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Post by picanto on Feb 23, 2018 10:15:42 GMT
I mentioned this in the DFL005 thread but I was hoping that creating a topic on this subject might bring some explanation as to what is happening. I currently have one loan in negative days (DFL005) and I have noticed that the bonus accrual has been reduced from 0.7% to 0.5% and henceforth the amount of bonus interest I have accrued in this loan has been reduced. Furthermore, it seems to have remained static for the past couple of days at 0.5% so the incentive for the increased risk has been taken away.... Also this has happened for the default loans were the bonus accrual interest has been reduced to 2.5% from what IIRC was about 2.8% (I can't remember exactly). As far as I'm aware, there hasn't been any e-mail or notification from Lendy saying this was going to happen or any reasoning as to why it has happened, so could Paul or somebody else shed some light as to why the rules regarding Bonus Interest has changed? I know I may never receive the bonus interest but surely it is still owed to us regardless, so reducing it seems a bit of a kick in the teeth to be honest. Thank you.
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rs
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Post by rs on Feb 23, 2018 13:16:54 GMT
Definitions from Lendy website below. I've given up on Lendy and waiting for my late loans to finish.
Bonus accrual rate The bonus accrual feature will pay an enhanced monthly interest rate of 50% of the existing monthly interest rate. For example, a 12% annual loan paying 1% interest per month would accrue 0.5% of the monthly bonus. This will accrue over the remaining Tolerance Period, and will only be payable once the loan has been repaid, if we are successful in recovering sufficient property proceeds.
As an example, if a loan is 180 days overdue in the Tolerance Period the investor would receive a bonus accrual of 3%.
The bonus is attached to the loan part and is payable to whoever owns the live loan part at the date of repayment.
Notes:
* if a loan is extended, taking it out of the Tolerance Period and back into a new extended loan period which attracts interest at the published rate, any bonus accrued will be cancelled.
* if a loan part is up for sale - therefore not live - a bonus will not be paid.
(For example, if a loan is sold during the Tolerance Period, the new lender receives the bonus if they continue to hold the loan part until the loan is repaid.)
We believe this feature helps balance the risk/reward investment opportunity of overdue loans. This is paid in preference to Lendy's share of margins and fees.
Secondary trading of such loans is estimated to be just around 1% of overall trading. The potential for volatility in the value of loans that are non-performing is higher than for other loans and this change will help prevent less experienced lenders purchasing more volatile loans.
Tolerance Period (TP)
A mark to signal that the loan has entered the Tolerance Period and that we are paying monthly interest out of our own funds. Note, this will change on August 1 2017 when the borrower will become responsible for paying the interest.
Tolerance Period Accruing
A mark to signal that the loan has entered the last 90 days of the Tolerance Period and that monthly interest is now accrued.
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Post by da2279 on Feb 23, 2018 13:38:59 GMT
It would appear that they have been playing with the back end of how this is shown/calculated on the web....my understanding for a 12% loan is: -
-1 Month 0.5%
-2 Months 1%
-3 Months 1.5%
-4 Months 2%
-5 Months 2.5%
-6 Months and above 3%
Whether this is calculated on a daily basis and whether a month is calculated as 30 days who knows.
What i can see is that anything over -180 days is showing as 2.5% and by my reckoning should be showing 3% bonus, i also remember they only ever seeing 2.96% maximum (if i recall correctly)
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webwizard
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Post by webwizard on Feb 25, 2018 7:06:36 GMT
Looks like there is an error in the code of the web pages. All the defaulted loans more than 180 days overdue should show 3% bonus for a 12% loan but instead show a 2.5% maximum. For a financial institution getting numbers correct and delivering attention to detail are essential. Get it right please Lendy Paul64. |
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Post by picanto on Feb 25, 2018 17:45:27 GMT
Looks like there is an error in the code of the web pages. All the defaulted loans more than 180 days overdue should show 3% bonus for a 12% loan but instead show a 2.5% maximum. For a financial institution getting numbers correct and delivering attention to detail are essential. Get it right please Lendy Paul64 . Well my bonus interest for DFL005 still remains the same as it was 4 days ago at £17.24 and bonus accrual at 0.5%... It may just be pure coincidence but it's been faulty since Lendy changed the account overview colouring from green to blue. I can't explain how the two are related but perhaps they made a mistake in the coding but surely Lendy staff would have noticed by now?
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Post by GSV3MIaC on May 25, 2018 14:36:50 GMT
Looks like there is an error in the code of the web pages. All the defaulted loans more than 180 days overdue should show 3% bonus for a 12% loan but instead show a 2.5% maximum. For a financial institution getting numbers correct and delivering attention to detail are essential. Get it right please Lendy Paul64 .
