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Post by extremis on May 17, 2016 18:26:13 GMT
Small businesses may not have assets to offer as collateral, so a personal guarantee is given instead. It is the written promise of the business owner that he will pay back the loan if the business fails to for any reason. As far as i understand, it means that lenders have a legal claim over the personal assets (if any) of the guarantor. IMHO, a personal guarantee is not as good as collateral, but still better than nothing.
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Post by extremis on May 17, 2016 17:18:01 GMT
Yes, deliberately is what i meant. However, whether a p2p lending platform is intended to be a Ponzi scheme, or it starts out legit and turns to Ponzi after some time, it makes no difference for the investors. The point is whoever is caught in a Ponzi scheme at the time it collapses will have little chance of making a withdrawal and will loose the money invested. FCA regulation is, of course, good news for us lenders, but i am not sure that's enough. I am afraid platform risk remains high (and also underestimated as most discussions about p2p lending risks usually refer to the possibility of loan defaults rather than the possibility of platform folding).
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Post by extremis on May 15, 2016 17:39:14 GMT
I had a small problem with autobid. I tested it and had it to max 1 month, but it invested in a load of 3 months. Fortunately, Mintos support is esxcellent and bought back my investment immediately. People had occasionally mentioned some auto-invest problems in the past, but i thought they had solved them. I guess, there is no such thing as bug-free software. However, auto-invest has worked flawlessly for me (until now). A suggestion for Mintos: as an option, auto-invest could select and reserve (up to a certain period of time) the loans selected, and then we could verify auto-invest selections. Or, even better, all loans (whether manually selected or via auto-invest) could be sold back to loan originators up to a certain period of time (e.g. 24h); after that, purchases would be considered final and loans could be sold only on SM. What do you think?
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Post by extremis on May 14, 2016 21:47:46 GMT
Passport or ID card scan is required for withdrawals. If you like, you can upload the documents right away: login to your account and go to Deposit/Withdraw -> Withdraw.
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Post by extremis on May 13, 2016 23:39:58 GMT
With the recent boom of p2p lending, i am afraid Ezubao won't be the last Ponzi scheme. Half year ago, we also had Trustbuddy, i wonder who will be next? The real question is, what are the early signs that a p2p platform might actually be a Ponzi scheme? Is there any way to be sure, or are we condemned to 0.05% interest, or so, that banks offer nowadays? I mean, loan default risk is one thing, but platform fraud is completely another; while there is always a possibility a platform folds, a Ponzi scheme will certainly do so by design.
What if it was standard practice that borrowers' details (name, address, full contact information) were listed with each loan? Wouldn't that mitigate the risk? Or the only viable solution is to extend compensation to investments (up to a certain amount)?
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Post by extremis on May 8, 2016 21:31:34 GMT
How on earth this distribution was concluded? I mean, Mintos does not provide investor data, does it?
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Post by extremis on May 3, 2016 20:49:21 GMT
What is the current status of Mintos? Have they moved to UK yet? And what will that mean for investors? Will the new loans then be issued in EUR or GBP? What else should we expect to change when (if?) the relocation does happen?
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Post by extremis on May 3, 2016 17:57:10 GMT
Thanks, JamesFrance. That makes perfect sense now. For example, suppose someone invests 100E on a loan with 12% interest rate (1% per month) and 6 months term. After 6 months, total principal repaid will be 100E and interest paid 6E. If he reinvests the full amount (106E) on a similar loan, after 6 months total principal repaid will be 106E and interest 6.36E. Therefore, after 1 year, total principal repaid will be 206E, while (compound) interest will be 12.36E. Interest to total principal repaid ratio is only 6%, but annual return is 12.36%. The difference would be more striking for even shorter term loans as principal would have to be repaid several times a year, while (compound) interest would remain slightly over 12%.
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Post by extremis on May 2, 2016 22:03:17 GMT
Mintos reports a 12.59% average net annual return, but how exactly is this calculated? Is it the theoretical average return rate if all loans pay on time and there are no defaults or early repayments?
In the statistics page we see that principal repaid to investors is currently 14168464E, while interest paid is 630027E, that is 4.45%. Even if we subtract the total value of loans sold on SM, 1217788E, from the principal repaid to investors we get an average return rate of 4.86%. That is still way below the advertised average NAR of 12.59%, but also below the lowest interest rate for any single loan currently listed! How is this even possible? I must be missing something here, any ideas?
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Post by extremis on May 2, 2016 14:34:49 GMT
I think that the real problem with giving priority to large investors is they could manipulate the market. Lets assume that someone with the necessary funds always takes priority on Autoinvest queue and takes all the highest interest (or lower risk, or best return to risk value) loans and then lists them on SM with a premium. If the loans with a premium are sold then he obviously makes a profit, while his funds are released and could be re-invested. If the loans are not sold on SM he still benefits from picking the cream of the cream. Most importantly, whatever the case, the returns will decrease (risk will increase) for all other investors since the best loans are already taken and resold, but usually with a high premium, on SM. For example, what stops a loan originator from "buying" his best loans and "resell" them on SM for lowering the interest rate? Small investors would then have to accept the lower interest - higher risk loans, or move to another platform.
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Post by extremis on May 2, 2016 9:55:03 GMT
It would be very useful if the total amount invested was also reported at the end of the list. So, one could setup the filter to only e.g. Mortgage loans or loans with Buyback guarantee and get the total amount invested.
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