|
|
Post by khampson on Dec 10, 2016 15:40:01 GMT
Hi, I am new to MT, how many new loans come to market each week? this will help me what I will need to put in to my account each week.
Also I am not sure what a tranche is exactly, I think it's parts of the same loan? Any way if I invest in a loan listed as tranche a and invest the same amount in tranche b, does this double my risk meaning I may as well just invest a larger amount in just one of the tranches?
Sorry I find it a little confusing.
Thank you
|
|
archie
Posts: 1,838 
Likes: 1,842
|
Post by archie on Dec 10, 2016 16:12:29 GMT
Number of loans varies. They are announced in advance so most people transfer funds in on the day an investment they want is due to go live.
Tranches can mean different things but they are part of the same loan.
For some loans the different tranches might have different loan lengths.
For others the interest rate may be higher on tranche 'B' than tranche 'A', this is because in the event of default 'A' would be covered first.
It's important to read the loan description to see how it works for any particular loan.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,870
Likes: 11,097
|
Post by ilmoro on Dec 10, 2016 16:14:09 GMT
Hi, I am new to MT, how many new loans come to market each week? this will help me what I will need to put in to my account each week. Also I am not sure what a tranche is exactly, I think it's parts of the same loan? Any way if I invest in a loan listed as tranche a and invest the same amount in tranche b, does this double my risk meaning I may as well just invest a larger amount in just one of the tranches? Sorry I find it a little confusing. Thank you Varies. There have been quite a few this week but probably not much going foward. On average maybe 1 a week or perhaps two but there will also be renewals which you have a chance to grab a slice off if people arent renewing but it is very much FFF. A tranche is part of a loan, either drawndown at a different time or with different risk Some loans are drawndown in stages as the borrower requires funds. So if you consider the MH loan currently filling. The total facility will be £7m but the borrower doesnt require all £7m at the start (and doesnt want to pay interest on it) so the initial loan was £1.3m. Once that money has been spent, the borrower will request a further sum (another tranche) and so on. tranches also mean that the LTV is controlled beneath a certain level. So the initial valuation of the project allows a sum to be borrowed within a reasonable LTV eg 60%, once that money is spent the vlaue of the security/project has increased so a further sum can be lent but still at the same LTV. In this context each tranche is secured against the same charge and ranks equally in the event of a default. Alternatively, tranches may be drawn for the same project but may have varying degree of risk/rate. So in the case of the Birkenhead loan, tranche A is less risky than tranche B because in the event of a default it takes priority for repayment. Sometimes the two tranches are launched simultaneously, on other occassions a further tranche may launch later, if the borrower wants extra funds over and above those originally advanced and this later tranche is secured against a low ranked charge (2nd or third) or subordinated behind original loan.
|
|
|
|
Post by khampson on Dec 10, 2016 16:36:02 GMT
Hi, I am new to MT, how many new loans come to market each week? this will help me what I will need to put in to my account each week. Also I am not sure what a tranche is exactly, I think it's parts of the same loan? Any way if I invest in a loan listed as tranche a and invest the same amount in tranche b, does this double my risk meaning I may as well just invest a larger amount in just one of the tranches? Sorry I find it a little confusing. Thank you Varies. There have been quite a few this week but probably not much going foward. On average maybe 1 a week or perhaps two but there will also be renewals which you have a chance to grab a slice off if people arent renewing but it is very much FFF. A tranche is part of a loan, either drawndown at a different time or with different risk Some loans are drawndown in stages as the borrower requires funds. So if you consider the MH loan currently filling. The total facility will be £7m but the borrower doesnt require all £7m at the start (and doesnt want to pay interest on it) so the initial loan was £1.3m. Once that money has been spent, the borrower will request a further sum (another tranche) and so on. tranches also mean that the LTV is controlled beneath a certain level. So the initial valuation of the project allows a sum to be borrowed within a reasonable LTV eg 60%, once that money is spent the vlaue of the security/project has increased so a further sum can be lent but still at the same LTV. In this context each tranche is secured against the same charge and ranks equally in the event of a default. Alternatively, tranches may be drawn for the same project