niceguy37
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Post by niceguy37 on Aug 3, 2017 9:58:29 GMT
The AC look-a-like thing with target amounts doesn't work terribly well with the multi-tranche loans that we see on MT. For instance there are currently 10 tranches of MH and all of them are due to repay on the same day and none of them are more desirable or less risky than any other. To make buy targets work, MT is going to need much more obvious linking between loans and the asset they're secured on so you can place your target against the asset rather than a specific loan identifier. Even this isn't enough if there are multiple charges against the asset and investors get paid a higher rate for the second charge loan. For assets with multiple charges you'd also have to select the target LTV you're prepared to lend against. If there are multiple tranches with different end dates, that adds a further complication because when adding a target amount for the asset you'd also need to add criteria for the minimum time to run on any purchase to ensure you didn't automatically buy some of a tranche that was due to repay next week. That's starting to look like a rather hefty and complicated redesign... If MT wanted target-setting I think it would be best to have a dedicated target-setting screen that showed a list of grouped loans (i.e. all the equal-ranking tranches of a loan totalled into a single row) in a table. The columns might be Loan Name, Total Loan Value, LTV eg "70% LTV" or "60% GDV", Rate, (Loan) End Date, (Amount) Available, Status (Pipeline/Bidding/Active/Suspended/Late/Default*), (Amount) Invested, Target (Amount). Then a user could come along to one screen, decide what loans he or she would like, load in their cash, and sit back and relax. A weekly or monthly update email will summarise how much of each loan they've bought, how much interest they've been paid, and the balance on their account, prompting them to log in to review progress and any new loans, and load in more cash as required. Obviously there'd be a bit of programming involved so that if a lender set or updated a target, added cash or received an interest payment then the system would need to check if there were any of the targetted loans available. The fun comes when an interest payment or loan repayment is processed to many lenders "simultaneously". Who gets what if there is more demand than supply? AssetzCapital developed some very complex sounding algorithms to attempt to handle this, which took them a while and a lot of effort to get right. I would suggest MT should, after an interest or loan repayment, simply select a list of lenders with active targets and cash on hand, and then process through this list in order of their lender number, allocating up to a maximum of, say, £50 per lender. (The system would need to remember who the last lucky lender was to get an allocation, and start again from the next numbered lender the next time.) It's not perfect (some people would try to game the system by opening multiple accounts, if a lender got a loan repayment of £1000 and wanted a new loan with plenty of availability he or she might end up with 20 lots of £50 each) but it's fairly simple to specify and program and for lenders to understand, and should enable lenders to greatly reduce the time required to run an MT account, speed up sales, and improve the platform efficiency.
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Post by shyinvestor on Aug 3, 2017 10:30:02 GMT
If I can add my two penn'orth to this... It seems to me that it is a question of reasonable access. It is clearly not reasonable to be dealing in very small amounts, but what is a reasonable sum to have as a minimum amount to withdraw or invest? I would suggest withdrawals should be limited to at least £10.
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Post by GSV3MIaC on Aug 3, 2017 11:01:05 GMT
The minimum investment is already set at £1, but I could live with £10 I expect. For withdrawals, £10 seems reasonable (unless you are closing your account).
I do think some sort of 'auto reinvestment' would make the whole product more attractive to people who don't want to be having to remember to log in, check, and re-invest practically every day (some other platforms always pay everything on 1st month, which does reduce the need to manually tend things to monthly rather than daily). The good news is that it is (usually) only interest, we don't have amortising loans bringing back capital as well, so the amounts are small.
Auto invest in a loan/loans of my choice would be fine. Or even 'in the next 12% loan to go live', or whatever .. even my S&S ISA has automatic re-investment as an option.
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robski
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Post by robski on Aug 3, 2017 11:11:38 GMT
I dont see any need to change the investment amount, if the minimum is £1 I don't see (other than reducing a few data points in the tables) any advantage in £10
Plus it also means the minimum sale would need to be £10 as well, and that if someone wanted to list eg £19 then the minimum purchase for that would have to be £19. Plus loads of other smaller issues in say someone listed £24, would you allow a £15 purchase?
