zlb
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Post by zlb on Jul 26, 2019 12:31:17 GMT
Email: "We are pleased to announce the release of new loan categories including consumer medium-term, business short-term and business medium-term loans.
The new loans types are now available to all investments for a more diversified investment portfolio, quicker deployment within a wider market and ultimately, better return on investment.
All new loans will be at the 5% to 15% return p.a. levels with AutoMatch™ enabled to automatically match investments with the matching borrowers at your pre-set investment return."
They haven't said what type of business loans at all. Secured? Unsecured?
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Ukmikk
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Post by Ukmikk on Jul 26, 2019 12:43:56 GMT
I think assume unsecured.
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markyg61
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Post by markyg61 on Jul 26, 2019 14:01:58 GMT
Just checked what's left of my investments and noticed 3 new loans today. Bit confused though as two list at 5% and Medium-Term Loan and the 3rd new one lists at 7.5%. Drill down into the agreement page via "Show Loan Agreement" for ANY of them and they all show the following:
3.1 Loan Amount – £80000
3.2 Loan Term – 1827 days
3.3 Interest Rate – 12%
3.4 Total amount repayable – £128000
3.5 APR – 22.26%
* and just to add, I had no prior email informing me about these new types of loan
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Post by df on Jul 27, 2019 21:06:51 GMT
Email: "We are pleased to announce the release of new loan categories including consumer medium-term, business short-term and business medium-term loans.
The new loans types are now available to all investments for a more diversified investment portfolio, quicker deployment within a wider market and ultimately, better return on investment.
All new loans will be at the 5% to 15% return p.a. levels with AutoMatch™ enabled to automatically match investments with the matching borrowers at your pre-set investment return."
They haven't said what type of business loans at all. Secured? Unsecured? It shouldn't matter if they are covered by PF in the same way as consumer loans. You can also opt out from business loans, which is a good feature for those who unsure.
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Post by df on Jul 27, 2019 21:42:55 GMT
Just checked what's left of my investments and noticed 3 new loans today. Bit confused though as two list at 5% and Medium-Term Loan and the 3rd new one lists at 7.5%. Drill down into the agreement page via "Show Loan Agreement" for ANY of them and they all show the following:
3.1 Loan Amount – £80000
3.2 Loan Term – 1827 days
3.3 Interest Rate – 12%
3.4 Total amount repayable – £128000
3.5 APR – 22.26%
* and just to add, I had no prior email informing me about these new types of loan
That's a lot of days. If 5 year is a medium term, what would be a long term? I've never seen anything longer than 61 months on p2p platforms. In any case, it looks like FO is trying to get a slice of "Rebs/LC" pie. It is weird that the loan is split at different rates to lenders.
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paulb
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Post by paulb on Jul 27, 2019 21:51:23 GMT
Just checked what's left of my investments and noticed 3 new loans today. Bit confused though as two list at 5% and Medium-Term Loan and the 3rd new one lists at 7.5%. Drill down into the agreement page via "Show Loan Agreement" for ANY of them and they all show the following:
3.1 Loan Amount – £80000
3.2 Loan Term – 1827 days
3.3 Interest Rate – 12%
3.4 Total amount repayable – £128000
3.5 APR – 22.26%
It looks like I'm in an identical loan (if not the same), and one other fairly similar (for £75k, though apparently to the same borrower according to their unique reference number). The figures don't really add up though - whilst the total amount payable matches that expected using the loan term and APR and assuming a monthly interest+capital repayment, the interest rate is 60%, not 12% (for other loans, the "interest rate" is the total interest paid, not an annual interest, and it's made clear further down the terms that this is a total, rather than annual, amount: "The Borrower will pay 12% interest on the Loan"). It looks to me as though the 60% total interest has been divided by 5 (the number of years of the loan) to give 12%. It looks then like that 12% has been further divided by 5 to give the 2.4% investor return quoted in the agreement. What is slightly more concerning though is that the contribution to the PF is given at 0%, though the agreement does contain the usual terms for the PF - even giving the option to reclassify the term to 12 months, which makes sense on a 3/4 month loan, but not a 5 year one. Further, it appears the same loans are being made at different rates - apparently at the lowest rate the investment is set to lend out at. This isn't how it's worked previously (nor how the AutoMatch is described) - the interest was determined by the risk of default - a riskier loan would pay a higher rate of interest, even if an investment would match to a lower-paying loan. I'm now getting paid 7% interest on an (at least) 11.5% risk-of-default loan. I'm happy to see that some of my money has finally been lent out, though I do have concerns, especially with the 0% contribution to the PF shown in the loan agreement. Paul.
