spiral
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Post by spiral on Sept 19, 2014 7:39:24 GMT
Yesterday evening I had 2 e-mails arrive at 1924 to tell me that my order had been matched. I usually assume this time stamp to mean that both orders had been matched in the same loan so I decided to look at the contract detail. I was quite surprised that my Lender ID was different on each of these as was the borrower ID so my questions are:
Does this mean they are seperate loans or does the lender/borrowers ID get generatated on a per contract basis as opposed to a per loan basis?
Are e-mails sent as soon as matching occurs or is there some kind of batch run periodically?
My 2 offers had 48K between them and the first shortly before being matched was 14K from the front of the queue so although possible, it would have taken 1 large loan (50K+) for them both to be with the same borrower.
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jonbvn
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Post by jonbvn on Sept 19, 2014 11:06:19 GMT
Not sure of the answers to your specific questions. However, given the way the provident fund works, diversification is not an issue.
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spiral
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Post by spiral on Sept 19, 2014 12:04:07 GMT
Not sure of the answers to your specific questions. However, given the way the provident fund works, diversification is not an issue. It is if there is ever a catastrophic failure and the provision fund is insufficient to meet all its obligations however unlikely that may seem as this fund is by no means a cast iron guarantee. This is why I try to spread my offers in order that they don't match in the same loan but yesterday, if my matches were in the same loan (and I'm assuming they are) , I realised I'm unable to verify this.
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jonbvn
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Post by jonbvn on Sept 19, 2014 13:21:45 GMT
Checking the provision funds detailed T&C's I can see you are correct.
Something I should bear in mind when I drop bigger lump sums into RS.
Thank you!
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spiral
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Post by spiral on Sept 19, 2014 14:02:44 GMT
I normally either spread amounts at 1/2 my max exposure so that if 2 do go into the same offer, I'm not overly concerned or wait until 1 offer is matched and then send my next deposit if lending at max exposure. Yesterday rather caught me by surprise as I didn't expect 2 offers at max exposure with nearly £50K between them to go out in the same loan.
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Post by moneyball on Sept 19, 2014 15:05:38 GMT
I normally either spread amounts at 1/2 my max exposure so that if 2 do go into the same offer, I'm not overly concerned or wait until 1 offer is matched and then send my next deposit if lending at max exposure. Yesterday rather caught me by surprise as I didn't expect 2 offers at max exposure with nearly £50K between them to go out in the same loan. I take a similar approach with my lending. One thing that may have occurred is that there could have been a sizeable order from just one lender in between your two orders that then got cancelled (assuming you were ultimately matched with a single borrower of course.) I'm active on both 5 and 3 year markets so I usually split my orders between the two making it very unlikely I will get matched with the same borrower.
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Post by p2plender on Sept 19, 2014 16:28:48 GMT
What's the problem of being matched by the same lender unless you don't trust the pv.
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mikeb
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Post by mikeb on Sept 19, 2014 17:24:19 GMT
You answered your own question I think even Ratesetter would have to admit that you can't, 100%, trust the Provision Fund. It's not insurance. It's not a guarantee. It's a strong intention ... It's backed by the strong hope that their sums are right. A hope I share,along with other lenders. Now, I hope we never find out that RS got their sums wrong. In the event that they did, I don't want to be the genius that discovered I could get £000's lent out in a single order to a single borrower who happened to default on the same day the provision fund ran out. So, even if I've deposited a lump sum, it goes out in separate offers, spaced by other people's money so I don't end up lending large amounts to one borrower.
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jcb208
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Post by jcb208 on Sept 19, 2014 19:11:27 GMT
Never really thought about it before but how do you tell how many borrowers are linked to each contract. I have lent out a couple of largish amounts when maybe I should of been extra cautious and split it up a bit.Also are you ever told of bad debts or do ratesetter just pay out the full amount as I had 2 contracts repaid early the same day last week
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Post by westonkevRS on Sept 19, 2014 19:56:14 GMT
Interesting thread. Some split the lending loans for diversification, some (as I do) rely on the Provision Fund to do this.
I might also add that if you are reinvesting, every payment back forms a new loan and greater diversification. So that large loan will quite quickly be a smaller balance and relent into many smaller loans parts. And with near £8m in the Provision Fund there'd be plenty of time from now to get this diversity on any loans made today.
