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Post by westonkev on Dec 29, 2016 21:34:53 GMT
The average term for open loans is 19 months. So assuming an equal capital repayment element then 5.3% of money is returned each month. If RateSetter didn't write any new loans (e.g. in a run down mode), than this could be repaid monthly with no new lenders required.
Making the assumption that the average term remaining for loans filled with monthly money ismuch much shorter, then around 10% plus rolling money is returned monthly.
Clearly not a ponzi scheme, and plenty of spare room to repay lenders removing their money even if there are no replacement lenders.
Kevin.
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Post by newlender on Dec 30, 2016 5:06:56 GMT
There's half a million on offer at 3.8%. Where is this money coming from? - surely not automatic reinvestments at the end of the month. The next half million is around 5.5%, which is much more sensible, but I'm not optimistic. Zopa+ is closed for new money at the moment too so I suppose my RS holding account will be growing well into the New Year.
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Post by p2plender on Dec 30, 2016 7:56:00 GMT
Have you seen the state of the personal loan market at present??? Can't belong before people are being paid to borrow money in the UK.
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Post by davee39 on Dec 30, 2016 9:03:57 GMT
People are being paid already.
Look at interest free purchase credit cards which have introductory offers. Virgin gave me six bottles of wine and £3k free for 18 months and I have had similar deals from others.
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Post by p2plender on Dec 30, 2016 9:06:59 GMT
True!
Anybody have any tips on how one can get these crazy loan rates?
I never have success.
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alender
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Post by alender on Dec 30, 2016 10:09:33 GMT
The average term for open loans is 19 months. So assuming an equal capital repayment element then 5.3% of money is returned each month. If RateSetter didn't write any new loans (e.g. in a run down mode), than this could be repaid monthly with no new lenders required. Making the assumption that the average term remaining for loans filled with monthly money ismuch much shorter, then around 10% plus rolling money is returned monthly. Clearly not a ponzi scheme, and plenty of spare room to repay lenders removing their money even if there are no replacement lenders. Kevin. If there is a serious loss of confidence in P2P (not necessarily RS) this would no doubt reduce the new funds to close to zero and a lot of people would try to sell out. This would cause a lock in and probably the end of RS (who would put money into the rolling market to be locked in?). As far I known the people in the rolling market would be given money back when the underlying loans for their particular investment interest and/or capital are repaid. As RS can use the rolling market for up to 5 years I would assume that rolling investors could have some of there funds locked for up to 5 years. There would also be ongoing costs and bad loans which would be split amongst the investors on each payout. As RS do not make any guarantees on how much short term money is used for longer term loans this could be anything from 0% to 100% and there are no rules stopping RS from making this close to 100%. A few days ago there was about 2m of volume on the day and over 13m loans financed from just the rolling market, this gives me the impression there is a lot of rolling money used for longer term loans. I believe investors have a right to know the term of the underlying loans where their money is being used as this needs to be taken into account when assessing the investment risk. RS should at least publish figures on the amount of the Rolling market used for longer term loans and the average length of the loan. Once the money is RS’s hands there is very little information on its use, we should know how it is used after all it is still our money, something RS seem to forget.
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agent69
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Post by agent69 on Dec 30, 2016 10:47:24 GMT
The average term for open loans is 19 months. So assuming an equal capital repayment element then 5.3% of money is returned each month. If RateSetter didn't write any new loans (e.g. in a run down mode), than this could be repaid monthly with no new lenders required. Making the assumption that the average term remaining for loans filled with monthly money ismuch much shorter, then around 10% plus rolling money is returned monthly. Clearly not a ponzi scheme, and plenty of spare room to repay lenders removing their money even if there are no replacement lenders. Kevin. As far I known the people in the rolling market would be given money back when the underlying loans for their particular investment interest and/or capital are repaid. If things go t*ts up (a resolution event) then I believe all outstanding loan obligations are pooled and repayments treated equally (so one month and 5 year loans will get repaid over the same time period).
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wapping35
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Post by wapping35 on Dec 30, 2016 11:06:20 GMT
The problem with the Rolling market (for RS and the regulator) is it is a very clear illustration of RS acting like a Bank not P2P.
