benaj
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Post by benaj on Dec 19, 2018 12:27:06 GMT
Lately, I have received interests (0.1%) from borrowers just 3 days after the loans started. I am happy to receive interest early but I fail to understand the incentives for borrowers repaying interest early without making repayment for capital.
Any thought?
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dh1
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Post by dh1 on Dec 19, 2018 19:36:17 GMT
I'm beginning to realise that Welendus is a "partial" black box p2p platform; note the other threads on loan allocations and this one benaj.
You get quite a lot of information - some of which is accessible easily and some not - on each loan but never a complete picture. By "complete" I don't mean anything personal to the borrower, just the facts. I analysed my earlier investments (another thread) to check that the 10% individual borrower exposure wasn't being exceeded. After much Excelling it proved not to be. The Excelling was necessitated by the black box bit.
Just looking at your example, the loan(s) on which you received interest probably did not actually start 3 days before; your investment in them probably did and happily gave you an "early" interest payment. The fact that you can't easily (or at all) tell is another example of black boxing.
All this may not be intentional by Welendus; they seem to have a very complex set up which means the presentation of information to investors isn't mature yet. If I was them I'd do some simplification.
Having said all this, I'm looking very carefully at the money I'm actually making on my investment - that is the crucial proof of the Welendus business model. Whilst it is early days, I'm seeing low returns even when they are boosted by PF paybacks. Those wil (probably) disappear in January. I'll be deciding whether to stick with these folks when I have (say) 6 months stable figures to look at.
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michaelc
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Post by michaelc on Dec 20, 2018 22:55:55 GMT
I'm beginning to realise that Welendus is a "partial" black box p2p platform; note the other threads on loan allocations and this one benaj .
You get quite a lot of information - some of which is accessible easily and some not - on each loan but never a complete picture. By "complete" I don't mean anything personal to the borrower, just the facts. I analysed my earlier investments (another thread) to check that the 10% individual borrower exposure wasn't being exceeded. After much Excelling it proved not to be. The Excelling was necessitated by the black box bit.
Just looking at your example, the loan(s) on which you received interest probably did not actually start 3 days before; your investment in them probably did and happily gave you an "early" interest payment. The fact that you can't easily (or at all) tell is another example of black boxing.
All this may not be intentional by Welendus; they seem to have a very complex set up which means the presentation of information to investors isn't mature yet. If I was them I'd do some simplification.
Having said all this, I'm looking very carefully at the money I'm actually making on my investment - that is the crucial proof of the Welendus business model. Whilst it is early days, I'm seeing low returns even when they are boosted by PF paybacks. Those wil (probably) disappear in January. I'll be deciding whether to stick with these folks when I have (say) 6 months stable figures to look at.
I hope you post up your analysis when that period is up. I've recently started to increase my investment in W but like you have a nagging doubt about the black box nature of loans. Perhaps another stupid question, but does anyone audit correlation between the website we see and the reality of the loanbook ? Should I be worried about these things? I'm not sure. There are a lot of things to like about W but the black box nature does mean I can't check much for myself. I can't, for example, pull up a loan and check the security at the land registry and search CH to find the borrower etc. I just know I've lend a few quid to an anonymous identifier. Didn't Zopa in the early days get round this by providing quite a lot of detail about borrowers (even if not enough to actually identify) ? It is all that that puts a low cap on what I'm prepared to risk there.
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benaj
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Post by benaj on Dec 22, 2018 6:52:36 GMT
After further learning on the platform, I am more relieved to know Welendus takes a very sensible approach to take the first payment from the borrowers as soon as possible. The date of the first repayment is related to the loan term. A 93 days loan will require the borrower to make first repayment after 3 days. 96 days loan will require the borrower to make first repayment after 6 days etc. There's still a lot to be learned in the blackbox.  |
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Ukmikk
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Post by Ukmikk on Dec 22, 2018 16:29:56 GMT
It is all that that puts a low cap on what I'm prepared to risk there. I think you are wise to tread cautiously. Although there is a lot to like about WLU and the model 'appears' to be holding up, it's still early days and the platform is less than transparent and unwilling to answer requests for more details eg. PF coverage and stress testing specifics.
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