copacetic
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Post by copacetic on Oct 27, 2016 0:32:31 GMT
Late to the discussion here but ITSM this is a small loan for saving stream just to test the water with lower interest rates to protect themselves. The lower interest rate is, I suspect, nothing to do with the default risk but simply the borrower was offered a lower rate loan from elsewhere and SS had to drop their rate to compete. Apart from people who get caught out with prefunding I believe the majority of this loan will be taken up by investors who have more capital than they can invest at normal 12% rates. If there aren't enough of these type of investors the SS platform takes on additional risk from having to hold onto the loan, reducing their float and opening the platform to the borrower default risk which we normally take on.
There is an additional very significant risk for those investors whose strategy involves offloading short dated loans in that we don't know what rates will be like in 4-5 months time. If they are higher than 9% then the secondary market for this loan could be poor.
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copacetic
Member of DD Central
Posts: 305
Likes: 666
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Post by copacetic on Aug 11, 2016 18:11:49 GMT
Hey folks. First post but I've been lurking on the forums a while.
I dipped my toe in the water at MoneyThing today and overall I like the site. However, I was looking at some of the pending loans, specifically the CSP505/506 with MoneyThing's partner C*** S*** which seem to be very popular. Is anyone else concerned by the risk of what would happen if C*** S*** went into administration?
Not sure if I can link it or not but a quick search for them on companycheck.co.uk would lead me to believe that business isn't going particularly well (looking at the Net Worth over the past 5 years or so it's negative and seems to be rapidly decreasing).
From what I understand the electronics securities in the upcoming loans would need to be liquidated promptly to achieve their value, which might not happen in the event of CS disappearing. Also I assume it's C*** S*** who are physically holding and valuing the securities so the question is how closely do MoneyThing audit this?
Anyone else have an opinion on what the risk is to lenders from C*** S*** loans?
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