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Post by newlender on Dec 3, 2017 15:04:24 GMT
I put a few hundred into the 1 year this morning and was delighted when I got the 'matched' email. Turns out that the theory of time contracting is absolutely correct. According to RS a year can start today and end on December 20th. Now I need to get my mind around e=mc2!
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Post by dan1 on Dec 3, 2017 15:32:02 GMT
I put a few hundred into the 1 year this morning and was delighted when I got the 'matched' email. Turns out that the theory of time contracting is absolutely correct. According to RS a year can start today and end on December 20th. Now I need to get my mind around e=mc2! Perhaps RS was travelling near to the speed of light at the time? It's General Relativity that'll really test you...
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Post by newlender on Dec 3, 2017 17:21:29 GMT
On a serious note though, this makes forward planning virtually impossible. I'm trying to have between £500 and £1k coming in near the end or at the beginning of the month from this time next year when I finally stop working and have to rely on pensions and investments. I've cashed in my 3yr and some 5yr loans to do this and have re-invested into 1yr. I've just about managed that for a few months but it's not easy. I would like RS to offer a proper 1yr deal and/or the option to refuse a loan of less than 12 months if offered.
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Post by Deleted on Dec 3, 2017 22:37:21 GMT
There is no such thing as a 'proper' 1 year deal in this type of lending to consumers
Consumers have the right to a grace period to change their mind, and the right to repay early.
This, perversely, means your loans don't necessarily get more valuable as rates elsewhere drop (as in the case with fixed maturity bonds), because in this kind of lending, a rate drop means the higher rate loans are more likely to get refinanced early.
It's just the nature of the beast with this kind of lending. Better get used to it!
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Post by newlender on Dec 4, 2017 5:25:46 GMT
Early repayment has to be factored in of course and I totally accept that risk - I've had quite a few and reinvested the proceeds back into the market. But here I'm talking about a loan which starts on the 3rd and ends on the 20th - those dates are known at the outset (presumably the tail end of a loan that someone else has sold?). My point is that we should be able to refuse at the last minute if the difference between what we're signing up for and what we're getting is so large. By a proper loan I mean one that is expected to run for at least... let's say 10 months for the sake of argument. If it's repaid early, fair enough as nobody can predict that.
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alender
Member of DD Central
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Post by alender on Dec 4, 2017 10:45:58 GMT
I have had a match in the rolling market for 3 days which matured over the weekend. With the lost interest over the weekend and Mondays rates were low I withdraw the money to wait for a better rate and therefore lost a number of days interest (elsewhere) for a 3 day investment.
I complained to RS and asked if there is anyway to prevent this from happening, RS said no, its the way it works, I asked why there was not a feature to reject the investment if term was short as anything less than a 1 week was not worth it due to cash drag, RS said that this feature is not available and no plans to implement it.
It looks like I picked up a loan that had been cashed in by someone else.
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alender
Member of DD Central
Posts: 969
Likes: 656
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Post by alender on Dec 4, 2017 14:36:52 GMT
With RS auto investment will guarantee you a lower that optimal interest rate.
If you set you investment setting to automatically reinvest you will either have to take market rate (leaving you victim to the RS rate games, which has been seen in operation and well discussed) which can go very low or chose your rate which can leave your money earning no interest for a time.
In order to get a decent rate with minimal cash drag you need to remove repaid funds (losing 1 to 3 interest, more with bank holidays and late payment runs) when rates are low and add funds back when the rates are high, also you can take advantage of the crossed market.
For me this all became too much work so I move repaid funds elsewhere with no risk of early repayments, unpredictable contract lengths and other reason which have been well discussed on this forum.
A feature for users to set an initial minimum length of contact (say 1 week for rolling) makes sense to me, I have taken early repayments (as soon as allocated) on short rolling contracts (some allocated with just a few days to run) which end on a Friday or at the weekend which passed the problem/loss of interest to someone else. As I only invested when interest rates are on the higher side I then was able to get a longer term investment and not have to reinvest at the usually lower Monday's rates. However passing low yielding (caused but the short term not face interest rate) onto some else is just playing pass the parcel.
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