And no we don't communicate to lenders and difference between early repayment (the vast majority) and missed payments or defaults (the vast minority of early lender return of cash). I know some lenders might find this differentiation interesting, we think the majority don't care, want or need to know. And a setting to allow users to choose would be a lot of work to please a very small minority. It isn't going to happen, to be blunt and honest
Kevin.
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Post by moneyball on Sept 19, 2014 20:17:17 GMT
Interesting thread. Some split the lending loans for diversification, some (as I do) rely on the Provision Fund to do this. I might also add that if you are reinvesting, every payment back forms a new loan and greater diversification. So that large loan will quite quickly be a smaller balance and relent into many smaller loans parts. And with near £8m in the Provision Fund there'd be plenty of time from now to get this diversity on any loans made today. And no we don't communicate to lenders and difference between early repayment (the vast majority) and missed payments or defaults (the vast minority of early lender return of cash). I know some lenders might find this differentiation interesting, we think the majority don't care, want or need to know. And a setting to allow users to choose would be a lot of work to please a very small minority. It isn't going to happen, to be blunt and honest Kevin. I cant disagree with any of this. Personally, Id love to have "under the bonnet" access/information but fully appreciate why this isnt done and dont view RS any less because of it. The only thing I would say is that by lending out your initial lump sum in smaller amounts, it does, albeit to a relatively small extent, boost security/diversification. It is part of the process that the individual lender has complete control over... so why not exercise it? I appreciate that to some, this level of micro management isnt worth the payoff of slightly increased diversification and again, wouldnt think less of those who thought this way but for me, mainly due to the low amount of effort (in relation to length of the loan) required, its a worthwhile step.
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jcb208
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Post by jcb208 on Sept 19, 2014 20:22:39 GMT
I will in future,never really thought about doing that before until I realized I had a couple of 5K loans as single contracts
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Post by bracknellboy on Sept 19, 2014 21:28:48 GMT
.... And no we don't communicate to lenders and difference between early repayment (the vast majority) and missed payments or defaults (the vast minority of early lender return of cash). I know some lenders might find this differentiation interesting, we think the majority don't care, want or need to know. And a setting to allow users to choose would be a lot of work to please a very small minority. It isn't going to happen, to be blunt and honest Kevin. Ummm. Couple of things on this. Lending on RS - as with any P2P - I'm taking a punt on the platform. The longer the loan, the more risky the punt. Trying to split across loans is therefore a rational and reasonable risk management behaviour: especially on longer dated positions. A fact recognised by each position having a contract between the lender and the borrower. And a reason - trying to split/spread - that I find the RS platform a bit more cumbersome/time consuming etc to use than I would like given the model it is trying to work to. I would likely put somewhat more in - at the very least put more in more quickly - if I could specify both amount and max amount to go into any one contract. As it is, I'm generally left moving in a few k at a time, placing several separate offers and then getting bored and putting more in later (like a week or 2 later). And possibly still to find that maybe my split offers have got lumped into one borrower anyway. I may not much care whether a speicfic payment is from normal, early repayment or default provision fund payment. But in a world where there is no guarantee sitting behind my lent monies, I certainly would like the platform to publish its aggegrate underlying data i.e. default rates, trends on default rates and potentially over time trends on volume against credit risk band. That level of transparency would allow for open discussion / assessment by individuals as to whether the RS lending pattern and performance was compatible with their provision fund. Otherwise we all being asked to act on blind faith that RS have got it right. Maybe this data is available and I've missed it. But since I've seen no open debate other than what appear to be blind guesswork, I assume it isn't.
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spiral
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Post by spiral on Sept 20, 2014 8:29:37 GMT
Interesting thread. Some split the lending loans for diversification, some (as I do) rely on the Provision Fund to do this. I have seen some people post that they also do this to spread early repayment risk.
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spiral
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Post by spiral on Sept 20, 2014 8:35:48 GMT
if I could specify both amount and max amount to go into any one contract. As it is, I'm generally left moving in a few k at a time, placing several separate offers and then getting bored and putting more in later (like a week or 2 later). And possibly still to find that maybe my split offers have got lumped into one borrower anyway. This was exactly what I was trying to do before I started this thread except I tried to spred up the process by placing several offers on 1 day with what I thought would be ample money between them. I suppose if I knew the max loan size RS make and doubled that, it should be pretty safe. Did I read somewhere that £50K is max or am I imagining that? PS. How do you multiquote?
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