For withdrawls as sensible minimum for fee free (unless closing account) seems fine.
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Post by Duane Dibley on Aug 3, 2017 11:23:56 GMT
If MT don't want people to make small withdrawals then they should pay all interest on one day a month like other platforms.
As it is people who want to withdraw their interest have to log in 20-30 times a month to withdraw it or else have it stood around earning nothing.
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Post by markp2p on Aug 3, 2017 11:29:31 GMT
I'd be happy with any reasonable minimum withdrawal if MT need to do so to save costs. £10 or £25, whatever they feel is necessary.
I'm not sure why anyone feels the need to withdraw tiny amounts simply because they would otherwise be doing nothing. At 12% p/a, even £25 earns less than 1p a day, so the opportunity cost of not reinvesting it seems negligible.
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archie
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Post by archie on Aug 3, 2017 11:33:54 GMT
If MT don't want people to make small withdrawals then they should pay all interest on one day a month like other platforms. As it is people who want to withdraw their interest have to log in 20-30 times a month to withdraw it or else have it stood around earning nothing. I rather they keep the interest payments as now. I usually reinvest my interest in the currently available loans. How about an option to automatically withdraw interest once it exceeds the new minimum amount (or a higher, user preset amount). It would need a way to distinguish between deposits and interest so that the money you've just transferred in isn't withdrawn automatically again.
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robski
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Post by robski on Aug 3, 2017 11:40:12 GMT
I am the same, i reinvest, with a decent spread of loans you always have interest trickling in. My worst case so far is having 99 pence over a weekend. Best case is actually 0.00. I just don't understand the drama on not earning interest on pence, or people thinking to withdraw it. Makes literally no sense to me at all. And I say this as someone you used to keep literally £20,000 exactly in my 123 account, with a savings account alongside to keep a small balance in so that I could top up my 123 account daily as DDs etc left. The worst case is you have 99 pence you can't spend in moneything. Even if that was for the whole year what else are you going to do with it? Stick it in a 3% account?, thats 3 pence interest per year! (pre tax ) I am sure Ed would rather give everyone 3p and stop the pence withdrawls happening
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archie
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Post by archie on Aug 3, 2017 12:29:06 GMT
A monthly interest run will make it much harder for people to sell quickly. It's often the interest payments that purchase the parts on sale. A prime example is Lendy where queues only move significantly after the interest run. I doubt many would keep a balance on the off chance of buying something from the sm. Keep it as it is.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Aug 3, 2017 16:36:38 GMT
If MoneyThing save up all your bits of interest and then dish it out to you at the end of the month it's still not earning you any interest in the meantime; you just don't know it's there. It's just the same as them paying it out as and when it's due, but with the added advantage in that case that those of us who accumulate enough to occasionally invest sensible sums as we go along may do so. You can just pretend it isn't there, log in and look at month end, and you then have exactly what you want. The spreading of SM activity throughout the month is a very desirable attribute that many would miss once it were gone.
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Post by keyboardworrier on Aug 3, 2017 17:16:16 GMT
Do MoneyThing have any issue with small investments, or is it just the withdrawals that cause them extra work? I always invest whenever I have over £1 but will stop if it's an issue for them.
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johni
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Post by johni on Aug 3, 2017 18:19:38 GMT
Do MoneyThing have any issue with small investments, or is it just the withdrawals that cause them extra work? I always invest whenever I have over £1 but will stop if it's an issue for them. This is just about charges by their bank for withdrawing small amounts. This adds to overall costs.
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mikeh
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Post by mikeh on Aug 4, 2017 9:30:51 GMT
Do MoneyThing have any issue with small investments, or is it just the withdrawals that cause them extra work? I always invest whenever I have over £1 but will stop if it's an issue for them. This is just about charges by their bank for withdrawing small amounts. This adds to overall costs. I think it's more than just bank charges. Withdrawals are processed manually which costs money.
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