morris
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Post by morris on Sept 3, 2020 5:16:51 GMT
On the plus side Loanpad pay interest daily so it can be put to work to boost returns. Does anyone know how much this is worth in percentage terms?
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Post by Ace on Sept 3, 2020 6:43:25 GMT
On the plus side Loanpad pay interest daily so it can be put to work to boost returns. Does anyone know how much this is worth in percentage terms? A 4% per annum rate compounds up to 4.08% when paid daily and reinvested. EDIT: Since you can only invest in multiples of £10, you would need to have £91,250 invested to be able to get the full 4.08%.
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Post by Badly Drawn Stickman on Sept 3, 2020 6:58:59 GMT
On the plus side Loanpad pay interest daily so it can be put to work to boost returns. Does anyone know how much this is worth in percentage terms? There are quite a few boxes ticked in the plus side, and is not short of 'trumpet blowers' pointing them out. Indeed to date I have benefited very well from the platform, however if the last few years have taught me anything it is always check the minus side and know when the scales start to tip the wrong way. I will undoubtedly still use the platform, just in a different way.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Sept 3, 2020 12:08:01 GMT
When the doors slammed shut on RS and AC there was little time to foresee it and get out. Not to mention L. FS and MT as these were not comparable.
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Post by Ace on Sept 3, 2020 12:30:33 GMT
Despite our reticence here the news hasn't deterred others. Total platform funds increased by a net £53k today, almost spot on the average for the past month (£52k).
It will be interesting to see what happens when the rate drops kick in.
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Ukmikk
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Loanpad
Sept 3, 2020 16:10:00 GMT
via mobile
Post by Ukmikk on Sept 3, 2020 16:10:00 GMT
Yes, but 3 times very little is still very little. The margin for any sort of hiccup is wafer thin. I tend to agree, the risk and by association the rate are in relation to the loan type not what banks are paying in interest, Given I foresaw a rate cut about a page ago in this thread I can't claim any surprise that they have done it. I suspect many will be happy to go with it, for me it will no longer reflect the possible downside. Although according to the email the rate is indeed considered in relation to the market rate, which is currently lowered due to what the banks, with their mountain of cheap money, are paying.
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zlb
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Post by zlb on Oct 1, 2020 12:51:24 GMT
I agree that is approaching that point, but it's not quite there for me. It's still 3 times better than the best protected accounts with similar nominal notice. I'm staying put, but will probably be adding less than I would have done. Yes, but 3 times very little is still very little. The margin for any sort of hiccup is wafer thin. So something like a building not eventually meeting regs (eg fire) might indeed cause an overall issue. Are you talking about platform collapse? Personally I find it hard to understand that the risk has changed a great deal by paring 0.5-1% from the original offer. At 4% it will still have taken a lot of time to build up interest payments to protect from perceived capital loss. Perhaps the risk includes the current instability. Hmmmm, if LP, seemingly the most stable property-related offer isn't worth it, then perhaps none are...
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Greenwood2
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Post by Greenwood2 on Oct 1, 2020 13:16:47 GMT
Yes, but 3 times very little is still very little. The margin for any sort of hiccup is wafer thin. So something like a building not eventually meeting regs (eg fire) might indeed cause an overall issue. Are you talking about platform collapse? Personally I find it hard to understand that the risk has changed a great deal by paring 0.5-1% from the original offer. At 4% it will still have taken a lot of time to build up interest payments to protect from perceived capital loss. Perhaps the risk includes the current instability. Hmmmm, if LP, seemingly the most stable property-related offer isn't worth it, then perhaps none are... LP are development loans, and we've all seen (on other platforms) what can happen to developments if they get into trouble, sites get neglected, materials and finishes get weather damaged, not to mention the possibility of vandalism or squatters. Then you find no one wants to buy a partially complete development with who knows what problems. There is a good financial buffer on LP, hopefully enough to cover most eventualities. I'm not sure the risk has changed much, but if the reward goes down the balance shifts. I am now pretty much out of LP.
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Post by Ace on Oct 1, 2020 14:36:59 GMT
I'm still happy with LP and have been increasing my investment.
Their average LTV has been creeping up. Now at 32%. But the risk value from a single loan failure has been decreasing as the number of loans increases. Now at 30 loans. The largest loan on the platform currently represents 7.24% of total funds on the platform.
One concern for me is that they seem to have moved from lending against LTV to lending against LTGDV at a much earlier point in the development cycle for today's loan increase. I've questioned them on this and am awaiting a reply.
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Greenwood2
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Post by Greenwood2 on Oct 1, 2020 15:22:27 GMT
I'm still happy with LP and have been increasing my investment. Their average LTV has been creeping up. Now at 32%. But the risk value from a single loan failure has been decreasing as the number of loans increases. Now at 30 loans. The largest loan on the platform currently represents 7.24% of total funds on the platform. One concern for me is that they seem to have moved from lending against LTV to lending against LTGDV at a much earlier point in the development cycle for today's loan increase. I've questioned them on this and am awaiting a reply. I also noticed a number of loans are now 'extended' or 'overdue' with one 'default', but it's not unusual for development loans to overrun. Can you sell out of loans that are flagged like that?
