though RateSetter is worse beause they also adjust for a shorter term based on how long you held the loan. I was doing a little experiment with 1mth market when the rate was 4%+, I sold few hundred and indeed someone bought it (rates were 3.6-3.7%) within 1h and I still made it to place it at 4% ... No idea how this system works... Why/how could someone buy it at lower rate? Was I charged something that was not shown? Was the fee/charge just hidden and deducted from my interest ? It was deducted from your capital. A lower rate interest rate means that the buyer paid more for the loan than the capital value you were selling. That extra capital payment was taken from you and paid to the protection fund. On the other end of things, if rates had gone up, you would have got back less capital so that the buyer would have had the new rate. Been extensively discussed in the Sell Out topic here in late 2015. Worth a read if you want to understand what happens.
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am
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Post by am on Mar 21, 2016 20:08:01 GMT
My monthly portfolio was at an average rate of 3.8% and the lend now rate was at 4.2%, but they still offered me a "sell out" free of charges, so I tried withdrawing a small amount to see how it worked, as this was the situation where we feared that fee free sellout didn't work.
1) There was small print saying that because RS is a dynamic market the quoted assignment fee is not guaranteed. 2) I thought I saw an ability to cancel, but when I clicked on that link it refused to do that. (After reading the small print I was rather less sanguine about going ahead.) 3) It took hours to act on the instruction, by which time the higher rates had disappeared.
So it looks as if they queue up monthly sell-out instructions until there are lender offers at the same (or lower) rate. In theory that criterion may be long delayed, so it remains unclear what happens if you are trying to sell out at a seriously low rate.
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spiral
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Post by spiral on Mar 22, 2016 7:54:17 GMT
am ,what you are saying seems to comply with what alender was saying earlier in this thread but contradicts what CS told me. In your comment you mention the prompt "assignment fee". What is this if there are no fees unless it is the compensation for the lower rates that I was informed of but then doesn't seem to explain the time you had to wait for a match. I'm still confused
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alender
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Post by alender on Mar 22, 2016 10:14:48 GMT
Confused, so am I.
I asked RS again and got a different answer, they now say that the amount you get back will be reduced if there are no lender offers at your rate and need to fund the loan from a higher rate. Not sure which one is true, also not sure if this means capital could be reduced if your loan has not accrued enough interest to cover the new rate for the rest of the term.
If it is advertised as instant access then you should not have to wait for a matching lender as this may never happen if you have accepted a low rate and the rates have moved up.
One thing I have found out is that if you sell out the next day there is no interest paid, confirmed by RS but they could not tell me what is meant by a day. I do not think it is 24 hours from start of the loan but some other time, perhaps midnight or when the batch is run, again RS could not tell me this. If I get a sell out quote couple of weeks after the start of the loan the interest looks about right so I am not sure when this day is added back. When I say about right this is checked against Excel Accrint function using a basis of actual.
Would be interesting to know how RS implement a function like this, if it is properly specified in a document then the RS staff on the phone have not been given this document or perhaps it is done on a more ad hoc basis and no one knows except the developers. I have worked on systems when we have had to take apart the code to discover how certain functions fully work. In defence of RS Santander cannot tell me the cut off time for interest, they can only tell me it is calculated daily which I already knew.
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am
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Post by am on Mar 22, 2016 11:02:10 GMT
am ,what you are saying seems to comply with what alender was saying earlier in this thread but contradicts what CS told me. In your comment you mention the prompt "assignment fee". What is this if there are no fees unless it is the compensation for the lower rates that I was informed of but then doesn't seem to explain the time you had to wait for a match. I'm still confused The assignment fee is the compensation paid to the new lender if the rate on your loan is less than the current rates. (What the current rate is on RS is rather ambiguous.) What we don't know is whether assignment fees are still potentially charged on "sell out" from the monthly market, or whether it is "quoted" because they're using the same code to display the "sell out" quote for all markets. The next experiment would be to put £10 at a ridiculously low rate (e.g. 1%) and then try to sell it out. Perhaps westonkevRS might like to try. (But better that RS provide clear documentation of how the sell out process works.) It may be that the money gets trapped in "sell out" either until maturity or indefinitely, or it may be that the lender takes a loss (pays an assignment fee), or it may be that RS takes the loss. What we now know is that monthly "sell out" is not (near-)instantaneous, and it's not practicable to sell out your monthly holdings and reinvest them at a higher rate when rates spike.
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dali
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Post by dali on Mar 22, 2016 11:11:16 GMT
I sold out a substantial amount of my money in the monthly market a few days ago, and the money appeared in my holding accound in less than an hour.
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oldgrumpy
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Post by oldgrumpy on Mar 22, 2016 11:15:11 GMT
I sold out about £800 (3.7%) yesterday when lender offers were up at 4.2% or higher.... the proceeds to go into my holding account. No charges of any kind were imposed. It took about four hours to do, then I received a mailing confirming the transaction. All the principal was realised. The accrued interest was not, but is still listed to be paid on the date the original loan was to mature.
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alender
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Post by alender on Mar 22, 2016 11:15:32 GMT
The assignment fee is the compensation paid to the new lender if the rate on your loan is less than the current rates. (What the current rate is on RS is rather ambiguous.) What we don't know is whether assignment fees are still potentially charged on "sell out" from the monthly market, or whether it is "quoted" because they're using the same code to display the "sell out" quote for all markets. But better that RS provide clear documentation of how the sell out process works.I assume the assignment fee is in fact a fee not a reduction in interest so you will need to pay this fee from interest after tax is deducted. Agreed there are no clear rules RS should explain in detail how this all works.
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alender
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Post by alender on Mar 22, 2016 11:18:18 GMT
I sold out about £800 (3.7%) yesterday when lender offers were up at 4.2% or higher.... the proceeds to go into my holding account. No charges of any kind were imposed. It took about four hours to do, then I received a mailing confirming the transaction. All the principal was realised. The accrued interest was not, but is still listed to be paid on the date the original loan was to mature. I sold out a loan when the rates on the maket were lower than my loan the capital and all interest were paid together a few hours after the sell off.
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locutus
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Post by locutus on Mar 22, 2016 11:25:15 GMT
Agreed there are no clear rules RS should explain in detail how this all works. I asked sometime ago and got the following response from customer services if that is of any help. Obviously, some of this is simplified for the monthly market now but we all know things are never quite what they seem with RS.
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alender
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Post by alender on Mar 22, 2016 11:41:03 GMT
I asked sometime ago and got the following response from customer services if that is of any help. Obviously, some of this is simplified for the monthly market now but we all know things are never quite what they seem with RS. Thanks for the info. Interesting statement, I am not sure how this sits with the “FCA treating customers fairly” rule given the RS advertisements on sell out.
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locutus
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Post by locutus on Mar 22, 2016 12:03:18 GMT
Agreed. Customer services were quite arrogant and defensive when I asked for details about the formula used to calculate a sell out. They seem to think their systems are infallible (already shown to be false) and that I, as a customer, should have no interest in verifying the fees I am being asked to pay. Instead, I should just trust them and that the calculation is accurate because the system says so.
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