archie
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Post by archie on Nov 29, 2018 11:35:17 GMT
8 loans at £25 is only £200. I have considerably more than that in the two loans that are repaying so my risk reduces anyway.
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nyneil
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Post by nyneil on Nov 29, 2018 12:11:40 GMT
One thing that i've not seen defined is, 50% of what? The amount loaned to someone who has pawned Granny's ring, or 50% of what TCS hope they could sell it for? I guess it will be the latter. Even so, i've had a punt.
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IFISAcava
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Post by IFISAcava on Nov 29, 2018 12:16:52 GMT
8 loans at £25 is only £200. I have considerably more than that in the two loans that are repaying so my risk reduces anyway. £400 if you have an ISA and a standard
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archie
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Post by archie on Nov 29, 2018 12:34:02 GMT
8 loans at £25 is only £200. I have considerably more than that in the two loans that are repaying so my risk reduces anyway. £400 if you have an ISA and a standard Only have standard.
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IFISAcava
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Post by IFISAcava on Nov 29, 2018 12:41:55 GMT
£400 if you have an ISA and a standard Only have standard. It's not the easiest ISA to manage - the flexibility gets used a lot with the uneven loan availability - but does add some spice to my portfolio at the high risk high return end (along with ABLrate and LLI)
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corto
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Post by corto on Nov 29, 2018 14:11:06 GMT
It says in the description " .. agreement with the borrower is an interest only agreement, where interest is paid monthly and capital is paid at the term. " "Each of those smaller loans has a term of between 6 months and 4 years ... ... each of the smaller loans will be redeemed at term." That reads like the 6-term loan gets repaid (capital and interest) after 6 months. What if the loan fails afterwards? It is similar(ish) to a 4-year amortising loan, the difference being that the capital is repaid every 6 months rather than every month. If the loan fails, the potential losses should be less than with an interest only loan. It could be argued that the interest rate should decrease over time, as the capital is reduced and therefore the size of the potential loss is reduced. I'm not advocating for that! Sorry. Slow as usual I still don't get it. If I invest capital X into the N-month term loan I would expect (given the wording of the description) that I get the capital plus interest for N months back after N months (after which that loan is finished for me). Given the probability of failure accumulates over time, the larger N the higher the risk. Amortisation does not change that much, at least not early on. Or does each of the loans run over 4 years? (In which case the wording is quite misleading)
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archie
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Post by archie on Nov 29, 2018 14:26:15 GMT
Interest is paid monthly if received. Capital for each loan is repaid as per the term (one tranche every 6 months).
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Post by GSV3MIaC on Nov 29, 2018 14:28:06 GMT
Actually you get the interest, monthly, for N months, and then the slice of capital (your share of the £17500) back at the end of month N. So it's really a 6 month loan and a 12 month loan and a (repeat) ... all to the same company.
(crossed with archie)
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nyneil
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Post by nyneil on Nov 29, 2018 15:08:36 GMT
It is similar(ish) to a 4-year amortising loan, the difference being that the capital is repaid every 6 months rather than every month. If the loan fails, the potential losses should be less than with an interest only loan. It could be argued that the interest rate should decrease over time, as the capital is reduced and therefore the size of the potential loss is reduced. I'm not advocating for that! Sorry. Slow as usual I still don't get it. If I invest capital X into the N-month term loan I would expect (given the wording of the description) that I get the capital plus interest for N months back after N months (after which that loan is finished for me). Given the probability of failure accumulates over time, the larger N the higher the risk. Amortisation does not change that much, at least not early on. Or does each of the loans run over 4 years? (In which case the wording is quite misleading) As I understand it, the shop(s) are borrowing £140k and offering £280k of assets as security. Interest will be paid monthly. Each of the sub-loans is for £17.5k (adding up to a combined value of £140k). After 6 months, the first sub-loan ends, so 17.5k will be repaid to the lenders who were in the 6 month loan. Now, the shop will only owe 122.5k and only need to provide 245k of security, and so on until all the loan has been repaid. The only additional risk for longer term loans is the risk of default, for whatever reason. Hopefully this won't happen, but has more opportunity to happen over 4 years than over 6 months. Oops, it seems i took too long to write my comments, as others answered earlier. Hey ho.
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Post by df on Nov 29, 2018 16:06:51 GMT
I've put the maximum allowance in each. If there was no limit I would probably aim to invest £200 in 6-month segment and dismiss the rest.
Some time ago this type and size of loan would be gone in minutes. Now it is 4 hours since launch and 38% is still available.
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Post by ladywhitenap on Nov 29, 2018 16:23:44 GMT
I've only just seen this one. Was an email sent to inform us of forthcoming loan? This is the second one recently that I've only found out either here or by going onto the website. I'm begining to wonder if there is something wrong with the mailings?
LW
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archie
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Post by archie on Nov 29, 2018 16:26:24 GMT
I've only just seen this one. Was an email sent to inform us of forthcoming loan? This is the second one recently that I've only found out either here or by going onto the website. I'm beginning to wonder if there is something wrong with the mailings? LW Email was sent 28/11/18 15:18.
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n
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Yet another Nick
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Post by n on Nov 29, 2018 16:26:36 GMT
I've only just seen this one. Was an email sent to inform us of forthcoming loan? This is the second one recently that I've only found out either here or by going onto the website. I'm begining to wonder if there is something wrong with the mailings? LW Message received yesterday at 15:19
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Post by ladywhitenap on Nov 29, 2018 16:58:09 GMT
Thanks n & archieI will mail "thing control central"
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corto
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Post by corto on Nov 29, 2018 17:42:56 GMT
Thanks to all who responded to my naive questions
I see my points confirmed.
Every loan will repay capital and interest after it's respective term, ie 6, 12, 18 months etc.
This however does make the later loans more risky and therefore they should have a higher interest relative to the early ones.
It's basically the same argument why the Yield-curve should be monotonically increasing.
Whatever .. I can't see further ahead than a year or so. I'll only invest in the first few loans.
My risk, I believe, then is: Will there be other 12% loans in a year?
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