Well, 3 months later and it is still displaying incorrectly. Seems like changing 'int()' to 'round()' or similar is proving too strenuous for the web team. Come on guys, if you want to play in FinTech you need to be able to work one, or both, of the Fin or the Tech (see also PBL120 interest miscalculation .. sorry 'banking error').
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TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
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Post by TheDriver on Jun 30, 2018 2:49:25 GMT
I've been puzzling this, so FWIW here's my interpretation: Definitions from Lendy website below. I've given up on Lendy and waiting for my late loans to finish.
Bonus accrual rate The bonus accrual feature will pay an enhanced monthly interest rate of 50% of the existing monthly interest rate. For example, a 12% annual loan paying 1% interest per month would accrue 0.5% of the as a monthly bonus. This will accrue over the remaining Tolerance Period, and will only be payable once the loan has been repaid, if we are successful in recovering sufficient property proceeds.
makes sense with the foregoing; As an example, if a loan is 180 days overdue in the Tolerance Period the investor would receive a bonus accrual of 3%. Seems to make sense. However, t he method implemented seems to be much more detailed, given by:
(no of days overdue / 365) x (interest rate / 12) x 50%, which after the max 180 days @12% gives 2.96%. Why so contrived??? edit: all it needed was: int (no of days overdue / 30) x (interest rate / 12) x 50% to stop at 180 days and it would have been consistent, and clear to everyone.The bonus is attached to the loan part and is payable to whoever owns the live loan part at the date of repayment. Logical and reasonable for whoever keeps the faith. Notes: * if a loan is extended, taking it out of the Tolerance Period and back into a new extended loan period which attracts interest at the published rate, any bonus accrued will be cancelled. What !?! They've got to be having a giraffe! They seriously think it's reasonable to unilaterally withdraw the expected bonus for problem loans?!? I suggest that if the loan can't be managed in a timely and controlled way before the due date, at least pay the bonus up to the extension date, and/or give lenders the vote on whether to accept any proposal. * if a loan part is up for sale - therefore not live - a bonus will not be paid. (For example, if a loan is sold during the Tolerance Period, the new lender receives the bonus if they continue to hold the loan part until the loan is repaid.) We believe this feature helps balance the risk/reward investment opportunity of overdue loans. This is paid in preference to Lendy's share of margins and fees. Secondary trading of such loans is estimated to be just around 1% of overall trading. The potential for volatility in the value of loans that are non-performing is higher than for other loans and this change will help prevent less experienced lenders purchasing more volatile loans. I couldn't understand this last bit, so I asked Customer support what it meant. Having heard nothing for a week I chased it up, and immediately received a reply thanking me for pointing it out and that stating that the wording would be changed. So apparently they must have thought it was wrong, and I wondered what did anyone else make of it? Tolerance Period (TP)
A mark to signal that the loan has entered the Tolerance Period and that we are paying monthly interest out of our own funds. Note, this will change on August 1 2017 when the borrower will become responsible for paying the interest. Tolerance Period Accruing
A mark to signal that the loan has entered the last 90 days of the Tolerance Period and that monthly interest is now accrued. Now all superceded by all IA |
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Post by loftankerman on Jun 30, 2018 8:08:11 GMT
I haven't given much thought to this bonus malarky. It seems to be fanciful nonsense about never to be paid sums. I assume Lendy's aim is to bring the affected loans into bargepole range of investors who haven't already strongly sensed impending doom and pacify those already stuck with them. The terms and calculation methods do need to be properly defined and implemented though.
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hazellend
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Post by hazellend on Jun 30, 2018 8:37:12 GMT
I haven't given much thought to this bonus malarky. It seems to be fanciful nonsense about never to be paid sums. I assume Lendy's aim is to bring the affected loans into bargepole range of investors who haven't already strongly sensed impending doom and pacify those already stuck with them. The terms and calculation methods do need to properly defined and implemented though. Was paid in full for PBL120 with Lendy accepting a positive change in their bonus policy
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TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
Likes: 190
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Post by TheDriver on Jul 1, 2018 9:37:03 GMT
I haven't given much thought to this bonus malarky. It seems to be fanciful nonsense about never to be paid sums. I assume Lendy's aim is to bring the affected loans into bargepole range of investors who haven't already strongly sensed impending doom and pacify those already stuck with them. The terms and calculation methods do need to properly defined and implemented though. Was paid in full for PBL120 with Lendy accepting a positive change in their bonus policy Well that's good, but it doesn't mean everything's rosy in Lendyland. You can only have avoided losses by passing them on to other less savvy lenders, so while there is such a backlog of NPLs and unrecovered funds you must excuse some of us for scepticism.
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