twoheads
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Post by twoheads on Sept 13, 2017 9:11:41 GMT
A minute or two ago, all the bonus accrual values were updated to reflect the number of days overdue.
All bonuses now seem to be calculated as: %BA = %PA / 2 * OverdueDays / 365
The OverdueDays maxes out at 180, thus all defaults (all are 12%PA) have %BA equal to 2.96%.
We see then that the bonus is tied to the number of overdue days and that it stops increasing when the overdue term reaches 180 and the loan defaults.
EDIT - several hours later: So far, all (non-default) bonuses have been adjusted exactly as the loan terms have ticked over to one more day overdue.
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awk
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Post by awk on Sept 13, 2017 9:16:43 GMT
A minute or two ago, all the bonus accrual values were updated to reflect the number of days overdue.
All bonuses now seem to be calculated as: %BA = %PA / 2 * OverdueDays / 365
The OverdueDays maxes out at 180, thus all defaults (all are 12%PA) have %BA equal to 2.96%.
We see then that the bonus is tied to the number of overdue days and that it stops increasing when the overdue term reaches 180 and the loan defaults. Good spot ! also updated under "my loans" to show value in £££
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twoheads
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Post by twoheads on Sept 13, 2017 10:17:42 GMT
also updated under "my loans" to show value in £££ I hadn't noticed that.
Nice to see I've got a healthy 3p bonus on my £1 stake in PBL065... probably never pay out though!
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twoheads
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Post by twoheads on Sept 13, 2017 11:29:59 GMT
2.96% is a strange number, mathematically correct of course, but... Could still be 'work in progress' I suppose, but I'd hope they'd either programmatically round it up to 3% or extend the max period to 183 days so that it reaches 3%. Currently, the relevant support page is still quotes 3% at 180 days so, unless programmatically rounded up, that would need to change. (Tagging Lendy Support ) I noticed that too. However, according to the same page, the bonus accrues at half the interest rate during the tolerance period which is, of course, 180 days.
Interestingly, this calculation has also been applied to all repaid loans since 10/07/2017. I don't keep any record or any watches on the repaid loans so I don't know if those figures have changed.
EDIT - I do have a record for this year's repayments but it doesn't include the bonus percentages.
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twoheads
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Programming
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Post by twoheads on Sept 13, 2017 14:21:40 GMT
So far, all (non-default) bonuses have been adjusted exactly as the loan terms have ticked over to one more day overdue.
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awk
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Post by awk on Sept 15, 2017 13:53:11 GMT
Just checked the updated accrual bonus under "my loans" and it isn't very accurate. I was expecting it to be incremented by exactly the same amount as yesterday, but is was only half what is was yesterday !
On investigation, it appears to be calculated to only 2 decimal places.
PBL120 is a 12% loan, so bonus interest is 6% pa. It looks like they take this, divide by 365 and multiply by the number of days.
Rounding to 2 decimal places gives:-
48 days = 0.79%
49 days = 0.81%
50 days = 0.82%
so, some days increment by 0.01% and others 0.02%
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twoheads
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Post by twoheads on Sept 15, 2017 14:26:51 GMT
Just checked the updated accrual bonus under "my loans" and it isn't very accurate. I was expecting it to be incremented by exactly the same amount as yesterday, but is was only half what is was yesterday ! On investigation, it appears to be calculated to only 2 decimal places. PBL120 is a 12% loan, so bonus interest is 6% pa. It looks like they take this, divide by 365 and multiply by the number of days. Rounding to 2 decimal places gives:- 48 days = 0.79% 49 days = 0.81% 50 days = 0.82% so, some days increment by 0.01% and others 0.02% I expect the actual bonus amount paid will be calculated on the unrounded percentage and then rounded to the penny as normal *.
My data scraper alerts me if the %bonus reported to 2 decimals is any different to that which I expect. So far, three days in, no deviations.
* Normal for most organisations - you can never be sure with Lendy.
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awk
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Post by awk on Sept 15, 2017 14:32:40 GMT
Just checked the updated accrual bonus under "my loans" and it isn't very accurate. I was expecting it to be incremented by exactly the same amount as yesterday, but is was only half what is was yesterday ! On investigation, it appears to be calculated to only 2 decimal places. PBL120 is a 12% loan, so bonus interest is 6% pa. It looks like they take this, divide by 365 and multiply by the number of days. Rounding to 2 decimal places gives:- 48 days = 0.79% 49 days = 0.81% 50 days = 0.82% so, some days increment by 0.01% and others 0.02% I expect the actual bonus amount paid will be calculated on the unrounded percentage and then rounded to the penny as normal *.
My data scraper alerts me if the %bonus reported to 2 decimals is any different to that which I expect. So far, three days in, no deviations.
* Normal for most organisations - you can never be sure with Lendy.
I don't have a problem with displaying the percentage as 2 decimal places, but the £££ value has been calculated off this 2 decimal place number - given the amount of this loan (currently paying 18%) that I hold, then my bonus interest is out by a couple of pounds, not pence. Just looks a bit sloppy to me
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twoheads
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Post by twoheads on Sept 15, 2017 14:40:07 GMT
I don't have a problem with displaying the percentage as 2 decimal places, but the £££ value has been calculated off this 2 decimal place number - given the amount of this loan (currently paying 18%) that I hold, then my bonus interest is out by a couple of pounds, not pence. Just looks a bit sloppy to me Very sloppy... that's school boy/girl programming at it's most infantile.
