mikeh
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Post by mikeh on Apr 13, 2016 20:36:09 GMT
I'm still struggling with the idea of how a loan being repaid first can rank after a loan being repaid later in the event of a default. If the default occurs before B is repaid fair enough but what happens if it occurs afterwards? I think I must be missing the point here somehow.
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freddy
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Post by freddy on Apr 14, 2016 0:22:06 GMT
It's early morning here in LOS (maybe not fully awake) but I'm also struggling to understand this. If the 80k loan is due to be settled in 6 weeks then how does it come 2nd in case of default. Are we to assume that if the restaurant sale doesn't go through, then the loan would ne extended to 6 months and secured against the hotel on a 2nd charge basis??
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Post by MoneyThing on Apr 14, 2016 6:28:06 GMT
Morning,
In practice, if in the event that that Tranche B defaults (i.e. the restaurant sale falls through), then this loan would go into default and participating lenders would accrue interest at the default rate (18% pa), until such time as the Hotel sale completes which will repay both tranches.
If Tranche A then defaults (lenders accrue interest at 18%), then we would go into recovery and look to dispose of the property. In this scenario, lenders participating in A will be paid first before those participating in B.
However, I can say that the sale of both Restaurant & Hotel are in advanced stages whereby the purchasers have already committed significant sums towards completing the deals.
Kind regards,
Ed
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mikeh
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Post by mikeh on Apr 14, 2016 7:51:21 GMT
Thanks Ed. That makes it a lot clearer.
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registerme
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Post by registerme on Apr 14, 2016 7:51:24 GMT
A minor piece of feedback Ed ( MoneyThing), I just looked at the 6 week term of that tranche and thought "can't be bothered". Though I am sure you'll have other takers for it .
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Post by MoneyThing on Apr 14, 2016 8:07:44 GMT
A minor piece of feedback Ed ( MoneyThing ), I just looked at the 6 week term of that tranche and thought "can't be bothered". Though I am sure you'll have other takers for it . Fair enough - I did wonder that would be the feeling of some but was quite prepared to hold it ourselves in the event that this was the case. Regards, Ed.
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Post by ydobon on Apr 14, 2016 8:29:27 GMT
I tend to treat short duration loans in a similar manner to regular savings accounts with higher interest rates where you can only pay in low monthly amounts - the headline rates make up for the compromises of short duration/low amounts.
I might think differently if I had a huge P2P portfolio, but with a young family and a house to renovate, short duration loans can actually be quite helpful with cashflow.
Just as long as the overall flow of deals coming to the platform is good, I can cope with a few mini loans...
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SteveT
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Post by SteveT on Apr 14, 2016 15:07:10 GMT
Judging by the speed these 3 are filling at, I think the bid limits were a good bet!
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Post by MoneyThing on Apr 14, 2016 15:08:01 GMT
Judging by the speed these 3 are filling at, I think the bid limits were a good bet! Definitely!
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am
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Post by am on Apr 14, 2016 15:59:18 GMT
Judging by the speed these 3 are filling at, I think the bid limits were a good bet! Definitely! I'm not really qualified to teach you to suck eggs, but I do believe that you drew the wrong conclusions from the slow filling of the Bolton and latest AE loans. I think these were slow because of loan specific factors, exacerbated by the effects of ISA season, rather than because of a general saturation of the market.
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Post by flobberchops on Apr 15, 2016 18:38:25 GMT
Just wanted to add that as a small-time investor I was grateful for the 1% bid limit plus prior notice email on the three most recent loans. I think it's a great way to help the little guys like me get a slice of the pie, and encourages diversification and participation. In fact I'd be very happy if all loans had a 24-hour 1% limit from now on...
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jonah
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Post by jonah on Apr 15, 2016 19:36:42 GMT
Just wanted to add that as a small-time investor I was grateful for the 1% bid limit plus prior notice email on the three most recent loans. I think it's a great way to help the little guys like me get a slice of the pie, and encourages diversification and participation. In fact I'd be very happy if all loans had a 24-hour 1% limit from now on... Careful.... Some had to have 0.5% limits recently due to their popularity.
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