pfp
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Post by pfp on Dec 5, 2013 7:22:31 GMT
OK - I'll bite. Following WestonKev's interventionon on a thread 'in another place', how is it that Ratesetter seem to be able to lend at significantly higher rates than their biggest competitor? Poorer risk clients? More efficient? Or what?
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oldgrumpy
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Post by oldgrumpy on Dec 5, 2013 8:29:20 GMT
Maybe they don't go all out for what Zopa calls A* risks at the rock bottom rate (top of the leagur tables for borrowers), so it gets a lower proportion of those. That means it gets a higher proportion of A risks and below, so yes, overall it might be slightly higher risk. That doesn't matter to me if "provision" (which RS has been running from the start) is as good as "safeguard". It wouldn't surprise me if 4/5 year on RS goes close to 6% in the next few days.
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duck
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Post by duck on Dec 5, 2013 18:28:48 GMT
Thanks for the explanation westonkev, I read the thread 'in the other place' and hoped the suggestion would be picked up  As an existing investor (with a decent 5 figure sum invested) I think it only fair to say that it is not only higher rates but also rate of reinvestment that has impressed me over the last 12 months. |
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Post by westonkevRS on Dec 5, 2013 18:38:04 GMT
I don't have the statistics, but I'm pretty sure if you're happy to reinvest at the market rate your money is lent and earning interest within 24 hours across any of the markets.
I might run some numbers to see how long you have to wait on average if you go say 0.1%, 0.2% etc above this market rate. But this might be misleading as it could depend on the trending direction....
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pfp
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Post by pfp on Dec 5, 2013 19:57:46 GMT
Thanks WestonKev for your detailed response.
Do I understand therefore that, for example, a three year loan may be made up with some funds from the one month and one year markets to help keep the rate down? Does this not potentially cause problems later in the loan term in maintaining the rate to the borrower? I may be missing something....
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