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Post by ratehopper on Nov 18, 2016 13:50:03 GMT
I received notification this morning that the rate has slipped to 4.6% for 5 year loans. It has been slipping down in jumps of two basis points over the last few weeks, and without any explanation. I feel out of control on this and I am rapidly losing confidence in Lending Works to give lenders a decent rate and match to borrowers quickly. Time, I think, to get my money out as it matures and put it somewhere where it will work harder.
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nd
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Poor rate
Nov 18, 2016 16:17:05 GMT
via mobile
Post by nd on Nov 18, 2016 16:17:05 GMT
I've reached the same conclusion. Been investing in the 3 year loans but now not worth it at these current, consistently falling, rates.
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nd
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Post by nd on Nov 18, 2016 20:51:31 GMT
Do the rate changes apply to existing investments or new investments only? New loans only. Existing loans remain at the rate as at the time the loan started, new money and reinvestment is at the latest rate.
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Poor rate
Nov 18, 2016 21:57:41 GMT
via mobile
Post by Matthew on Nov 18, 2016 21:57:41 GMT
Thanks for the feedback - perhaps an explanation of why our rates are moving could be included in the weekly updates going forward.
Unfortunately (or fortunately depending on which side of the fence you're on), personal loan rates on prime loans are the lowest they have been, meaning we've had to reduce our rates to remain competitive. You'll see this across the market by looking at any of the main price comparison websites or indeed competitors in our space.
Keeping rates higher but waiting weeks to match new funds is not ideal either, so something has to give. I guess it comes down to each individual's risk appetite as to whether they look elsewhere for higher yields.
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Post by carol167 on Nov 21, 2016 14:18:59 GMT
I understand the current trend for rates across many platforms is heading downwards.
But for me - I'm not happy loaning out at 4.6 for 5 years.
I've currently suspended all reinvesting on LendingWorks and will play the wait and see game, maybe move funds around a bit.
There are better deals out there - though not for lending to people currently and I have plenty invested in other asset classes elsewhere to pick up the slack.
5 years at 4.6 ? I don't think so. I've done the same with RS too for the same reason.
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nairda
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Post by nairda on Nov 22, 2016 11:10:47 GMT
I have also ceased lending for now. I set my 5 year lower limit to 5%, but let it go to 4.8% as I quite like Lending Works, but it's now gone beyond acceptable. The annoying thing is that despite stopping reinvestmnent on Friday I have still managed to pick up two loans at 4.6%.
I have been drawing down my three and five year RS investments for some time now and Mrs Nairda has started putting her repayments into the rolling market but with a rate of 3% until we can find a better home for her money. I have lost a lot of confidence in RS of late and I am not happy about the future prospects of the platform.
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Post by ratehopper on Nov 24, 2016 12:18:49 GMT
The problem with the likes of LW, Ratesetter and Zopa is that they make their money on the margin between lending and borrowing rates. It is in their interest to drive down lender rates. I don't buy this market competitive rates argument as a complete explanation for the recent sharp falls in LW rate. It is possible, if you are patient and ignore their current rate to lend at, to get around 5.8% on RS (not that they seem to publish this of course). RS takes the money at that rate when they have exhausted loan offers at a lower rate; it just reduces their margin. The advantage with RS is that you can set the rate to lend at; with LW you have no control and have to take it or leave it on the rate they set. If enough of us leave it, then let's see where the rate goes......
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pom
Member of DD Central
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Post by pom on Nov 24, 2016 12:32:11 GMT
The problem with the likes of LW, Ratesetter and Zopa is that they make their money on the margin between lending and borrowing rates. It is in their interest to drive down lender rates. I don't buy this market competitive rates argument as a complete explanation for the recent sharp falls in LW rate. It is possible, if you are patient and ignore their current rate to lend at, to get around 5.8% on RS (not that they seem to publish this of course). RS takes the money at that rate when they have exhausted loan offers at a lower rate; it just reduces their margin. The advantage with RS is that you can set the rate to lend at; with LW you have no control and have to take it or leave it on the rate they set. If enough of us leave it, then let's see where the rate goes...... I'd be surprised if you get 5.8% again at RS in a hurry, it's been weeks since anythings been lent out that high. (not that I'm particularly happy about the LW rate either)
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Post by Matthew on Nov 24, 2016 13:18:23 GMT
The problem with the likes of LW, Ratesetter and Zopa is that they make their money on the margin between lending and borrowing rates. It is in their interest to drive down lender rates. I don't buy this market competitive rates argument as a complete explanation for the recent sharp falls in LW rate. It is possible, if you are patient and ignore their current rate to lend at, to get around 5.8% on RS (not that they seem to publish this of course). RS takes the money at that rate when they have exhausted loan offers at a lower rate; it just reduces their margin. The advantage with RS is that you can set the rate to lend at; with LW you have no control and have to take it or leave it on the rate they set. If enough of us leave it, then let's see where the rate goes...... It's frustrating to see lender rates lower than where they have been historically, but I can assure you it's not an attempt to squeeze out more margin for LW as our borrower and lender rates have moved together i.e. borrowers are paying less, lenders are receiving less and LW is actually receiving less. It will be interesting to see how long rates stay at these levels, but ultimately it's a factor of supply and demand. Other sites also make their money on the spread, but obviously the platforms mentioned above have tighter margins (prime and near-prime consumer lending) so lender rates are more sensitive to changes in loan pricing.
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