benaj
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Post by benaj on Jan 27, 2020 9:16:35 GMT
Average Interest shortfall changes regularly.
Last week, it was 4.3% to sell the remaining loans.
Now it's 5.4%. 27th Jan 2020
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r00lish67
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Post by r00lish67 on Jan 27, 2020 9:36:44 GMT
Interest shortfall changes regularly. Last week, it was 4.3% to sell the remaining loans. Now it's 5.4%. 27th Jan 2020 Interesting. I wonder what a brand new growth investor's fees would be? They should literally be just the 0.5% I suppose in theory, but in reality?
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Post by jono75 on Jan 27, 2020 17:02:31 GMT
I first invested after the changes and at 5.4%, to get out I am being charged £11.93 shortfall out of £1,787.30 (0.67%) available, plus .5% fee. The rest stuck is in unsellable loans that I got when I first invested (I thought that was against the rules now?)
It's not zero shortfall like I imagine it should be, but not as bad as older investors! Is there anywhere you can find the actual calculation?
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benaj
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Post by benaj on Jan 27, 2020 17:09:45 GMT
Is there anywhere you can find the actual calculation? It's all depends on your "current loan performance". Depending the origination of cohort, if they perform like real 5.4% loans, i.e. your monthly interest, it should be 0% shortfall. If it perform like 0%, it could be 5.4%. Ace reported a shortfall of 6.5% for his remaining 11% of investment, it would be interest to see the performance of his remaining loans. The big question is? how big can this shortfall be? can it be higher than the borrower rate, average 12.9% APR? I really hope someone from LW could clarify this, Matthew ?
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Post by Ace on Jan 27, 2020 17:39:54 GMT
Is there anywhere you can find the actual calculation? It's all depends on your "current loan performance". Depending the origination of cohort, if they perform like real 5.4% loans, i.e. your monthly interest, it should be 0% shortfall. If it perform like 0%, it could be 5.4%. Ace reported a shortfall of 6.5% for his remaining 11% of investment, it would be interest to see the performance of his remaining loans. The big question is? how big can this shortfall be? can it be higher than the borrower rate, average 12.9% APR? I really hope someone from LW could clarify this, Matthew ? Yep, just rechecked now. 26.5% unsellable. To sell the remaining 73.5% would cost a 0.5% transaction fee plus a 6.5% shortfall fee. Hitting "View Loans" shows a forecast of 4.9% for my 2019 cohort and 5.4% for my 2018 cohort. No way of knowing the size of each cohort in this once very useful, but now useless interface, so these stats are also useless. I've now lost my patience with this platform and have switched off relending.
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 17:56:43 GMT
It's all depends on your "current loan performance". Depending the origination of cohort, if they perform like real 5.4% loans, i.e. your monthly interest, it should be 0% shortfall. If it perform like 0%, it could be 5.4%. Ace reported a shortfall of 6.5% for his remaining 11% of investment, it would be interest to see the performance of his remaining loans. The big question is? how big can this shortfall be? can it be higher than the borrower rate, average 12.9% APR? I really hope someone from LW could clarify this, Matthew ? Yep, just rechecked now. 26.5% unsellable. To sell the remaining 73.5% would cost a 0.5% transaction fee plus a 6.5% shortfall fee. Hitting "View Loans" shows a forest of 4.9% for my 2019 cohort and 5.4% for my 2018 cohort. No way of knowing the size of each cohort in this once very useful, but now useless interface, so these stats are also useless. I've now lost my patience with this platform and have switched off relending. I'm drawing down too. It's the element of seemingly deliberate opacity that grates.
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 18:05:29 GMT
90.4% of my loans are sellable with a 5.24% interest rate shortfall on potential sale
My current XIRR (albeit for a short period ~ 1 week, more reliable figures will take a month or so): 0.63% - very much in keeping with the above.
Massive interest rate haircut which was spun as merely a reduction in rates from 6.5% to 5.4%.
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Post by carol167 on Jan 27, 2020 18:58:23 GMT
So... we were basically lied to about getting 6.5 for the duration of the loans for all the months and months that that was the supposed rate on offer. Thus falsely encouraging peope to sign up to LW.
We've (well I've) been entirely misled into thinking that we would now only get 5.4% going forward for the rest of the loan terms...
and the reality is that in order to take away the extra between 6.5 and 5.4 that we've already had for the loans that have already paid out interest, we are now going to get barely any interest at all for the foreseable future.
Is that pretty much the long and short of it ??
[Edit to add : Oh and to cap it all - now that we've realised this - we get stung left right and centre if we want to cash out.]
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 19:03:56 GMT
So... we were basically lied to about getting 6.5 for the duration of the loans for all the months and months that that was the supposed rate on offer. Thus falsely encouraging peope to sign up to LW.
