ronoc
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Post by ronoc on Jul 19, 2017 11:16:14 GMT
Hi from looking at all my loans i can see that many people choose to put there loans up for sale 2 or 3 weeks before the end of term. Im wondering why they do this does it reduce the risk and if so why. Is the loan more at risk at the end stage than it is half way through? Thanks for your help with this.
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m2btj
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Post by m2btj on Jul 19, 2017 11:23:22 GMT
Where a loan makes full capital repayment at the end of term it is a tactic of some investors to sell before maturity. There is always a risk that the borrower may not be in a position to repay the loan & some investors cash out before this happens. This is often the case with new property developments where a developer needs to sell a number of properties to repay the loan. I see no point in trying to sell loans with just a few weeks to run before end date.
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robski
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Post by robski on Jul 19, 2017 11:30:09 GMT
There is also the case that money not invested is earning no return.
So people are also probably looking to flip what are now very short term loans into longer term ones, to avoid the risk that once repaid there is nothing to invest into.
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archie
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Post by archie on Jul 19, 2017 12:04:15 GMT
There is also the case that money not invested is earning no return. So people are also probably looking to flip what are now very short term loans into longer term ones, to avoid the risk that once repaid there is nothing to invest into. Certainly true in my situation, if I have a large amount invested I trim down as it's gets closer. That can backfire though, people sold out of a loan that got extended at 18%. Luckily I still held that one. 
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Post by badboyyardy on Jul 19, 2017 15:57:50 GMT
Just looking at strategy for this - is it exactly with 30 days left or is this too late as everyone else is trying to offload?
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m2btj
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Post by m2btj on Jul 19, 2017 16:25:17 GMT
I personally hold my selected loans to term & it's a strategy that has worked for me. Others may 'flip' their loans at sometime during the loan period. I don't understand why someone would buy a loan at 30 days or less & take the exposure.
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registerme
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Post by registerme on Jul 19, 2017 16:29:01 GMT
Just looking at strategy for this - is it exactly with 30 days left or is this too late as everyone else is trying to offload? This can be a strategy, but bear in mind that relying on the "greater fool theory" won't always work. My advice would be to only invest in offerings that you'd be happy to hold to term anyway, that way even if you find you can't sell out of them you should still have some residual comfort in your positions.
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Post by brokenbiscuits on Jul 20, 2017 17:14:45 GMT
I personally hold my selected loans to term & it's a strategy that has worked for me. Others may 'flip' their loans at sometime during the loan period. I don't understand why someone would buy a loan at 30 days or less & take the exposure. You think that the loan is a higher risk the closer to term but still hold your loans to term, knowing someone will likely buy if you list it? Seems odd to recognise risk along with a way to mitigate that risk and then do nothing. I buy loans I'm happy to hold but have never once to date been in a loan at term.
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archie
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Post by archie on Jul 20, 2017 17:23:12 GMT
I nearly always each loan to term but only on this platform.  I do trim down over time as new loans appear. |
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pickles
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Post by pickles on Jul 20, 2017 20:20:18 GMT
Standard loans can be defaulted at any time, so selling just before redemption is not necessarily a better policy. Loans with rollup + bullet, especially those where a monthly repayment is funded from an initial retention are more likely to be able to cover up any problems until the very end.
Having said that, after seeing this thread I put some of my AE loans on the SM this morning, simply because it's clear the SM will be swamped with buyers on the 31st. It's a strange thing but there are plenty of buyers for less than two weeks' worth of debt!
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ozboy
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Post by ozboy on Jul 20, 2017 20:47:22 GMT
Standard loans can be defaulted at any time, so selling just before redemption is not necessarily a better policy. Loans with rollup + bullet, especially those where a monthly repayment is funded from an initial retention are more likely to be able to cover up any problems until the very end. Having said that, after seeing this thread I put some of my AE loans on the SM this morning, simply because it's clear the SM will be swamped with buyers on the 31st. It's a strange thing but there are plenty of buyers for less than two weeks' worth of debt! We know there's many who are blissfully unaware of and don't read this site. And it's often "Housewives" who can arguably least afford losses.
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stub8535
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Post by stub8535 on Jul 20, 2017 21:28:53 GMT
Ss throwback as people transferred their holding to a superior site but did not leave bad habits behind?
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 20, 2017 21:42:15 GMT
Ss throwback as people transferred their holding to a superior site but did not leave bad habits behind? Oh stub8535, you're SO Money SuperMarket!!!
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jul 20, 2017 21:51:00 GMT
How tge hell did you know about my weekend garb?
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 20, 2017 21:54:28 GMT
I didn't!  |
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