one21
Member of DD Central
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Post by one21 on May 19, 2020 21:34:55 GMT
Obviously loans have to be matched to new Lenders in order for funds to be returned under RYI. So if there are fewer Lenders due to higher risk and lower interest rates, the process is going to slow down accordingly. It maybe the case that Lenders will have their funds returned quicker by direct repayment from the borrower than from the RYI process. Repayment direct from borrower could take up to 5 years. Yes and some a few months, it will vary with each Lender and how RateSetter diversified their funds, both in amounts and length of time.
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Post by james91 on May 19, 2020 21:46:23 GMT
Repayment direct from borrower could take up to 5 years. Yes and some a few months, it will vary with each Lender and how RateSetter diversified their funds, both in amounts and length of time. Annoyingly 2/3 of my total loan value is in a single property loan, which doesn't release for another 10 months. The rest seems to be in loans that range between 4 months and 56 months remaining - so the amount that's being repaid is extremely small at the moment. I guess for some people, they will receive their repayments long before their RYI reaches the top of the queue.
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one21
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Post by one21 on May 19, 2020 22:04:25 GMT
Yes and some a few months, it will vary with each Lender and how RateSetter diversified their funds, both in amounts and length of time. Annoyingly 2/3 of my total loan value is in a single property loan, which doesn't release for another 10 months. The rest seems to be in loans that range between 4 months and 56 months remaining - so the amount that's being repaid is extremely small at the moment. I guess for some people, they will receive their repayments long before their RYI reaches the top of the queue. I'm in a similar position! It seems RateSetter’s auto-diversification model is unfair in this respect and should be modified imho.
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Post by oppsididitagain on May 19, 2020 22:36:35 GMT
Annoyingly 2/3 of my total loan value is in a single property loan, which doesn't release for another 10 months. The rest seems to be in loans that range between 4 months and 56 months remaining - so the amount that's being repaid is extremely small at the moment. I guess for some people, they will receive their repayments long before their RYI reaches the top of the queue. I'm in a similar position! It seems RateSetter’s auto-diversification model is unfair in this respect and should be modified imho. RS doesn't have an auto-diversification model as you call it . You add money to which ever market you choose, and the rate you set, when that money gets to the front of the queue you get matched with the next in line. The risk is 'pooled' and covered by the PF. Note : Any loan could be repaid early at any time, so if you had say 75% matched to 1 borrower, and that loan gets repaid early you will get the money back and in this climate no doubt be jumping for joy !!
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one21
Member of DD Central
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Post by one21 on May 19, 2020 23:06:43 GMT
I'm in a similar position! It seems RateSetter’s auto-diversification model is unfair in this respect and should be modified imho. RS doesn't have an auto-diversification model as you call it . You add money to which ever market you choose, and the rate you set, when that money gets to the front of the queue you get matched with the next in line. The risk is 'pooled' and covered by the PF. Note : Any loan could be repaid early at any time, so if you had say 75% matched to 1 borrower, and that loan gets repaid early you will get the money back and in this climate no doubt be jumping for joy !! Exactly thats the problem! it's all very well in normal times, but in a situation that we are in now with a long queue for RYI, Lenders are stuck with how RateSetter distributed their funds. Assuming we are talking about the 'Access' account where many Lenders had their settings switched to the 'going rate' For example one Lender could have his total funds put into the five year market and another Lenders total funds put into the 1 year market.
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Post by freddles91 on May 20, 2020 3:47:34 GMT
So something I'm not too sure about is why Ratesetter has stopped opening up new Investing accounts. Surely they should be encouraging that as that would inject much needed liquidity into the system rather than relying on current investors to fund through all the RYI requests. Unless I'm missing something (which I probably am) it doesn't make too much sense to me..
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ceejay
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Post by ceejay on May 20, 2020 7:46:07 GMT
RS doesn't have an auto-diversification model as you call it . You add money to which ever market you choose, and the rate you set, when that money gets to the front of the queue you get matched with the next in line. The risk is 'pooled' and covered by the PF. Note : Any loan could be repaid early at any time, so if you had say 75% matched to 1 borrower, and that loan gets repaid early you will get the money back and in this climate no doubt be jumping for joy !! Exactly thats the problem! it's all very well in normal times, but in a situation that we are in now with a long queue for RYI, Lenders are stuck with how RateSetter distributed their funds. Assuming we are talking about the 'Access' account where many Lenders had their settings switched to the 'going rate' For example one Lender could have his total funds put into the five year market and another Lenders total funds put into the 1 year market. Some sloppy usage of words here which could cause confusion, so let's untangle that. The "1 Year Market" and "5 Year Market" are distinct markets (now closed to new investors, so if you don't have any money in them then they won't appear on the website for you). Any funds that have been put into those have been wholly at the lenders request. The Access market is an entirely different beast - by its nature it contains loans of random lengths, so if RYI isn't working (or working too slowly) then lenders will have to wait for random periods up to five years for the loans to repay, assuming that they do. This much was evident from the moment the Access loans were launched and if you didn't understand that then...