We've (well I've) been entirely misled into thinking that we would now only get 5.4% going forward for the rest of the loan terms...
and the reality is that in order to take away the extra between 6.5 and 5.4 that we've already had for the loans that have already paid out interest, we are now going to get barely any interest at all for the foreseable future.
Is that pretty much the long and short of it ??
That's my reading between the lines - yet to be contradicted by LW
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 19:09:41 GMT
It raises the question: is it better to take a 6% fee and sell now, on the basis that one can invest elsewhere and recoup more than that, or leave it where it is earning derisory rates <1% and hope that the loan cohorts recover?
And what do these shenanigans mean for the platform's future stability?
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blink
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Post by blink on Jan 27, 2020 19:10:33 GMT
Just looked at my account based on all the above comments. Mine does not make for happy reading. However I was prepared (when I was thinking of transferring my ISA account to switch of reinvestment and let the money build up. I know I would be losing some interest, but I think that should be my choice. I have just looked and I am unable to do that, as all the drawdown repayments (capital and interest) would automatically go to my bank account. This is the same for the setting of withdrawal of interest only. If I do this I would lose the ISA status. That would only leave the options of selling my loans, thus incurring the sale shortages of interest, fees etc. It appears there is no way to do a managed withdrawal and ISA transfer Matthew Please can you confirm if what I am describing is correct. If that is the case, it leads me to not placing any more funds in LW as I feel I am being forced to do something I may not want @ Matthew |
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 19:14:13 GMT
Just looked at my account based on all the above comments. Mine does not make for happy reading. However I was prepared (when I was thinking of transferring my ISA account to switch of reinvestment and let the money build up. I know I would be losing some interest, but I think that should be my choice. I have just looked and I am unable to do that, as all the drawdown repayments (capital and interest) would automatically go to my bank account. This is the same for the setting of withdrawal of interest only. If I do this I would lose the ISA status. That would only leave the options of selling my loans, thus incurring the sale shortages of interest, fees etc. It appears there is no way to do a managed withdrawal and ISA transfer Matthew Please can you confirm if what I am describing is correct. If that is the case, it leads me to not placing any more funds in LW as I feel I am being forced to do something I may not want @ Matthew I have an ISA, have turned off relending and it just builds up as cash in the wallet until I make a transfer out request. it is possible - look under "Lending settings".
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IFISAcava
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Post by IFISAcava on Jan 27, 2020 19:17:48 GMT
And don't forget that the Flexible option doesn't incur an interest rate shortfall payment. At the moment at least.
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Post by carol167 on Jan 27, 2020 19:20:35 GMT
Just looked at my account based on all the above comments. Mine does not make for happy reading. However I was prepared (when I was thinking of transferring my ISA account to switch of reinvestment and let the money build up. I know I would be losing some interest, but I think that should be my choice. I have just looked and I am unable to do that, as all the drawdown repayments (capital and interest) would automatically go to my bank account. This is the same for the setting of withdrawal of interest only. If I do this I would lose the ISA status. That would only leave the options of selling my loans, thus incurring the sale shortages of interest, fees etc. It appears there is no way to do a managed withdrawal and ISA transfer Matthew Please can you confirm if what I am describing is correct. If that is the case, it leads me to not placing any more funds in LW as I feel I am being forced to do something I may not want @ Matthew
Yes there is because I am doing just that. I have been letting all ISA GROWTH repayments get auto relent on the Flexible option to build up a decent amount, and have just stopped relending and asked to sell 4k from the Flexible.
Meanwhile I'm filling out a transfer form from my share company to lending works for the 4k. Once that's done, I will turn relending back on in Flexible so it can build up again as the main bulk of Growth drawsdown.
I've already done this once as a test proof a month or so ago for 2k's worth.
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Post by Matthew on Jan 27, 2020 19:22:20 GMT
Just looked at my account based on all the above comments. Mine does not make for happy reading. However I was prepared (when I was thinking of transferring my ISA account to switch of reinvestment and let the money build up. I know I would be losing some interest, but I think that should be my choice. I have just looked and I am unable to do that, as all the drawdown repayments (capital and interest) would automatically go to my bank account. This is the same for the setting of withdrawal of interest only. If I do this I would lose the ISA status. That would only leave the options of selling my loans, thus incurring the sale shortages of interest, fees etc. It appears there is no way to do a managed withdrawal and ISA transfer Matthew Please can you confirm if what I am describing is correct. If that is the case, it leads me to not placing any more funds in LW as I feel I am being forced to do something I may not want @ Matthew Hi blinkYou're able to let money build up in your wallet by selecting "Invest my money: Manually" and "Repayments from borrowers: Keep repayments in my wallet (manual investment)" from your lending settings. Hope this helps. Just taking a look through this thread now and will address the various points raised shortly.
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