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Post by aroominyork on Jan 12, 2018 12:32:35 GMT
I am in the one year market at 3.9% and want to sell out to move my funds to Funding Circle. I just phoned Ratesetter and asked if I would have to wait until their one year market rate on offer comes down to 3.9% until I can sell out. They said No - under their new system I can sell out anytime, get my funds released and just pay 0.3%.
I asked what stops me selling my one year market loan when the rate goes to say 4.5% or 5%, paying £30 and reinvesting at a higher rate. They said nothing at all stops me. Is this true, really?
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r00lish67
Member of DD Central
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Post by r00lish67 on Jan 12, 2018 13:10:19 GMT
I am in the one year market at 3.9% and want to sell out to move my funds to Funding Circle. I just phoned Ratesetter and asked if I would have to wait until their one year market rate on offer comes down to 3.9% until I can sell out. They said No - under their new system I can sell out anytime, get my funds released and just pay 0.3%. I asked what stops me selling my one year market loan when the rate goes to say 4.5% or 5%, paying £30 and reinvesting at a higher rate. They said nothing at all stops me. Is this true, really? Hi there. I must admit I had thought that the sellout fee for 1 year was higher than that, but you're right it does seem to be 0.3%. Anyway, the only thing I think you may be missing is that depending on when you sell your 1 year contract, your annual effective rate to sell out will be higher than 0.3%. For example, if you were to invest £1,000 at 4% and then sellout after just 1 month, then your capital will have only had the chance to earn a 0.33% return, which will then almost entirely be eaten up by the fee. This said, it could still well be worth it, if perhaps you want to 'force' an investment to pay interest early for tax reasons maybe, or if there's a really really good RS rate/product elsewhere. However, if you chase rates on RS, you may then suffer an early repayment on your shiny new investment making the exercise rather less profitable/fun!
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Post by propman on Jan 29, 2018 8:21:05 GMT
Do you get the accrued interest to date? If not then the cost of a sellout is not just the fee, but the interest foregone.
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jonah
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Post by jonah on Jan 29, 2018 8:47:47 GMT
Do you get the accrued interest to date? If not then the cost of a sellout is not just the fee, but the interest foregone. Apparently yes, you would. Not tested myself but that is the answer I got when I asked the same question myself.
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