sl75
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Post by sl75 on Apr 25, 2019 14:57:37 GMT
Also, how often does capital & interest get paid on AC? For the underlying loans, capital & interest gets paid according to the individual loan repayment schedule, which can be seen by clicking on the loan details and selecting "repayments" tab (although payments can be delayed for up to a few days without penalty). This ad-hoc repayment frequency is seen in the "traditional" accounts where loans are individually bought and sold using transactions visible on your statement (MLA, GBBA, PSA). If the borrower fails to repay, and the loan is suspended from trading, you can wait indefinitely for the capital to be repaid with no possibility of withdrawing the relevant portion of cash in the interim (AC could, and IMHO should use any excess in the provision funds for GBBA/PSA/etc. to "buy back" at face value the longest overdue loans before they take any excess as a profit for themselves, but it's not clear if they would in fact do this).
For the "access accounts" you don't get capital or interest payments from the underlying loans. Instead the access account itself keeps all of these in a separate pool, which credits you with monthly interest (on the 1st of each month) calculated at the headline rate... whilst this is described as a "capped" rate, this is mainly to allow for the possibility that the performance of the underlying loans may not be sufficient to pay the headline rate of interest in a given month, rather than an indication that they expect to routinely pay any less than the headline rate - historically they have never paid anything less than this headline rate.
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number5
Member of DD Central
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Post by number5 on Apr 25, 2019 15:08:35 GMT
Also, how often does capital & interest get paid on AC? For the underlying loans, capital & interest gets paid according to the individual loan repayment schedule, which can be seen by clicking on the loan details and selecting "repayments" tab (although payments can be delayed for up to a few days without penalty). This ad-hoc repayment frequency is seen in the "traditional" accounts where loans are individually bought and sold using transactions visible on your statement (MLA, GBBA, PSA). If the borrower fails to repay, and the loan is suspended from trading, you can wait indefinitely for the capital to be repaid with no possibility of withdrawing the relevant portion of cash in the interim (AC could, and IMHO should use any excess in the provision funds for GBBA/PSA/etc. to "buy back" at face value the longest overdue loans before they take any excess as a profit for themselves, but it's not clear if they would in fact do this).
For the "access accounts" you don't get capital or interest payments from the underlying loans. Instead the access account itself keeps all of these in a separate pool, which credits you with monthly interest (on the 1st of each month) calculated at the headline rate... whilst this is described as a "capped" rate, this is mainly to allow for the possibility that the performance of the underlying loans may not be sufficient to pay the headline rate of interest in a given month, rather than an indication that they expect to routinely pay any less than the headline rate - historically they have never paid anything less than this headline rate.
Thanks for the detailed explanation, will take me a little while to get used to the terminology on AC. So on 1st May, I should expect some capital and interest repayment from my investment. How is interest accrued, is it daily?
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Post by df on Apr 25, 2019 15:10:05 GMT
Yes, I'm doing this with 30-day since it was launched. I have a small amount arriving to my cash account every morning, then I use it either to invest in new loans (MLA) or put it back into 30-day. Now I've started the same with 90-day. I have just started investing on AC. Gone straight into the 90 day account. Once I have set this up, will try do something similar for 30 day (unless something better comes along!). Are you depositing cash every morning to your cash account? How do you select where to invest in MLA, I haven't ventured there as yet? Also, how often does capital & interest get paid on AC? 1. No, I've deposited once and use this money within AC accounts. I've made a couple of small withdrawals at the beginning of January, but apart from that I don't increase or reduce my AC pot. 2. My strategy with MLA is very simple. I don't have enough time and expertise to study each loan and forecast whether it is going to be repaid as scheduled. So I invest a small amount in everything 7% and above (or smaller rates with discounts). When the loan reaches 3 months before its maturity I put it on sale. The downside is, I obviously get caught on loans that collapse earlier, but that's part of the risk I'm taking by investing on MLA. So far it works fine, vast bulk of my non-performing AC money are stuck in GEA and GBBA (can't do anything about it). 3. If you use access accounts you get interest paid monthly on 1st, capital - whenever you request it. On MLA the pattern depends on the loan (amortising or bullet) and on borrowers repayments (some of them are consistently late).
