hazellend
Member of DD Central
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Post by hazellend on Nov 18, 2016 17:32:54 GMT
What do people think about the new pledge system?
I don't see the point in pledging on a loan that won't draw down for months. I'd rather wait till a day before the loan closes.
I like instant returns, and am happy with my money sitting in a loan that is not drawn down but paying interest.
Not sure if the pledge system will work for the current loan, but we'll see.
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SteveT
Member of DD Central
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Pledge
Nov 18, 2016 17:41:21 GMT
via mobile
Post by SteveT on Nov 18, 2016 17:41:21 GMT
I don't believe it's exactly new, just newly extended for use beyond the underwriters it was being used with previously.
I assume imminent loans are still going to be filled with firm bids as they have been to date. But I've no problem being offered capacity in potential future loans via pledges, especially those at the higher end of the risk / reward spectrum like this one (where I'm sitting on my hands for the time being until we learn a bit more)
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stevio
Member of DD Central
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Pledge
Nov 19, 2016 7:47:54 GMT
Post by stevio on Nov 19, 2016 7:47:54 GMT
Gauging potential is fine, SS do this with pre-funding.
However the difference is the time to live, this first loan is approx 2 month period before live with no way of amending your pledge during that time vs SS maybe a week before to set your pre-funding and ability to change right up to the live day of the loan
This does give more time to evaluate, however it does involve a lot more long term planning and will most likely end up with no one wanting to commit till the last minute or the last few tens of thousands left in the loan
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james
Posts: 2,205
Likes: 955
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Pledge
Nov 19, 2016 9:58:51 GMT
Post by james on Nov 19, 2016 9:58:51 GMT
I think that a "pledge" approach is useful but would prefer the wording to be more like "expected lending amount". This is because pledge carries more of a "word is your bond" implication and I think that the idea is not bond but rather anticipation, so no moral failure involved if you change amounts after the initial indication.
Besides giving Ablrate an indication of possible interest it's an approach that avoids the issues relating to having to pre-fund to secure a place in the loan and also the issues we've seen where binding commitments are taken that have to be fulfilled with money within a couple of days at most. That avoids both tying up lender money and having to deal with failure to pay and assorted gaming around that.
The opportunity for extended discussion is also useful. While we're used to loans on Ablrate filling more slowly than at some other places, that isn't always the case and the extra discussion and evaluation time is helpful.
Pledge and instant returns should work reasonably well together. Ablrate's been doing more instant returns than I expect they like because of the time for loans to fill, so an advance notice system can help to give better indication where it's necessary to compensate lenders for an expected delay between paying in their money and when the borrower starts to pay interest. Instant returns don't necessarily have to be at the loan interest rate but since we all have choices of platform they probably do need to be closer to P2P rates than bank rates since the opportunity cost of paying in the money is vs P2P not banks, in general.
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Pledge
Nov 19, 2016 12:05:59 GMT
Post by GSV3MIaC on Nov 19, 2016 12:05:59 GMT
/mod hat off
I see 'pledge' more as a way of gauging whether there is enough interest (with money behind it) to embark on the expensive job of actually floating the loan for funding (although quite a bit of the expense may have been incurred getting to the 'pledge' stage .. less, I guess, if the VR is clearly somewhat 'recycled'). For large loans, or loans with 'history', I can see this makes sense, and may result in adjustments to rates, cashback, underwriting, or the asking (and hopefully answering) of lots of awkward questions.
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Pledge
Nov 19, 2016 12:52:39 GMT
via mobile
Post by ablrate on Nov 19, 2016 12:52:39 GMT
Hi all
Pledging was intended only for a small group. I.e what we term 'underwriters'. The idea was that certain people could evaluate loans and pledge, so we didn't get too sophisticated on the tech as we would be dealing directly with those people.
We are looking at it differently now and opening up to all (with the ability to turn it off and put you on the naughty step if you misbehave)... so we have a little catching up to do on the tech.. reporting ... explanations etc... but that will be coming soon.
Ablrate
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guff
Posts: 730
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Pledge
Nov 19, 2016 13:53:48 GMT
Post by guff on Nov 19, 2016 13:53:48 GMT
Have you considered the possibility of financial incentives for those who pledge ablrate ?
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boundah
Member of DD Central
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Pledge
Nov 22, 2016 15:54:02 GMT
Post by boundah on Nov 22, 2016 15:54:02 GMT
Hi all Pledging was intended only for a small group. I.e what we term 'underwriters'. The idea was that certain people could evaluate loans and pledge, so we didn't get too sophisticated on the tech as we would be dealing directly with those people. We are looking at it differently now and opening up to all (with the ability to turn it off and put you on the naughty step if you misbehave)... so we have a little catching up to do on the tech.. reporting ... explanations etc... but that will be coming soon. Ablrate I think I like the pledging system (time will tell) and have just pledged a small amount. Is there somewhere I can check the pledges I've made, in case I lose track in my befuddled state?
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Post by ablrate on Nov 22, 2016 16:21:08 GMT
Hi Just so you all know. This will be coming and will be available on any future pledges... we are also working on other things to make it more intuity (and 'Intended Lending Amount' is a better phrase, thanks) Regards Ablrate
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