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paulb
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Post by paulb on Jul 27, 2019 22:04:53 GMT
It shouldn't matter if they are covered by PF in the same way as consumer loans. You can also opt out from business loans, which is a good feature for those who unsure. Are they covered in the same way, or as well, though? Two loans (apparently to the same borrower) were made yesterday totalling over £150k - this is 10% of the entire loan book for 2018 - if this borrow defaults in the near future, how would the PF cope? That's even assuming the borrower is even contributing to the PF - the loan agreement states they're not. Whilst it it possible to opt out of business loans, you'd have to have been very quick to do so - the email announcing them was sent out only 5 minutes before the first one was made. Paul.
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paulb
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Post by paulb on Jul 27, 2019 22:05:35 GMT
They haven't said what type of business loans at all. Secured? Unsecured? According to the loan agreement, they are explicitly unsecured.
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Post by nooneere on Jul 28, 2019 19:43:53 GMT
Are they covered in the same way, or as well, though? Two loans (apparently to the same borrower) were made yesterday totalling over £150k - this is 10% of the entire loan book for 2018 - if this borrow defaults in the near future, how would the PF cope? That's even assuming the borrower is even contributing to the PF - the loan agreement states they're not. Whilst it it possible to opt out of business loans, you'd have to have been very quick to do so - the email announcing them was sent out only 5 minutes before the first one was made. Paul. I pulled out of WLU (as it was) in May during the loan drought, and have been watching to see if business restarted. This new development puts me off completely and it's goodbye from me. I have had enough of this type of loan in FC and do NOT want more from a company without even FC's experience. My reading of the WLU->FO history is that their core mission is floundering. They had to make too many calls on the PF in 2019 so decided to tighten up their credit assessments (hence the loans stalling), and improve marketing image to attract better borrowers. At the same time they had a surfeit of lenders' funds because of the ill-timed introduction of an IFISA. This maladroit diversification indicates they are finding the payday loans market too difficult.
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paulb
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Post by paulb on Jul 29, 2019 8:08:11 GMT
As has been pointed out elsewhere, the new loan types are optional, though it appears existing funds were opted-in. Hopefully the presence of the new types of loans will soak up some of the surplus investments meaning those who want short-term consumer loans might find more than a few scraps left over.
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zlb
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Post by zlb on Jul 29, 2019 9:34:50 GMT
I just wonder whether they are picking up the SME borrowing that other platforms won't touch. to launch a product without giving a risk document with it appears to be a bit off.
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Ukmikk
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Post by Ukmikk on Jul 29, 2019 13:36:59 GMT
This is a complete dogs dinner in my opinion. Not enough information about the new products, almost impossible to work out what's going on from the complicated mess of a website, confusing agreements, and worst of all, opting us IN to the new loan types without permission. I have opted out of the new products at least until we have more information about them. I am trying not to overreact but am seriously now considering a complete withdrawal from this platform while I (hopefully) still can. My confidence has been severely shaken.
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markyg61
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Post by markyg61 on Jul 29, 2019 14:59:53 GMT
I had 3x remaining investments. I decided to withdraw the youngest of them.
Transfer / Withdraw Request Details
Request made 29/07/2019
Estimated Withdraw 26/07/2024
Hmmm, slightly worrying Withdraw date.....2024 !!!
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paulb
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Post by paulb on Jul 29, 2019 15:07:40 GMT
markyg61 , it sounds to me as though you've picked up some of the new "medium term" loans, and that date is based upon the assumption that you need to wait for this loan to complete before you can withdraw the final lump of your investment. I'd guess that this doesn't need to happen, and the loans should sell quickly on the SM - my understanding is that this should happen automatically, but it might be worth trying to manually sell any of these. My recollection though, is that the SM-selling took place before the estimated date was calculated - let's hope this isn't something else which is different about these new loan types.
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markyg61
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Post by markyg61 on Jul 29, 2019 15:27:47 GMT
markyg61 , it sounds to me as though you've picked up some of the new "medium term" loans, and that date is based upon the assumption that you need to wait for this loan to complete before you can withdraw the final lump of your investment. I'd guess that this doesn't need to happen, and the loans should sell quickly on the SM - my understanding is that this should happen automatically, but it might be worth trying to manually sell any of these. My recollection though, is that the SM-selling took place before the estimated date was calculated - let's hope this isn't something else which is different about these new loan types.
Once you've decided to hit the "withdraw" an "investment" you cannot sell any of the loans in that investment on the SM. I assume that is happening in the background now.
Perhaps it would have been better to try and sell the loans on the SM first before withdrawing. I dont know.
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