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Post by Ace on Aug 25, 2022 22:18:48 GMT
I'm happy to have a small investment with Elfin which I've been slowly increasing, but only because the actual returns so far are way above their advertised target returns. My XIRR is currently 8.43% Their stated target return for a completely unsecured 6 month loan is a rate of only 3.8%. That's way too low compared to the likes of Loanpad who offer 4.2% for a 60 day notice account with (IMO) the best security of all platforms. I also find Elfin to still be overly opaque. The only small hint I can find regarding loan performance is via my once per year tax statement, and that has to be requested via email. I'm happy with small investment too. I'm not increasing and even thinking of decreasing. Nothing wrong with the platform, just a bit of fear about recession that can bring higher default rates to unsecured consumer lending. Can't really decide whether to reinvest or withdraw my next return. My XIRR is 6.19% (1st investment 15th Feb 2021). Significantly lower than yours as usual . Most of the gap is probably due to an extra cash drag (loosing about 4 weeks interest per year for 6 month option). I like the fact that their returns are significantly higher than advertised, this adds to confidence. Some time ago I've looked at EM on fb, I liked what I've seen there. I think it's a good product, innovative and inclusive. I hope it will survive through upcoming crisis. I started almost exactly a year before you. I've had 3 shorter investments complete, I think they were 1 year but not absolutely sure. My current 8 investments are all 3 years. I decided that I might as well take the higher rate for longer investments and take the chance that I'll be able to cash in early if I wanted to. Others have reported that this worked for them. I expect that's the reason for my higher XIRR as there's no other way to influence it. Oh, and I have a very small extra monthly payment due to being a minor equity investor, but this only equates to about 2% of my monthly interest payment now.
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Post by df on Aug 28, 2022 0:18:56 GMT
I'm happy with small investment too. I'm not increasing and even thinking of decreasing. Nothing wrong with the platform, just a bit of fear about recession that can bring higher default rates to unsecured consumer lending. Can't really decide whether to reinvest or withdraw my next return. My XIRR is 6.19% (1st investment 15th Feb 2021). Significantly lower than yours as usual . Most of the gap is probably due to an extra cash drag (loosing about 4 weeks interest per year for 6 month option). I like the fact that their returns are significantly higher than advertised, this adds to confidence. Some time ago I've looked at EM on fb, I liked what I've seen there. I think it's a good product, innovative and inclusive. I hope it will survive through upcoming crisis. I started almost exactly a year before you. I've had 3 shorter investments complete, I think they were 1 year but not absolutely sure. My current 8 investments are all 3 years. I decided that I might as well take the higher rate for longer investments and take the chance that I'll be able to cash in early if I wanted to. Others have reported that this worked for them. I expect that's the reason for my higher XIRR as there's no other way to influence it. Oh, and I have a very small extra monthly payment due to being a minor equity investor, but this only equates to about 2% of my monthly interest payment now. I was wrong about my XIRR. The figure I reported is 6 weeks old, I calculated it when reinvested my last return. I normally update my XIRRs only when I withdraw or deposit (or reinvest on EM). My current XIRR is 6.51%, so the gap is somewhat smaller . My AER displayed on dashboard is 6.5% - I like that there's no contradiction, on some other platforms these two figures are slightly apart from each other. I'm sure I've read all FAQs before signing up, but completely forgot about early withdrawals option, which probably was one of the most important features in making decision to sign up. Forgot about it because never felt an urge to make an early withdrawal. Thank you for reminding!
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firedog
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Post by firedog on Sept 30, 2022 7:12:30 GMT
I see that from 29 October, Elfin Market is increasing the interest rates charged to its borrowers (9.8% from 5.8% today). It's also putting up its servicing fee from 1.5% to 2.5% (a result of 'higher operational costs', including higher borrower acquisition costs as a result of tighter lending criteria). There's an expected boost to lenders' returns:1.5% to 2% higher than they were before the rates increase.