Let's hope that on pay-out day (if that ever occurs), the rounded percentage will be in your favour and not Lendy's.
However, from what I've seen, the figures presented on line are calculated by different software to those calculated during the interest run (and presumably also the other processes where real cash is being moved in and out of our accounts).
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mikes1531
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Post by mikes1531 on Sept 15, 2017 20:38:31 GMT
... the bonus accrues at half the interest rate during the tolerance period which is, of course, 180 days. Do I understand this correctly...? Example: 12% loan: - Loan pays 12% p.a. monthly as long as Lendy hold interest paid in advance.
- When all the interest paid in advance has been distributed to investors,
and the loan is reclassified as IA, interest accrues at 18% p.a.
- After 180 days as IA, the loan is reclassified as DEF and interest
continues accruing, but the rate of accrual reverts to 12% p.a.
The first two phases seem reasonable enough, but the last phase seems rather weird to me. I expect that Lendy loan agreements call for an increased interest rate if the loan goes overdue, and that is what Lendy are sharing with investors in Phase 2. Phase 3 seems to suggest that the increased interest rate stops once a loan becomes more than 180 days overdue and the interest rate reverts to the level in effect before the borrower went into arrears.
Does that seem reasonable? Does anyone believe that Lendy's loan agreements actually wouldn't have any interest rate penalty at all for borrowers who are more than six months in arrears?
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twoheads
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Post by twoheads on Sept 16, 2017 10:28:09 GMT
Do I understand this correctly...? Example: 12% loan: - Loan pays 12% p.a. monthly as long as Lendy hold interest paid in advance.
- When all the interest paid in advance has been distributed to investors,
and the loan is reclassified as IA, interest accrues at 18% p.a.
- After 180 days as IA, the loan is reclassified as DEF and interest
continues accruing, but the rate of accrual reverts to 12% p.a.
The first two phases seem reasonable enough, but the last phase seems rather weird to me. I expect that Lendy loan agreements call for an increased interest rate if the loan goes overdue, and that is what Lendy are sharing with investors in Phase 2. Phase 3 seems to suggest that the increased interest rate stops once a loan becomes more than 180 days overdue and the interest rate reverts to the level in effect before the borrower went into arrears.
Does that seem reasonable? Does anyone believe that Lendy's loan agreements actually wouldn't have any interest rate penalty at all for borrowers who are more than six months in arrears?
I think you're over complicating it by merging the interest and bonus.
The interest and the bonus are completely separate and work differently. Once a loan part goes to IA or DEF:
- Interest accrues at 12% and will eventually be paid to whomever has held the loan part during the overdue term just as we're used to. The loan part may be sold and the interest is accrued by the various owners in accordance with their ownership periods (with interest being forfeited while the loan part is up for sale).
- Bonus accrues at 6% up to a maximum of 180 days but the bonus is attached to the loan part - the final owner of the loan part will receive the entire bonus (providing it's not up for sale when the loan repays). If you sell a loan part then you sell the bonus with it.
Effectively, nothing has changed as far as interest is concerned; interest works exactly as before.
The loan part's bonus is new and only applies to the final owner of the loan part at repayment time - any previous owners get no bonus.
I hope this makes the process more clear (and I hope my interpretation is correct!).
As for Lendy's loan agreements with borrowers: I don't think anything has changed, there are 'overdue' penalties and this system is merely passing some of those penalties back to the investors who hold to term. Of course, any interest and bonus paid on IAs and DEFs is discretionary and dependent upon the recovery of the loan. I would guess that interest would rank higher than bonus but that's speculation on my part.
P.S. You're analysis would work providing the loan part is never sold during its IA period. What you haven't taken into account is that the bonus is attached to the loan part and stays with it, passing in entirety to each new owner until the final owner receives the entire bonus upon repayment.
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mikes1531
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Post by mikes1531 on Sept 16, 2017 19:26:42 GMT
I think you're over complicating it by merging the interest and bonus. Actually, I think I oversimplified the situation because I was thinking only about parts held by the same investor throughout the IA and DEF periods until the bitter end, as twoheads noted in his PS. I hope this makes the process more clear (and I hope my interpretation is correct!). Yes, it does help. Thank you. And it agrees with my interpretation. Of course, any interest and bonus paid on IAs and DEFs is discretionary and dependent upon the recovery of the loan. I would guess that interest would rank higher than bonus but that's speculation on my part. I accept that any interest and bonus paid on IAs and DEFs is dependent upon the recovery of the loan. I don't accept that they are discretionary if the recovery proceeds are sufficient to pay them. They are discretionary to the extent that they could be paid out of the PF, but the demands on the PF appear to be so great these days that IMHO the chances of any interest/bonus payments coming from the PF are nil. ( savingstream: Do feel free to prove me wrong!  ) Finally, it would be helpful to know how Lendy would deal with a situation where recovery proceeds were enough to repay all capital but not all accrued interest and bonuses because it could affect investors' decisions about buying or selling parts on the SM. AFAIK, Lendy haven't told us, and I really don't expect they've spent any time thinking about the issue. I suspect they'll think about it only if the situation crops up.
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