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Post by petedemiswede on Sept 15, 2018 6:31:27 GMT
All
I've just pulled all my money out of the Rolling market as I was getting under 3%.
I need the money in the 6 - 12 month timeframe, and the rates in the 12 month market are so much better than the Rolling market it would easily justify paying the 0.3 percent penalty for an early withdrawal.
Am I missing something about how easy it is likely to be to withdraw the cash from the 12 month market after 6 months? Is it theoretically harder to take the money out of the 12 month market than the Rolling market? I know its not guaranteed, but then neither is the Rolling market withdrawal.
Thanks for the help
Cheers
Pete
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Post by fiatlender on Sept 15, 2018 8:15:46 GMT
The process works exactly the same as withdrawing from rolling, provided there is money on the market to replace your own. In case your are not aware, the 0.3% penalty is applied to your capital and not the interest rate you receive.
BTW, welcome to the forum  |
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ashtondav
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Post by ashtondav on Sept 15, 2018 8:20:40 GMT
Are there not other “adjustments”?
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star dust
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Post by star dust on Sept 15, 2018 8:34:13 GMT
Not about cashing out per se, but you will probably find at least a portion of the one year funds repay early. If you have them all in one lump rather than drip fed in, then the whole lot may repay early.
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Post by oppsididitagain on Sept 15, 2018 10:37:57 GMT
Hi Pete
Just something to think about on this Saturday Morning , I hope its not too confusing:-)
I had the same issue as yourself, returns lower than 3% on the rolling market so I cashed in a few weeks ago and invested in 1 and 5 years.
Maybe someone could check my figures but I think/I hope im correct and the following will apply.
I used 6% in 5year and 5% in 1 year as these rates are achievable at the moment.
If you lend in the 5 year market at 6% and cash in after 1 year and pay the 1.5% penalty on capital
on 1000 you would have earnt 55.19 in interest and have outstanding capital of 823.20. A penalty of 1.5% on the outstanding amount would be 12.35.
Earning you £42.84 (55.19-12.35) in 1 year on 1000. = 4.3% This isn't taking into account what you do with the capital repayment you would have been receiving and re investing them.
You stated 6 months so the number would be
Earnt £28.92.
Capital outstanding £912.92
Penalty £13.69
On 1000 lent at 6% for exactly 6months your Total income £15.23
In the 1 year at 5% as the loan is not amortising, the 0.3% on capital is going to be £3 when even you cancel the loan - so 180 days interest will earn you 24.65. Minus the penalty of £3, earning you 21.65 per 1000 for 6months. You are earning 13.7p per day for every 1000 invested at 5%
I hope these figures are correct, they will vary slightly depending on how many days in the month etc.. Hopefully you can now think about the best option for yourself.
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rscal
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Post by rscal on Sept 15, 2018 10:48:32 GMT
I was thinking about the fees 0.3% for 1 year and 1.5% for 5 years and it struck me that RS probably made them up to be '0.3% per year' for both. However the reducing balance on 5 year does at least mean if you cash out closer to the end than the start that you get much closer to the initial rate of return.
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Post by petedemiswede on Sept 16, 2018 9:20:57 GMT
Thanks all.
Sounds like its a bit of no brainer then if the difference between the Rolling and 12 month markets are so large.
Of course - right now it's 3.5% in Rolling and 4.3% in 12 months so less incentive.
Thanks
Peter
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Stonk
Stonking
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Post by Stonk on Sept 16, 2018 9:32:42 GMT
Thanks all. Sounds like its a bit of no brainer then if the difference between the Rolling and 12 month markets are so large. Of course - right now it's 3.5% in Rolling and 4.3% in 12 months so less incentive. Thanks Peter
I suggest you don't bother looking at the 1 Year market outside of business hours, especially at the weekends. It is extremely inactive, and the orders on the market are not at all indicative of the rates you can achieve.
During business hours, those low lender offers will be snapped up and matching will return to a sensible level of probably 5%-plus.
If you are in Rolling at an average of 3% and prepared to pay a penalty of 0.3% in 6 months time, then it is rational to accept any rate above 3.6% on the 1 Year market. But you should definitely aim higher!
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ding
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Post by ding on Sept 16, 2018 13:16:28 GMT
If you pay tax on interest then you need to consider that as well. Least they don't charge VAT on the early withdraw fee!
For 5 year what is the repayment schedule of principal? I've looked all over and can't find any info on this.
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Stonk
Stonking
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Post by Stonk on Sept 16, 2018 15:36:54 GMT
For 5 year what is the repayment schedule of principal? I've looked all over and can't find any info on this.
It follows a standard amortisation schedule, give or take a few pennies and/or roundings. There are plenty of online calculators for this, or Excel can do it.
For any given loan contract in your portfolio, you can find the exact numbers, albeit with quite a few mouse clicks:
1. Starting from your "My Account" screen, look at the "Your Portfolio" section ... 2. Click on "5 Year", which will open a screen headed "Your 5 Year Income Money" ... 3. Expand the "On Loan" section at the bottom ... 4. Click "Your money on loan", to bring up a list of all your 5 Year contracts ... 5. Locate one of interest, and click "View" at the right-hand side of the row, to bring up that contract's details ... 6. Expand the "Schedule of payments" sections at the bottom.
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ding
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Post by ding on Sept 18, 2018 13:23:20 GMT
For 5 year what is the repayment schedule of principal? I've looked all over and can't find any info on this.
It follows a standard amortisation schedule, give or take a few pennies and/or roundings. There are plenty of online calculators for this, or Excel can do it.
For any given loan contract in your portfolio, you can find the exact numbers, albeit with quite a few mouse clicks:
1. Starting from your "My Account" screen, look at the "Your Portfolio" section ... 2. Click on "5 Year", which will open a screen headed "Your 5 Year Income Money" ... 3. Expand the "On Loan" section at the bottom ... 4. Click "Your money on loan", to bring up a list of all your 5 Year contracts ... 5. Locate one of interest, and click "View" at the right-hand side of the row, to bring up that contract's details ... 6. Expand the "Schedule of payments" sections at the bottom.
Thanks. Didn't realise amortisation curves were standard I don't have any 5 year loans currently.
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