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Post by Ace on Sept 30, 2022 7:40:50 GMT
I see that from 29 October, Elfin Market is increasing the interest rates charged to its borrowers (9.8% from 5.8% today). It's also putting up its servicing fee from 1.5% to 2.5% (a result of 'higher operational costs', including higher borrower acquisition costs as a result of tighter lending criteria). There's an expected boost to lenders' returns:1.5% to 2% higher than they were before the rates increase. Just thought I'd add the old and new target returns for lenders as I found them tricky to find. The increases actual appear to be between 1.7% and 1.8%: 6 month term increases from 3.8% to 5.5% 1 year term increases from 4.3% to 6.1% 2 year term increases from 5.0% to 6.8% 3 year term increases from 5.8% to 7.5% It should be noted that these are Target Returns, which Elfin define as: " Interest rates are shown annualised, pre-tax, assume repayments are reinvested and borrower defaults follow expected rates. Projected rates are not guaranteed. Past performance and forecasts are not a reliable indicator of future performance." I've been investing with them in a very small way for 2 years and 8 months now and my returns have always been significantly above their stated target returns. My XIRR is currently 8.51%. EDIT: I should add that the vast majority of my investments are for the 3 year term.
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Post by df on Sept 30, 2022 20:37:19 GMT
I see that from 29 October, Elfin Market is increasing the interest rates charged to its borrowers (9.8% from 5.8% today). It's also putting up its servicing fee from 1.5% to 2.5% (a result of 'higher operational costs', including higher borrower acquisition costs as a result of tighter lending criteria). There's an expected boost to lenders' returns:1.5% to 2% higher than they were before the rates increase. Just thought I'd add the old and new target returns for lenders as I found them tricky to find. The increases actual appear to be between 1.7% and 1.8%: 6 month term increases from 3.8% to 5.5% 1 year term increases from 4.3% to 6.1% 2 year term increases from 5.0% to 6.8% 3 year term increases from 5.8% to 7.5% It should be noted that these are Target Returns, which Elfin define as: " Interest rates are shown annualised, pre-tax, assume repayments are reinvested and borrower defaults follow expected rates. Projected rates are not guaranteed. Past performance and forecasts are not a reliable indicator of future performance." I've been investing with them in a very small way for 2 years and 8 months now and my returns have always been significantly above their stated target returns. My XIRR is currently 8.51%. EDIT: I should add that the vast majority of my investments are for the 3 year term. My XIRR is now 7.37%. Not bad, considering cash drag that comes with 6 month term investments, and way above the projected return.
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Post by Ace on Sept 30, 2022 20:44:23 GMT
If will be interesting to see if our returns improve, or if they've just increased the expected returns to the values that investors are already achieving.
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firedog
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Post by firedog on Sept 30, 2022 21:27:55 GMT
If will be interesting to see if our returns improve, or if they've just increased the expected returns to the values that investors are already achieving. They do categorically state that returns will improve. Of course, we'll have to see in practice, but I'm optimistic.
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Greenwood2
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Post by Greenwood2 on Oct 1, 2022 19:45:05 GMT
If will be interesting to see if our returns improve, or if they've just increased the expected returns to the values that investors are already achieving. I guess if they see lender returns are well above expected it would be sensible to increase the expected to be closer to the actual. Of course I hope the actual will go up as well.
