poppyland
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Post by poppyland on Jan 28, 2018 11:53:16 GMT
Apologies if there's already a thread on this, but do FS pay interest on loan parts that are up for sale? I can't find this info on their site.
After getting scared by the negative comments about FS here, I had a good look through my loan book and can't believe what a bunch of c**p I bought, all while trying to be careful - second charge, loans that rank behind other loans in the event of a default, etc. I've been listing and selling things, and to my surprise they shift pretty fast, but I wondered if I am losing interest whilst doing so.
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archie
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Post by archie on Jan 28, 2018 12:14:17 GMT
Apologies if there's already a thread on this, but do FS pay interest on loan parts that are up for sale? I can't find this info on their site. After getting scared by the negative comments about FS here, I had a good look through my loan book and can't believe what a bunch of c**p I bought, all while trying to be careful - second charge, loans that rank behind other loans in the event of a default, etc. I've been listing and selling things, and to my surprise they shift pretty fast, but I wondered if I am losing interest whilst doing so. Sort of. As interest is only paid at the end of the loan term the strict answer is no. However, if you put a loan part up for sale the selling price will adjust each day to reflect the rolled up interest. If you bought these loans on the primary market, anything sold would incur tax on the interest for the buyer rather than you. More information on tax etc. here
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ilmoro
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Post by ilmoro on Jan 28, 2018 12:16:38 GMT
Apologies if there's already a thread on this, but do FS pay interest on loan parts that are up for sale? I can't find this info on their site. After getting scared by the negative comments about FS here, I had a good look through my loan book and can't believe what a bunch of c**p I bought, all while trying to be careful - second charge, loans that rank behind other loans in the event of a default, etc. I've been listing and selling things, and to my surprise they shift pretty fast, but I wondered if I am losing interest whilst doing so. Yes, the interest (technically capital gain) continues to accrue to the seller while the loan parts are listed.
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poppyland
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Post by poppyland on Jan 28, 2018 12:20:52 GMT
Thanks for the answers. I understand how it works now, and in effect it means that not only is there no downside to listing parts for sale, but that the "theoretical" interest that I might get one day if I am lucky turns into real money as soon as I sell. I'm going to list some more parts right away!
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Post by eascogo on Jan 28, 2018 16:03:45 GMT
Thanks for the answers. I understand how it works now, and in effect it means that not only is there no downside to listing parts for sale, but that the "theoretical" interest that I might get one day if I am lucky turns into real money as soon as I sell. I'm going to list some more parts right away! Plus the risk of default as well as the tax burden is transferred to the buyer. Therefore to a tax- or a higher-tax payer should find it worthwhile selling before the end-of-term 30-day lockout . If necessary a discount may still be very worthwhile.
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Post by sunburyjane on Jan 28, 2018 22:11:35 GMT
I have lost faith in FS as a result of various loans, in particular Whitehaven, (potentially £1500 loss). I have however continued investing and selling at 100 days on the SM. The return is approx 9%, with virtually no risk, and no tax to pay. The SM is the only reason that I remain with FS. If FS up their game in the future I may return to letting the loans run to completion.
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ozboy
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Post by ozboy on Jan 29, 2018 0:08:28 GMT
"If FS up their game in the future I may return to letting the loans run to completion." If that's all you're threatening sunburyjane it will have zero effect; it's no odds to FS and they'll never up their game.  Withdrawal from investing at the Initial Loan Offering is what will cause them to have a serious rethink.
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poppyland
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Post by poppyland on Jan 29, 2018 12:12:23 GMT
I have lost faith in FS as a result of various loans, in particular Whitehaven, (potentially £1500 loss). I have however continued investing and selling at 100 days on the SM. The return is approx 9%, with virtually no risk, and no tax to pay. The SM is the only reason that I remain with FS. If FS up their game in the future I may return to letting the loans run to completion. Thanks for the advice. I'm sorry to hear that you're on track for a big loss. I've got £300 in the Wimbledon loan which I've now written off, and another £700 in defaulted loans that may or may not pay back something. Plus I've got 15k stuck on Lendy. The waiting is not nice at all. I like your strategy with the Funding Secure SM. Do you find you always have to sell at the maximum discount?
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Post by mrclondon on Jan 29, 2018 13:27:57 GMT
poppyland the basic rate tax liability is very approximately equivalent to 0.1% per 15 days age of the loan part. (calc is 12% pa => 2.4% basic rate tax ; 2.4%/365*15 = 0.1%). Would be 14 days at 13% pa. Apart from unpopular large loans, you should normally be able to sell fairly quickly at or below this rule of thumb ... I'm quite happy to buy on the SM providing the discount is covering the basic rate tax liability I'm inheriting.
