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Post by Deleted on Nov 10, 2016 11:15:00 GMT
I have been using SavingStream for a few weeks where the general consensus seems to be risk is reduced by holding loan parts with longer to run until completion. Especially as interest is paid up front by the borrower. Therefore like many I pick up longer term to run loans I like the look of and clear out anything with less than 100days left.
Do people apply the same thought process with Moneything or is the tendancy to hold loans until term?
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archie
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Post by archie on Nov 10, 2016 11:31:43 GMT
On SS I always sell around 100 days.
On MT I usually keep all the loans until maturity.
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SteveT
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Post by SteveT on Nov 10, 2016 11:57:14 GMT
The big difference with MT vs SS is that, to date, MT has not let any loan over-run. Instead, if a loan has needed to be extended, a new renewal loan has been launched to replace the original, with lenders offered the option to stick or twist (be repaid or roll over). However there can be no guarantee this will always be the case forever.
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spiral
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Post by spiral on Nov 10, 2016 12:00:13 GMT
One of the arguments on SS regarding -ve day loans is that this is when they are most vulnerable to a failed payment as SS withhold all the interest up front (although this now seems to be open to debate following a 12 month extension on a loan that is being apparently being serviced quarterly) so barring some extreme circumstance, they are unlikely to default during their term.
That is not the case on MT as I believe that all (barring one iirc) service their interest monthly. This means that a default is as likely after 1 month as it is after 12 whereas on SS the same situation may not materialise until month 12 despite occurring at month 1.
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elliotn
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Post by elliotn on Nov 10, 2016 12:03:51 GMT
Nirish,
SS trading normally above 200+ day loans that passed C_Ds old DD muster.
MT just started, expecting small, diversified amounts that I'd be comfortable holding but will look at SM when I've built up and learnt the ropes more.
FS just started c20% bottom-feeding.
Regards.
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Post by Deleted on Nov 10, 2016 20:28:06 GMT
Some great info, ideas and tips. Cheers All !!
I guess as long as MT rollover loans at completion (which seems a much clearer approach) then allowing loans I'm happy with to run to the end is more palatable than on SS where the minus number gets bigger and bigger and no one will touch it on the SM !!
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duck
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Post by duck on Nov 11, 2016 5:09:36 GMT
I'm another happy to let loans run to term with MT and where I am exposed a little too much or want to diversify I simply sell off the excess and roll over the remainder. Currently the MT aftermarket is very liquid so it is very strange for any loan part to hang around for more than a couple of minutes.
(- day loans do sell on SS, I've had a clear out in the last few days getting rid of some that I have felt happy to hold onto for a period of time and none have hung around for more than half a day)
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Post by GSV3MIaC on Nov 11, 2016 16:15:13 GMT
/mod hat off
As mentioned numerous times over at SS, the SM (here as well as there) is a bit binary (there being no way to encourage or discourage sales by fiddling with the prices), so can can't really rely on a quick exit, but 'so far so good' (just keep the new members rolling in). The roll-over at the end of the loan is much better than the SS 'extend and pray' approach (or the FC 'extend and tell them to lump it'), but it does rely on new lenders stepping in. Would be interesting to see what happens if a roll-over doesn't sell out in 24 hours .. I guess MT-things wind up holding the excess, which is Ok for a while/few but not feasible long term.
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archie
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Post by archie on Nov 11, 2016 16:26:23 GMT
I'd argue it's because MT loans end on time that most people hold on to them.  |
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Post by Deleted on Nov 11, 2016 16:29:37 GMT
two issues, defaults on interest and capital and then timing control
SS may well retain the interest but capital is still at risk, more to the point the borrower does not have use of the interest element so it puts his work more at risk. SS time control is poor, both in terms of keeping records up to date and in terms of keeping us informed. So while retaining the interest looks like a good deal, the fact they do so and that they cannot keep us informed puts the capital more at risk.
MT control the time element to the day, which is more like the practise I'm used to. The borrower gets to keep the money until it is required back, but the process of monthly payments means the companies are in contact monthly. It feels more like a "tell you what I'm going to do and I do what I tell you." sort of company. So I believe the capital and the interest are at less risk.
I have roughly 2x in MT compared to what I have in SS for just these reasons.
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