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Post by birdie on Dec 23, 2022 10:01:15 GMT
Just out of interest I have three one year loans that mature in January, I have interest reinvested on all loans, when these loans mature will they be reinvested or money returned? Just to add the one year loans that are maturing have earned 6.9% and my three year loan that has two years to run is at 8.4%.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Dec 23, 2022 10:05:30 GMT
Just out of interest I have three one year loans that mature in January, I have interest reinvested on all loans, when these loans mature will they be reinvested or money returned? Just to add the one year loans that are maturing have earned 6.9% and my three year loan that has two years to run is at 8.4%. Choice is yours. Once the loans have matured you can decide whether to reinvest capital & interest, just capital (with interest being withdrawn to linked account) or withdraw it all. You will need to check your account when the loan expires as you dont get an email notification
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Post by birdie on Dec 23, 2022 10:21:23 GMT
Just out of interest I have three one year loans that mature in January, I have interest reinvested on all loans, when these loans mature will they be reinvested or money returned? Just to add the one year loans that are maturing have earned 6.9% and my three year loan that has two years to run is at 8.4%. Choice is yours. Once the loans have matured you can decide whether to reinvest capital & interest, just capital (with interest being withdrawn to linked account) or withdraw it all. You will need to check your account when the loan expires as you dont get an email notification Do's it go into a holding account, there doesn't seem to be anywhere for it to be held, just Total, on Loan and in the queue.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Dec 23, 2022 10:54:44 GMT
Choice is yours. Once the loans have matured you can decide whether to reinvest capital & interest, just capital (with interest being withdrawn to linked account) or withdraw it all. You will need to check your account when the loan expires as you dont get an email notification Do's it go into a holding account, there doesn't seem to be anywhere for it to be held, just Total, on Loan and in the queue. Im not exactly sure, never actually looked where it was displayed on the dashboard. IIRC When you log in after it has expired there is a banner alerting you to the expired loan and you click to choose what to do with the repayment.
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Greenwood2
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Post by Greenwood2 on Dec 23, 2022 11:36:51 GMT
Do's it go into a holding account, there doesn't seem to be anywhere for it to be held, just Total, on Loan and in the queue. Im not exactly sure, never actually looked where it was displayed on the dashboard. IIRC When you log in after it has expired there is a banner alerting you to the expired loan and you click to choose what to do with the repayment. And during the last month any returned capital is not reinvested, minimum investment term one month, so % on loan will drop and funds in the queue will build up. You can withdraw funds penalty free so if the amount un-lent builds up to a significant amount it might be worth withdrawing it to reduce cash drag. I believe it was confirmed that un-lent funds are withdrawn first, then oldest to newest loans. Edit: Not particularly relevant to this but the best time to cash in loans is immediately after the interest payment, you don't get any 'accrued' interest on loans cashed in during the month, as someone discovered further up the thread.
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Post by df on Dec 23, 2022 15:54:17 GMT
Im not exactly sure, never actually looked where it was displayed on the dashboard. IIRC When you log in after it has expired there is a banner alerting you to the expired loan and you click to choose what to do with the repayment. And during the last month any returned capital is not reinvested, minimum investment term one month, so % on loan will drop and funds in the queue will build up. You can withdraw funds penalty free so if the amount un-lent builds up to a significant amount it might be worth withdrawing it to reduce cash drag. I believe it was confirmed that un-lent funds are withdrawn first, then oldest to newest loans. Edit: Not particularly relevant to this but the best time to cash in loans is immediately after the interest payment, you don't get any 'accrued' interest on loans cashed in during the month, as someone discovered further up the thread. It would've been good it there was a feature to extend the term, say 1 month before the end of initially chosen term.
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treeman
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Post by treeman on Dec 23, 2022 18:33:31 GMT
And during the last month any returned capital is not reinvested, minimum investment term one month, so % on loan will drop and funds in the queue will build up. You can withdraw funds penalty free so if the amount un-lent builds up to a significant amount it might be worth withdrawing it to reduce cash drag. I believe it was confirmed that un-lent funds are withdrawn first, then oldest to newest loans. Edit: Not particularly relevant to this but the best time to cash in loans is immediately after the interest payment, you don't get any 'accrued' interest on loans cashed in during the month, as someone discovered further up the thread. It would've been good it there was a feature to extend the term, say 1 month before the end of initially chosen term. Good idea df . Try suggesting to EM. I've found them very receptive in the past. Not sure how much they monitor here.
FWIW and perhaps of interest I've kept a watch on the site lending stats for a while. Curious to see the impact if any of inflation, looming recession and income squeeze.
Likely xmas surge through Nov. I used this date range as it represents an approximate doubling of the lent figures:
(This data is available without login)
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