A bank takes deposits from savers (mostly for immediate or short term periods) and then it lends those out for the long term. The Bank (and indeed ultimately the regulator / Central Bank) then takes on the risk of a liquidity problem (bank run).
The Rolling market is doing the above but the risk is taken on by lenders and much of the rewards to RS.
One of the questions the regulator is looking at is do most lenders really understand the risks they are taking on by lending ? i.e. for the Rolling market being caught into lending for up to 5 years, but at monthly access rates.
I would entirely agree that the Rolling market currently has a lot of liquidity so at the moment there is no problem, but that liquidity can disappear very quickly (literally with a few clicks of the mouse).
I would not call Rolling a Ponzi scheme, it is more RS acting like a Bank, but one not subject to Bank type regulation.
Anyway just my opinion.
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jonah
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Post by jonah on Dec 30, 2016 19:44:12 GMT
True! Anybody have any tips on how one can get these crazy loan rates? I never have success. Stoozing is the term to Google for one option for zero cost loans. www.stoozing.com/stoozforum/In short.... a 0% purchase card and invest the money not spent. Or 0% balance transfer card and invest the money borrowed, via a mule card or a current account. Make sure you always pay the monthly minimum. Also make sure that you have thought it all through and read that the issues and hiccups. It can be done for 10's of thousands over time, with no interest costs. Of course that money does need to be repaid so watch where it gets invested!
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Post by buggerthebanks on Dec 31, 2016 0:17:39 GMT
A bank takes deposits from savers (mostly for immediate or short term periods) and then it lends those out for the long term. The Bank (and indeed ultimately the regulator / Central Bank) then takes on the risk of a liquidity problem (bank run). If I may: banks do not lend out depositors savings (a la Fractional Reserve Banking). Like you, I was of the opinion they did. However, a friend of mine has recently had a very interesting exchange of correspondence with the BoE who have confirmed that, whilst banks are required (by the BoE / PRA) to hold reserves, there is NO (direct) LINK between how much they must hold & how much they create / lend. In short: UK banks can create as much money as they choose & lend it out, without necessarily having to increase their reserves. This (to me) seems way worse than FRB (which remains employed in most of the rest of the world).
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upland
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Post by upland on Dec 31, 2016 9:01:12 GMT
5 year money is 3.7% now , its like a limbo dance. I think that they should be ashamed of themselves. I bet lots of their investors have no idea that they are getting so little for tying it up for so long.
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oldgrumpy
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Post by oldgrumpy on Dec 31, 2016 9:25:39 GMT
Makes our legacy Wellesley deals at 6.5/7/7.5% look pretty useful now! Due to mature 2017-2019.
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Post by charliebrown on Dec 31, 2016 9:28:16 GMT
5 year money is 3.7% now , its like a limbo dance. I think that they should be ashamed of themselves. I bet lots of their investors have no idea that they are getting so little for tying it up for so long. I have a soft spot for RS as it was my first foray on p2p platforms. The RS website is probably the best in the business (some of the other p2p websites are just awful; try rendering FS on an iPad and you'll get what I mean). However, I've long since withdrawn all of my RS investments and don't intend to go back unless things change. Whilst platforms like MT and FS have comparatively lousy websites they have much better investment propositions, which matters more. The RS provision fund was always a nice comfort factor, but at rates of 3.x% it's not for me. I'm not 100% sure how the rates get set? Is it pure market forces? If it is then so be it. It's a borrowers' market so to speak as there always, on all p2p platforms, appears to be far more lenders than borrowers, and those lenders seem very hungry to invest in ANYTHING. I personally wouldn't invest a single penny at these rates though, But good luck to RS as I still like the platform, it's just not what I'm looking for these days.
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adrianc
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Post by adrianc on Dec 31, 2016 10:14:16 GMT
5 year money is 3.7% now , its like a limbo dance. I think that they should be ashamed of themselves. I bet lots of their investors have no idea that they are getting so little for tying it up for so long. That's not exactly RS's fault, if the investors CBA to see what they're getting.
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upland
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Post by upland on Dec 31, 2016 12:54:46 GMT
I cant help but feel that there must be a lot of 'fire and forget' investors that use their autobodge and probably dont know that they have had a bad deal for quite some time. I have a friend like that , it will come back on RS eventually.
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