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Post by df on Apr 25, 2019 15:17:14 GMT
For the underlying loans, capital & interest gets paid according to the individual loan repayment schedule, which can be seen by clicking on the loan details and selecting "repayments" tab (although payments can be delayed for up to a few days without penalty). This ad-hoc repayment frequency is seen in the "traditional" accounts where loans are individually bought and sold using transactions visible on your statement (MLA, GBBA, PSA). If the borrower fails to repay, and the loan is suspended from trading, you can wait indefinitely for the capital to be repaid with no possibility of withdrawing the relevant portion of cash in the interim (AC could, and IMHO should use any excess in the provision funds for GBBA/PSA/etc. to "buy back" at face value the longest overdue loans before they take any excess as a profit for themselves, but it's not clear if they would in fact do this).
For the "access accounts" you don't get capital or interest payments from the underlying loans. Instead the access account itself keeps all of these in a separate pool, which credits you with monthly interest (on the 1st of each month) calculated at the headline rate... whilst this is described as a "capped" rate, this is mainly to allow for the possibility that the performance of the underlying loans may not be sufficient to pay the headline rate of interest in a given month, rather than an indication that they expect to routinely pay any less than the headline rate - historically they have never paid anything less than this headline rate.
Thanks for the detailed explanation, will take me a little while to get used to the terminology on AC. So on 1st May, I should expect some capital and interest repayment from my investment. How is interest accrued, is it daily? Yes, you should get your interest on 1st May. IIRC interest is accrued every second on access accounts.
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Post by hammertime on Apr 25, 2019 15:20:04 GMT
This will be difficult for you if you have this mindset you will be better with a bank.
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number5
Member of DD Central
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Post by number5 on Apr 25, 2019 15:34:44 GMT
I have just started investing on AC. Gone straight into the 90 day account. Once I have set this up, will try do something similar for 30 day (unless something better comes along!). Are you depositing cash every morning to your cash account? How do you select where to invest in MLA, I haven't ventured there as yet? Also, how often does capital & interest get paid on AC? 1. No, I've deposited once and use this money within AC accounts. I've made a couple of small withdrawals at the beginning of January, but apart from that I don't increase or reduce my AC pot. 2. My strategy with MLA is very simple. I don't have enough time and expertise to study each loan and forecast whether it is going to be repaid as scheduled. So I invest a small amount in everything 7% and above (or smaller rates with discounts). When the loan reaches 3 months before its maturity I put it on sale. The downside is, I obviously get caught on loans that collapse earlier, but that's part of the risk I'm taking by investing on MLA. So far it works fine, vast bulk of my non-performing AC money are stuck in GEA and GBBA (can't do anything about it). 3. If you use access accounts you get interest paid monthly on 1st, capital - whenever you request it. On MLA the pattern depends on the loan (amortising or bullet) and on borrowers repayments (some of them are consistently late). I think for now I am going to stick to building my 90 day account into a rolling system. Not sure where else to go...AC interest rates are lower than I was aiming for.At the moment my cash drag from FS is growing day by day. WLU seems to have slowed right down with it's matching, which looked so promising before the new FY.
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Post by Ton ⓉⓞⓃ on Apr 25, 2019 15:44:44 GMT
Yes, and AC have said in another thread awhile back that they're aware that some of their AA a/c Users request withdrawals then cancel, I took it to mean that no action against it yet but might do if it gets out of hand.