but may have varying degree of risk/rate. So in the case of the Birkenhead loan, tranche A is less risky than tranche B because in the event of a default it takes priority for repayment. Sometimes the two tranches are launched simultaneously, on other occassions a further tranche may launch later, if the borrower wants extra funds over and above those originally advanced and this later tranche is secured against a low ranked charge (2nd or third) or subordinated behind original loan. Thank you for your replies, based on this when does the borrower and how do they actually pay off a loan, if I borrow I pay part of the loan back plus interest, how can a borrower get a loan for £7,000,000 and at the end of the term still owe £7,000,000 plus interest, or a customer who has several tranches do they start paying it back from the start or the end when they have the full loan amount? How do the loans work on MT? Please excuse my lack of knowledge. Keith
|
|
SteveT
Member of DD Central
Posts: 6,873
Likes: 7,918
|
Post by SteveT on Dec 10, 2016 16:42:22 GMT
Interest is paid monthly on all MT loans. Would be worth you reading the loan information pages on the MT website.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,870
Likes: 11,097
|
Post by ilmoro on Dec 10, 2016 17:08:09 GMT
Varies. There have been quite a few this week but probably not much going foward. On average maybe 1 a week or perhaps two but there will also be renewals which you have a chance to grab a slice off if people arent renewing but it is very much FFF. A tranche is part of a loan, either drawndown at a different time or with different risk Some loans are drawndown in stages as the borrower requires funds. So if you consider the MH loan currently filling. The total facility will be £7m but the borrower doesnt require all £7m at the start (and doesnt want to pay interest on it) so the initial loan was £1.3m. Once that money has been spent, the borrower will request a further sum (another tranche) and so on. tranches also mean that the LTV is controlled beneath a certain level. So the initial valuation of the project allows a sum to be borrowed within a reasonable LTV eg 60%, once that money is spent the vlaue of the security/project has increased so a further sum can be lent but still at the same LTV. In this context each tranche is secured against the same charge and ranks equally in the event of a default. Alternatively, tranches may be drawn for the same project but may have varying degree of risk/rate. So in the case of the Birkenhead loan, tranche A is less risky than tranche B because in the event of a default it takes priority for repayment. Sometimes the two tranches are launched simultaneously, on other occassions a further tranche may launch later, if the borrower wants extra funds over and above those originally advanced and this later tranche is secured against a low ranked charge (2nd or third) or subordinated behind original loan. Thank you for your replies, based on this when does the borrower and how do they actually pay off a loan, if I borrow I pay part of the loan back plus interest, how can a borrower get a loan for £7,000,000 and at the end of the term still owe £7,000,000 plus interest, or a customer who has several tranches do they start paying it back from the start or the end when they have the full loan amount? How do the loans work on MT? Please excuse my lack of knowledge. Keith They will pay off the loan at the end of the term, either through a refinance or selling the asset. Normally all tranches have the same end date as they are secured on the same asset. However I did forget a couple of loans ... the ones to the restaurant & plonk maker where the loans were drawn down in tranches of different lengths so the total loan could be paid back in phases. The other reason for tranches is that MTfunds the loans first and only has a certain float so launches larger loans in phases to recover the float to fund the next bit.
|
|
|
|
Post by khampson on Dec 10, 2016 17:21:06 GMT
Interest is paid monthly on all MT loans. Would be worth you reading the loan information pages on the MT website. I have, the more I read the more confusing it becomes, is there and idiots guide to MT 
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,870
Likes: 11,097
|
Post by ilmoro on Dec 10, 2016 18:08:20 GMT
Interest is paid monthly on all MT loans. Would be worth you reading the loan information pages on the MT website. I have, the more I read the more confusing it becomes, is there and idiots guide to MT Unfortunately not. I start writing one but got distracted/busy.
|
|
archie
Posts: 1,838
Likes: 1,842
|
Post by archie on Dec 10, 2016 18:15:09 GMT
I'll add that all MT loans so far have been repaid on the specified end date (*).
If a loan is extended, and you chose not to renew, you would get the capital back that morning. You don't have to wait for the renewal loan to fill as you do on some other platforms. MT cover this from their float.
Most lenders here do tend to renew though.