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Post by Ace on Oct 1, 2020 15:36:13 GMT
I'm still happy with LP and have been increasing my investment. Their average LTV has been creeping up. Now at 32%. But the risk value from a single loan failure has been decreasing as the number of loans increases. Now at 30 loans. The largest loan on the platform currently represents 7.24% of total funds on the platform. One concern for me is that they seem to have moved from lending against LTV to lending against LTGDV at a much earlier point in the development cycle for today's loan increase. I've questioned them on this and am awaiting a reply. I also noticed a number of loans are now 'extended' or 'overdue' with one 'default', but it's not unusual for development loans to overrun. Can you sell out of loans that are flagged like that? Yes you can still sell out. I've tested many withdrawls at different points throughout the Covid19 crisis and all have been settled the following day, including ones for 5-figure sums when the amount of free cash on the platform was at its lowest. If ever Loanpad consider that there is a reasonable risk of capital loss to Investors on a particular loan, that loan will be removed from the daily reallocation of loans and the lenders will be stuck with their shares of that loan until the issue has been resolved. See section 12 of the Ts&Cs for the exact rules. I don't think such a situation has ever arisen on the platform to date. Loanpad obviously don't feel that there's a reasonable likelihood of losses on any of the currently extended or defaulted loans as they have not removed them. EDIT: I've had a look at all of the extended, overdue and defaulted loans and my 'professional' opinion (as a retired software engineer with precisely zero financial training) is that, from the info provided, there is no chance of a loss unless some totally dodgy events have occurred, à la FS, Lendy etal, which i don't believe to be the case.
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withnell
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Post by withnell on Oct 5, 2020 13:54:31 GMT
Looks like a flurry of deposits onto the platform in recent days - just shy of £1.5m sitting in cash now and no updates suggesting any recent loan repayments
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littleoldlady
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Post by littleoldlady on Oct 6, 2020 6:34:31 GMT
Looks like a flurry of deposits onto the platform in recent days - just shy of £1.5m sitting in cash now and no updates suggesting any recent loan repayments There is a wall of cash looking for at least inflation protection that used to stay in FSCS accounts but as that is no longer possible a portion of it is going into the lowest, even if not zero, risk. Personally I am taking the inflation hit rather than take any risk at all. It is not so much the risk of losing capital as the liquidity risk of having my funds suddenly locked into the term of the loans. It is possible that LP have an arrangement with the partner that they can hand back loans in the event of a liquidity event, but if so I doubt that this is contractual, more likely "best endeavours". However everyone's circumstances are different and each must make their own decisions.
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Post by Ace on Oct 6, 2020 8:10:25 GMT
Looks like a flurry of deposits onto the platform in recent days - just shy of £1.5m sitting in cash now and no updates suggesting any recent loan repayments There is a wall of cash looking for at least inflation protection that used to stay in FSCS accounts but as that is no longer possible a portion of it is going into the lowest, even if not zero, risk. Personally I am taking the inflation hit rather than take any risk at all. It is not so much the risk of losing capital as the liquidity risk of having my funds suddenly locked into the term of the loans. It is possible that LP have an arrangement with the partner that they can hand back loans in the event of a liquidity event, but if so I doubt that this is contractual, more likely "best endeavours". However everyone's circumstances are different and each must make their own decisions. Loanpad have what they call Liquidity Providers (essentially underwriters) that they can call on if the platform cash runs dry. Info on this was added to the Ts&Cs earlier this year. They don't say what the extent of the extra liquidity is, but it won't be for the whole loanbook. So, there is still a liquidity risk, but it's lower than the amount of free cash on the platform would suggest. Covid19 has been a big test of the liquidity and they've passed that test so far.
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IFISAcava
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Post by IFISAcava on Oct 6, 2020 8:26:53 GMT
Looks like a flurry of deposits onto the platform in recent days - just shy of £1.5m sitting in cash now and no updates suggesting any recent loan repayments There is a wall of cash looking for at least inflation protection that used to stay in FSCS accounts but as that is no longer possible a portion of it is going into the lowest, even if not zero, risk. Personally I am taking the inflation hit rather than take any risk at all. It is not so much the risk of losing capital as the liquidity risk of having my funds suddenly locked into the term of the loans. It is possible that LP have an arrangement with the partner that they can hand back loans in the event of a liquidity event, but if so I doubt that this is contractual, more likely "best endeavours". However everyone's circumstances are different and each must make their own decisions. Agreed - short term cash is a reasonable bet for at the moment - I prefer to even low risk property funds and short term bonds. I have moved a wad of the cash away from Sterling though, since much of my future cash is Sterling based.
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