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number5
Member of DD Central
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Post by number5 on Apr 25, 2019 16:01:25 GMT
Yes, and AC have said in another thread awhile back that they're aware that some of their AA a/c Users request withdrawals then cancel, I took it to mean that no action against it yet but might do if it gets out of hand. At which point I don't think this account would work for me anymore....also I assume they would have to give 90 days notice
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Post by hammertime on Apr 25, 2019 16:05:51 GMT
Spread your money some in mla gbba 30 daa 90 daa
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Post by df on Apr 25, 2019 16:18:30 GMT
1. No, I've deposited once and use this money within AC accounts. I've made a couple of small withdrawals at the beginning of January, but apart from that I don't increase or reduce my AC pot. 2. My strategy with MLA is very simple. I don't have enough time and expertise to study each loan and forecast whether it is going to be repaid as scheduled. So I invest a small amount in everything 7% and above (or smaller rates with discounts). When the loan reaches 3 months before its maturity I put it on sale. The downside is, I obviously get caught on loans that collapse earlier, but that's part of the risk I'm taking by investing on MLA. So far it works fine, vast bulk of my non-performing AC money are stuck in GEA and GBBA (can't do anything about it). 3. If you use access accounts you get interest paid monthly on 1st, capital - whenever you request it. On MLA the pattern depends on the loan (amortising or bullet) and on borrowers repayments (some of them are consistently late). I think for now I am going to stick to building my 90 day account into a rolling system. Not sure where else to go...AC interest rates are lower than I was aiming for.At the moment my cash drag from FS is growing day by day. WLU seems to have slowed right down with it's matching, which looked so promising before the new FY. Yes, this is far more convenient than using MLA. May be slightly smaller return, but it is stable, with less risk and much less work. As for WLU, I don't think it is a good time for investing new money. It looks like there's oversupply of cash and until it's more or less balanced it's better to use your FS idle funds elsewhere. AC is the obvious choice for liquidity, there are others, but none of them will pay interest as high as WLU.
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number5
Member of DD Central
Posts: 449
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Post by number5 on Apr 25, 2019 17:17:36 GMT
I think for now I am going to stick to building my 90 day account into a rolling system. Not sure where else to go...AC interest rates are lower than I was aiming for.At the moment my cash drag from FS is growing day by day. WLU seems to have slowed right down with it's matching, which looked so promising before the new FY. Yes, this is far more convenient than using MLA. May be slightly smaller return, but it is stable, with less risk and much less work. As for WLU, I don't think it is a good time for investing new money. It looks like there's oversupply of cash and until it's more or less balanced it's better to use your FS idle funds elsewhere. AC is the obvious choice for liquidity, there are others, but none of them will pay interest as high as WLU. Yea, I have stopped putting funds in to WLU, which is rather annoying because I opened my IFISA on there and now I can't add any more funds there or open an IFISA with AC for this years allowance. AC is the one I have turned to, due to it's ease and liquidity but the 5.75% is quite lower than I would like. In the current state I would prefer around the 8% mark, if there was anywhere you can recommend (with liquidity)?
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Post by df on Apr 25, 2019 18:46:26 GMT
Yes, this is far more convenient than using MLA. May be slightly smaller return, but it is stable, with less risk and much less work. As for WLU, I don't think it is a good time for investing new money. It looks like there's oversupply of cash and until it's more or less balanced it's better to use your FS idle funds elsewhere. AC is the obvious choice for liquidity, there are others, but none of them will pay interest as high as WLU. Yea, I have stopped putting funds in to WLU, which is rather annoying because I opened my IFISA on there and now I can't add any more funds there or open an IFISA with AC for this years allowance. AC is the one I have turned to, due to it's ease and liquidity but the 5.75% is quite lower than I would like. In the current state I would prefer around the 8% mark, if there was anywhere you can recommend (with liquidity)? You never know, WLU may get back to normal later in financial year and you'll be able to add to your IFISA???, but I think it was a little premature to open IFISA with relatively new platform that has very little record on stability of investment pattern. Two with around 8% and decent diversification mark spring to mind. LC. My historical return after 25 months of investing is 8%, which is quite good, but this figure has decreased from what it was a year ago and will decrease more with upcoming defaults. Not sure about liquidity. In my experience selling a loan part takes 1 or 2 days, but other people struggled for months to sell their parts. You also pay 0.5% fee for selling. The other downside is - you can't achieve well diversified portfolio at your desired rate if you want to invest instantly (you don't get the same rates on SM as you would on PM) so you'll need to build your portfolio slowly. UB. You can achieve approx. 8%, but the investment is slow and there is no SM, so you'll have to wait 6 months to get you money from each loan back. I think you have to accept that generally speaking you have to settle with lower rates for convenience of short term and relatively low risk investments.