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Post by oppsididitagain on May 20, 2020 8:05:44 GMT
RS doesn't have an auto-diversification model as you call it . You add money to which ever market you choose, and the rate you set, when that money gets to the front of the queue you get matched with the next in line. The risk is 'pooled' and covered by the PF. Note : Any loan could be repaid early at any time, so if you had say 75% matched to 1 borrower, and that loan gets repaid early you will get the money back and in this climate no doubt be jumping for joy !! Exactly thats the problem! it's all very well in normal times, but in a situation that we are in now with a long queue for RYI, Lenders are stuck with how RateSetter distributed their funds. Assuming we are talking about the 'Access' account where many Lenders had their settings switched to the 'going rate' For example one Lender could have his total funds put into the five year market and another Lenders total funds put into the 1 year market. I'm not sure I understand,. YOU put your funds into either Access, 1 Yr or 5 Yr markets. YOU also chose the rate at which these funds were lent. YOU chose the reinvestment settings, YOU can choose not to reinvest at the going rate and which markets you want to reinvest in ? You can choose all of this. RS explains that access loans are amortising loans from 6months upto 5yrs. 1Yr are 1Yr bullet loans(interest all paid at the maturity) and 5 yrs loans are amortising 5Yr loans. Each market has its own rules for withdrawals. I.E some charge some dont. Its a pooled investment risk, so the risk is equal across the platform. The main problem is liquidity , more people put their money into access **. and now more people want their money back from access, and less people are willing to lend in Access. SO like anything in life you can only get your money back if you can sell the loan to someone. I have spoken to RS asking why the loans in my access with 5yr maturity can't be sold vis the 5yr market , and they tell me its because they must be repaid via the market they were originally invested in. ** Technically this may not be true.
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on May 20, 2020 8:55:55 GMT
RS doesn't have an auto-diversification model as you call it . You add money to which ever market you choose, and the rate you set, when that money gets to the front of the queue you get matched with the next in line. The risk is 'pooled' and covered by the PF. Note : Any loan could be repaid early at any time, so if you had say 75% matched to 1 borrower, and that loan gets repaid early you will get the money back and in this climate no doubt be jumping for joy !! Exactly thats the problem! it's all very well in normal times, but in a situation that we are in now with a long queue for RYI, Lenders are stuck with how RateSetter distributed their funds. Assuming we are talking about the 'Access' account where many Lenders had their settings switched to the 'going rate' For example one Lender could have his total funds put into the five year market and another Lenders total funds put into the 1 year market. This is all your choice, you chose what you want to invest into and at what rate. no one else does this for you
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Post by Badly Drawn Stickman on May 20, 2020 9:09:27 GMT
Exactly thats the problem! it's all very well in normal times, but in a situation that we are in now with a long queue for RYI, Lenders are stuck with how RateSetter distributed their funds. Assuming we are talking about the 'Access' account where many Lenders had their settings switched to the 'going rate' For example one Lender could have his total funds put into the five year market and another Lenders total funds put into the 1 year market. This is all your choice, you chose what you want to invest into and at what rate. no one else does this for you Not really, yes you select the market and the rate but have no idea what gift will really be in the box when you open it.
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benaj
Member of DD Central
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Post by benaj on May 20, 2020 9:17:29 GMT
more money being released even with the rate cut we should see nearly 50 million by June. good job! I got a feeling RS has released > 50 mil since March via other means. I had more repaid than the amount I requested. RYI lane is just long.
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bt
Sir Bufton Tufton, Jean Paul Sartre Zippy, Bungle, Jeffrey Archer Andre Previn and the LSO Hello
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Post by bt on May 20, 2020 9:52:22 GMT
This much was evident from the moment the Access loans were launched and if you didn't understand that then... I didn't. Until I came to release my funds in March I was unaware I had been moved to Access. Maybe I should have been following more proactively, but in the mass of almost daily emails from Ratesetter these changes got overlooked. Surely a change this important should have been communicated more effectively than a couple of emails? A letter, maybe?
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gg
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Post by gg on May 20, 2020 12:30:30 GMT
‘The risk is pooled and covered by the pf’
In normal times, I would agree 100%. However, these are not normal times.
Those who exited RS early (RYI) have enjoyed the full protection of the provision fund.
As defaults increase due, in part, to exploding unemployment it is much less likely that PF will be able to cover all missed payments. Those exiting last will be left holding the baby (imho).
gg
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Post by ruralres66 on May 20, 2020 12:48:09 GMT
That's how I see it.
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adrian77
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Post by adrian77 on May 20, 2020 13:04:12 GMT
I think you are right here but hopefully as this virus threat decreases more people will cancel their withdrawals and it won't be so long
Given that there are a lot of threads about this and the fact many of is have been confused I think either we are thick or FS have not been exactly transparent - personally I think the latter.
I think the RS stragey is basically nearly freezing the access market so that their loan book is intact whilst cash dribbles out due to loans of various lengths slowly coming to completion - at the same time RS are getting early withdrawal penalty fees and 50% of all interest. If I am correct I think this is a sensible and intelligent decision as it prevents a massive outflow of funds. But I would have preferred a bit more honesty rather than all this PR twaddle banging on about how much has been released whilst not revealing how much has been requested to be withdrawn (unless I have missed it).
We are where we are and I would rather wait 6 months as I predict for my funds to be returned than to see RS go under - I was told to expect this to take about a month but that is not going to happen as it is already 6 about weeks.
At least RS do seem to have an intelligent strategy and I am fairly confident they won't go under anytime soon unlike many other cowboy operators in this industry.
Clearly RS still plan to float - may buy some shares when they do - depends on how they deal with/get through this current snaggette.
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