* There's no guarantee that will always be the case but it's a major strength of the platform.
|
|
am
Posts: 1,495
Likes: 601
|
Post by am on Dec 10, 2016 19:18:02 GMT
Varies. There have been quite a few this week but probably not much going foward. On average maybe 1 a week or perhaps two but there will also be renewals which you have a chance to grab a slice off if people arent renewing but it is very much FFF. A tranche is part of a loan, either drawndown at a different time or with different risk Some loans are drawndown in stages as the borrower requires funds. So if you consider the MH loan currently filling. The total facility will be £7m but the borrower doesnt require all £7m at the start (and doesnt want to pay interest on it) so the initial loan was £1.3m. Once that money has been spent, the borrower will request a further sum (another tranche) and so on. tranches also mean that the LTV is controlled beneath a certain level. So the initial valuation of the project allows a sum to be borrowed within a reasonable LTV eg 60%, once that money is spent the vlaue of the security/project has increased so a further sum can be lent but still at the same LTV. In this context each tranche is secured against the same charge and ranks equally in the event of a default. Alternatively, tranches may be drawn for the same project but may have varying degree of risk/rate. So in the case of the Birkenhead loan, tranche A is less risky than tranche B because in the event of a default it takes priority for repayment. Sometimes the two tranches are launched simultaneously, on other occassions a further tranche may launch later, if the borrower wants extra funds over and above those originally advanced and this later tranche is secured against a low ranked charge (2nd or third) or subordinated behind original loan. Thank you for your replies, based on this when does the borrower and how do they actually pay off a loan, if I borrow I pay part of the loan back plus interest, how can a borrower get a loan for £7,000,000 and at the end of the term still owe £7,000,000 plus interest, or a customer who has several tranches do they start paying it back from the start or the end when they have the full loan amount? How do the loans work on MT? Please excuse my lack of knowledge. Keith MT works with a model of monthly interest and bullet repayment of capital at the end of term, i.e. the loans are interest-only (non-amortising). Amortising loans have been simulated by lending multiple tranches of different lengths, so a lender's total exposure to a particular borrower decreases over time (unless the lender compensates by buying more, if he can, on the secondary market) - note that we have 6 monthly capital repayments, rather than the monthly capital repayments typical of consumer loans and mortgages. (Ilmoro has written the same, in different words.) Some loans are for working capital. While lent on short terms, they are routinely renewed. MT might offer loans on different terms in the future.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Dec 10, 2016 23:40:19 GMT
can a borrower get a loan for £7,000,000 and at the end of the term still owe £7,000,000 plus interest, or a customer who has several tranches do they start paying it back from the start or the end when they have the full loan amount? Loans pay interest on the same day of the month as their ending day of month, including paying on weekends. Payment calculations are done around midnight but at present not credited to accounts until soon after the start of business for a human review of the numbers. Some differences to some other platforms: 1. The interest isn't paid for all loans on one day a month. Each loan will pay on its own particular day. 2. Some places will have the borrower borrow extra money to pay the interest for the whole loan term. The loan can still default but you just own't see any sign of minor glitches with this approach because the platform already has the money. So it can mask some forms of trouble and costs the borrower more in interest on the borrowed interest payment money. With MoneyThing the monthly interest payments do come directly from the borrower.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,870
Likes: 11,097
|
Post by ilmoro on Dec 11, 2016 0:05:48 GMT
can a borrower get a loan for £7,000,000 and at the end of the term still owe £7,000,000 plus interest, or a customer who has several tranches do they start paying it back from the start or the end when they have the full loan amount? Loans pay interest on the same day of the month as their ending day of month, including paying on weekends. Payment calculations are done around midnight but at present not credited to accounts until soon after the start of business for a human review of the numbers. Some differences to some other platforms: 1. The interest isn't paid for all loans on one day a month. Each loan will pay on its own particular day. 2. Some places will have the borrower borrow extra money to pay the interest for the whole loan term. The loan can still default but you just own't see any sign of minor glitches with this approach because the platform already has the money. So it can mask some forms of trouble and costs the borrower more in interest on the borrowed interest payment money. With MoneyThing the monthly interest payments do come directly from the borrower. MT pay the interest monthly, the borrower may not. MT have said they actually use a variety of models ... retained, monthly or term interest and dont specify which is being used. Thats said the monthly model is the most common. p2pindependentforum.com/post/137037/thread
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Dec 11, 2016 12:13:52 GMT
Not so, c/o ilmoro ^^ ^^
|
|
|
|
Post by SophieThing on Dec 12, 2016 10:36:34 GMT
Interest is paid monthly on all MT loans. Would be worth you reading the loan information pages on the MT website. I have, the more I read the more confusing it becomes, is there and idiots guide to MT Hi Khampson, I'm working on a guide to new lenders now and it should be ready just after Christmas. In the meantime, feel free to message me or call in and either myself or one of the Things will be happy to help. Kind regards Sophie
|
|