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number5
Member of DD Central
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Post by number5 on Apr 25, 2019 19:08:37 GMT
Yea, I have stopped putting funds in to WLU, which is rather annoying because I opened my IFISA on there and now I can't add any more funds there or open an IFISA with AC for this years allowance. AC is the one I have turned to, due to it's ease and liquidity but the 5.75% is quite lower than I would like. In the current state I would prefer around the 8% mark, if there was anywhere you can recommend (with liquidity)? You never know, WLU may get back to normal later in financial year and you'll be able to add to your IFISA???, but I think it was a little premature to open IFISA with relatively new platform that has very little record on stability of investment pattern. Two with around 8% and decent diversification mark spring to mind. LC. My historical return after 25 months of investing is 8%, which is quite good, but this figure has decreased from what it was a year ago and will decrease more with upcoming defaults. Not sure about liquidity. In my experience selling a loan part takes 1 or 2 days, but other people struggled for months to sell their parts. You also pay 0.5% fee for selling. The other downside is - you can't achieve well diversified portfolio at your desired rate if you want to invest instantly (you don't get the same rates on SM as you would on PM) so you'll need to build your portfolio slowly. UB. You can achieve approx. 8%, but the investment is slow and there is no SM, so you'll have to wait 6 months to get you money from each loan back. I think you have to accept that generally speaking you have to settle with lower rates for convenience of short term and relatively low risk investments. Tbh I do think after the initial burst of the new ISA allowance is over, WLU will go back to the way it was just before. I have just widened all of my investments 5-15% today. LC and UB don't really sound ideal to what I am looking for. Seems like I will have to settle for around the 6% mark. Do you recommend any other apart from AC of this type?
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Post by df on Apr 25, 2019 19:46:45 GMT
You never know, WLU may get back to normal later in financial year and you'll be able to add to your IFISA???, but I think it was a little premature to open IFISA with relatively new platform that has very little record on stability of investment pattern. Two with around 8% and decent diversification mark spring to mind. LC. My historical return after 25 months of investing is 8%, which is quite good, but this figure has decreased from what it was a year ago and will decrease more with upcoming defaults. Not sure about liquidity. In my experience selling a loan part takes 1 or 2 days, but other people struggled for months to sell their parts. You also pay 0.5% fee for selling. The other downside is - you can't achieve well diversified portfolio at your desired rate if you want to invest instantly (you don't get the same rates on SM as you would on PM) so you'll need to build your portfolio slowly. UB. You can achieve approx. 8%, but the investment is slow and there is no SM, so you'll have to wait 6 months to get you money from each loan back. I think you have to accept that generally speaking you have to settle with lower rates for convenience of short term and relatively low risk investments. Tbh I do think after the initial burst of the new ISA allowance is over, WLU will go back to the way it was just before. I have just widened all of my investments 5-15% today. LC and UB don't really sound ideal to what I am looking for. Seems like I will have to settle for around the 6% mark. Do you recommend any other apart from AC of this type? LW pays 6.5% (5-year product). Cash drag for new money varies from 7 to 30 days (don't know the current situation, you can ask on LW board), but reinvestments are quicker as they have priority). I've never sold on LW, but I'd imagine it's instant, however there's 0.6% fee for selling. One of the lower risk p2p platforms - LW is 5 years old and no investor lost any money yet.
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number5
Member of DD Central
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Post by number5 on Apr 25, 2019 20:22:53 GMT
Tbh I do think after the initial burst of the new ISA allowance is over, WLU will go back to the way it was just before. I have just widened all of my investments 5-15% today. LC and UB don't really sound ideal to what I am looking for. Seems like I will have to settle for around the 6% mark. Do you recommend any other apart from AC of this type? LW pays 6.5% (5-year product). Cash drag for new money varies from 7 to 30 days (don't know the current situation, you can ask on LW board), but reinvestments are quicker as they have priority). I've never sold on LW, but I'd imagine it's instant, however there's 0.6% fee for selling. One of the lower risk p2p platforms - LW is 5 years old and no investor lost any money yet. It was between LW and AC...if you took in the 0.6% selling fee, that made the return 5.9% (if I am calculating it right). Add in the cash drag I read about on LW, this made AC seem more or equally attractive
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