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Post by oppsididitagain on Jan 5, 2017 11:44:46 GMT
Morning,
Over the last few weeks most of my 1 year contracts have been repaid early ? They were averaging about 4.3%.
Some of these contracts were only completed in Oct/Nov, (so only ran for about 4-6 weeks)
Is this due to the borrowers defaulting, or is it me being pessimistic and thinking RS are
purposely cancelling these contracts as to fund the loans cheaper.
1. You don't really see above 4% in the 1 year now.
2. To make me switch to a lower rate in either 1,3,5 year products ?
Thoughts ?
HNY everyone
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r00lish67
Member of DD Central
Posts: 2,691 
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Post by r00lish67 on Jan 5, 2017 14:09:20 GMT
It'll either be borrowers defaulting or simply repaying early, possibly as financing is available more cheaply elsewhere. I was fortunate enough to snag £3.8k on a 1 year 9.2% rate when a peculiar bump happened in Dec 2015 - I fully expected that to repay within weeks and it ran to term (go figure). I do think Ratesetter has problems (see provision fund threads), but I don't personally buy any conspiracy theory type stuff.
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Post by westonkev on Jan 5, 2017 14:14:54 GMT
...... or is it me being pessimistic and thinking RS are purposely cancelling these contracts as to fund the loans cheaper. Thoughts ? HNY everyone Unless things have changed, RateSetter don't refinance loans to make them cheaper for their cost of funds (and hence increase the margins). I suppose it could make financial sense, but would be unfair and require updates/changes to contracts that would make it very difficult. It just isn't done, unless the borrower needs to refinance for whatever reason such as increasing the term. Loans paid back early are virtually always due to early redemption, or in a minority of cases default. Kevin.
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rick24
Member of DD Central
Posts: 244
Likes: 138
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Post by rick24 on Jan 5, 2017 17:46:50 GMT
I wouldn't blame a borrower for repaying early if they can refinance at a lower rate - it's the sensible thing to do.
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Post by stevepn on Jan 5, 2017 21:11:34 GMT
I had a 3 year loan repaid early this morning. I don't know if people get money for Christmas and maybe a small Christmas bonus from work and so decide to repay early.
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Post by jonboy73 on Jan 6, 2017 0:47:18 GMT
I had a 3 year loan repaid early this morning. I don't know if people get money for Christmas and maybe a small Christmas bonus from work and so decide to repay early. or borrowing more and consolidating old debts..
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