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poppyland
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Post by poppyland on Jan 29, 2018 14:40:01 GMT
poppyland the basic rate tax liability is very approximately equivalent to 0.1% per 15 days age of the loan part. (calc is 12% pa => 2.4% basic rate tax ; 2.4%/365*15 = 0.1%). Would be 14 days at 13% pa. Apart from unpopular large loans, you should normally be able to sell fairly quickly at or below this rule of thumb ... I'm quite happy to buy on the SM providing the discount is covering the basic rate tax liability I'm inheriting. This is a great way of working out an appropriate discount to offer. Thank you. The FS SM does seem very active, and I'm pleasantly surprised at how easy it is to shift loan parts (mind you, this is perhaps because I was quite picky about what I bought in the first place).
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Post by df on Jan 29, 2018 14:49:34 GMT
I have lost faith in FS as a result of various loans, in particular Whitehaven, (potentially £1500 loss). I have however continued investing and selling at 100 days on the SM. The return is approx 9%, with virtually no risk, and no tax to pay. The SM is the only reason that I remain with FS. If FS up their game in the future I may return to letting the loans run to completion. Thanks for the advice. I'm sorry to hear that you're on track for a big loss. I've got £300 in the Wimbledon loan which I've now written off, and another £700 in defaulted loans that may or may not pay back something. Plus I've got 15k stuck on Lendy. The waiting is not nice at all. I like your strategy with the Funding Secure SM. Do you find you always have to sell at the maximum discount?I do similar with FS property loans for about 8 months now. So far never needed to use maximum discount. The highest I ever applied was -0.9%, but usually sell them at approximately -0.6/-0.4%.
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r00lish67
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Post by r00lish67 on Jan 29, 2018 15:13:12 GMT
Thanks for the advice. I'm sorry to hear that you're on track for a big loss. I've got £300 in the Wimbledon loan which I've now written off, and another £700 in defaulted loans that may or may not pay back something. Plus I've got 15k stuck on Lendy. The waiting is not nice at all. I like your strategy with the Funding Secure SM. Do you find you always have to sell at the maximum discount? I do similar with FS property loans for about 8 months now. So far never needed to use maximum discount. The highest I ever applied was -0.9%, but usually sell them at approximately -0.6/-0.4%. Sorry to be the party pooper, but before we're all carried away with this bulletproof strategy (which I confess I use myself much of the time), do note that only last week FS decided to suspend a loan almost exactly mid-term ( in Coventry, 3934175822) despite being the first charge holder. Whether that represents a shift in tact for FS a'la Lendy and their suspended loans, I'm not sure. Either way, no guarantees in this world, unfortunately.
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Post by df on Jan 29, 2018 15:28:31 GMT
I do similar with FS property loans for about 8 months now. So far never needed to use maximum discount. The highest I ever applied was -0.9%, but usually sell them at approximately -0.6/-0.4%. Sorry to be the party pooper, but before we're all carried away with this bulletproof strategy (which I confess I use myself much of the time), do note that only last week FS decided to suspend a loan almost exactly mid-term ( in Coventry, 3934175822) despite being the first charge holder. Whether that represents a shift in tact for FS a'la Lendy and their suspended loans, I'm not sure. Either way, no guarantees in this world, unfortunately. Luckily I'm not in this one, but it is good to know that this is happening.
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mikes1531
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Post by mikes1531 on Jan 29, 2018 15:30:33 GMT
I do similar with FS property loans for about 8 months now. So far never needed to use maximum discount. The highest I ever applied was -0.9%, but usually sell them at approximately -0.6/-0.4%. Sorry to be the party pooper, but before we're all carried away with this bulletproof strategy (which I confess I use myself much of the time), do note that only last week FS decided to suspend a loan almost exactly mid-term ( in Coventry, 3934175822) despite being the first charge holder. Whether that represents a shift in tact for FS a'la Lendy and their suspended loans, I'm not sure. Either way, no guarantees in this world, unfortunately. Also, there's no guarantee buyers will be found at the time you try to sell. I was trying to sell down my overweight powerboat position at a time when few were buying, so when sales were stopped with 30 days to go I was left holding a fair amount. I don't think it was a case of me not offering a large enough discount to be at the front of the selling queue, and I can't remember now -- it was more than a year ago! -- whether I could have increased the discount. In retrospect, if I could have, I should have!
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stub8535
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Post by stub8535 on Jan 30, 2018 12:08:40 GMT
Sorry to be the party pooper, but before we're all carried away with this bulletproof strategy (which I confess I use myself much of the time), do note that only last week FS decided to suspend a loan almost exactly mid-term ( in Coventry, 3934175822) despite being the first charge holder. Whether that represents a shift in tact for FS a'la Lendy and their suspended loans, I'm not sure. Either way, no guarantees in this world, unfortunately. Also, there's no guarantee buyers will be found at the time you try to sell. I was trying to sell down my overweight powerboat position at a time when few were buying, so when sales were stopped with 30 days to go I was left holding a fair amount. I don't think it was a case of me not offering a large enough discount to be at the front of the selling queue, and I can't remember now -- it was more than a year ago! -- whether I could have increased the discount. In retrospect, if I could have, I should have! Max discount, even when at 5%, was often not enough to shift some loans. £1200 of my £1700 In the hole caught me out by not selling. I hope the wonderful recoveries team work their considerable magic🤡👺 and get me something back.
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