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Post by Harland Kearney on Aug 30, 2023 13:08:35 GMT
Out of interest, what would be the minimum differential (of p2p above FSCS protected building society type account) you would be comfortable with? Asking for a friend. Loanpad's 6.2% for 60 day notice is equivalent to 6.4% AER with reinvestment, and the average notice can be reduced to 30 days with rolling withdrawals. The closest FSCS equivalent I could find with a very quick look was West Brom BS at 5.25% with 60 day notice. I prefer the Loanpad offering. It's undoubtedly at the absolute safest end of p2p offerings. The fact that I don't need to repeatedly move the funds to chase the latest FSCS highest rate is a big factor for me. Over the past 4 years I will have built up a 5+% buffer over the maximum I could have earned by constantly chasing the highest FSCS equivalent. To lose that much capital on LP would take a total write-off of at least 9 average loans. Given that they've never even lost a penny of interest, let alone any capital, that would seem pretty unlikely. Any loan being a complete write-off on LP would be extremely unlikely, so it would need losses on many more than 9 loans to cancel out my 5+% buffer, which grows daily. E.g. it would take at least 18 loans going so badly wrong that selling the security recovered less than 21.5% of their current valuations. And don't forget that those LTVs are based on the actual valuations rather than the predicted future LTGDVs. I'd be looking at a minimum of around 7.5% for the next safest group of platforms, but LP is a special case for me where I'm prepared to accept less, particularly when allowing for its ease of use. Having said all of that, I do think that LP need to keep inching their rates higher to maintain market share in the current environment. Very good reply Ace as always, these are exactly my thoughts too.
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p2pfan
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Post by p2pfan on Aug 30, 2023 13:59:02 GMT
It's interesting how, when LP dropped their rates, they did so in 0.5% increments.
Now, they raise them at a snail's pace, by miniscule amounts of 0.1%, only after we have to wait a few weeks.
Very canny of them... great marketing by them to do it in this way.
LP's rates are way too low compared to risk-free bank savings accounts and the current rate of inflation for me to consider investing further amounts with them.
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firedog
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Post by firedog on Aug 30, 2023 14:43:53 GMT
It's interesting how, when LP dropped their rates, they did so in 0.5% increments. Now, they raise them at a snail's pace, by miniscule amounts of 0.1%, only after we have to wait a few weeks. Very canny of them... great marketing by them to do it in this way. LP's rates are way too low compared to risk-free bank savings accounts and the current rate of inflation for me to consider investing further amounts with them. I suspect it's more to do with the economics of how they're lending nowadays – their recent loans tend to be at variable rates, specified at between 9.5 and 11 per cent. Before they were lending at flat rates for the term of the loan of around 6 per cent or so. This means they now have more freedom to adjust returns to lenders, albeit in smaller increments. The proof of this will come when interest rates start to drop, I suppose, but I'd wager it will be a similar approach. Like others I'd always like to see higher rates, but it's always an individual assessment of risk and I'm comfortable with Loanpad's.
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dave4
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Cynical is a hobby not a lifestyle
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Post by dave4 on Aug 30, 2023 14:57:00 GMT
Ns&I 1 year Fixed bond now paying 6.2%. I don't consider a 1 year bond with no access to be equivalent. It sounds like a good deal, but a different beast. Agreed, not the same product, but the "guaranteed /safe" offerings must have an impact on loanpads thinking. There must be a point at which liquidity may be affected.
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ashtondav
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Post by ashtondav on Aug 30, 2023 16:05:58 GMT
I sometimes need instant - or 7 day access. The fact that I can’t hold more than £20,000 in LP classic means BS is only option. I agree the 60 day account is (marginally) competitive.
As for one year bonds not being comparable I thought that too until AC locked £40k of mine up for slightly longer than a year!!! Been burned. P2P has its risks!
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mogish
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Post by mogish on Aug 31, 2023 6:44:18 GMT
I just breached my own p2p limit by exceeding Lp funds with UB money. Will need to transfer Isa out to bring back into limits again.
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eeyore
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Post by eeyore on Aug 31, 2023 9:10:48 GMT
I sometimes need instant - or 7 day access. The fact that I can’t hold more than £20,000 in LP classic means BS is only option. I agree the 60 day account is (marginally) competitive. As for one year bonds not being comparable I thought that too until AC locked £40k of mine up for slightly longer than a year!!! Been burned. P2P has its risks! You can achieve partial 7-day access with the Premium Loanpad account: - 60 days notice is equivalent to nine weeks (63 days)
- divide your normal account balance by nine (eg if your balance is £9,000, use £1,000)
- set-up a sequence of nine weekly withdrawals from the Premium account to the Cash account of one-ninth of the balance (eg £1,000)
- a couple of days before each weekly withdrawal is due, decide if want the cash or, if not, cancel the withdrawal
- every week, set-up a withdrawal of one-ninth of the balance for nine weeks in advance.
With this process, you can extract part of the balance with little over a week's notice and all of the balance within nine weeks. It may seem to be a trifle complicated, but once set up, I find it's fairly quick - I can do the weekly cancel and re-request for mine & my partner's accounts inside five minutes. [With thanks to Ace for revealing this approach a few years back.]
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SteveK
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Post by SteveK on Aug 31, 2023 9:32:26 GMT
I sometimes need instant - or 7 day access. The fact that I can’t hold more than £20,000 in LP classic means BS is only option. I agree the 60 day account is (marginally) competitive. As for one year bonds not being comparable I thought that too until AC locked £40k of mine up for slightly longer than a year!!! Been burned. P2P has its risks! You can achieve partial 7-day access with the Premium Loanpad account: - 60 days notice is equivalent to nine weeks (63 days)
- divide your normal account balance by nine (eg if your balance is £9,000, use £1,000)
- set-up a sequence of nine weekly withdrawals from the Premium account to the Cash account of one-ninth of the balance (eg £1,000)
- a couple of days before each weekly withdrawal is due, decide if want the cash or, if not, cancel the withdrawal
- every week, set-up a withdrawal of one-ninth of the balance for nine weeks in advance.
With this process, you can extract part of the balance with little over a week's notice and all of the balance within nine weeks. It may seem to be a trifle complicated, but once set up, I find it's fairly quick - I can do the weekly cancel and re-request for mine & my partner's accounts inside five minutes. [With thanks to Ace for revealing this approach a few years back.]. Oh how devious, I love it!
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Post by Ace on Aug 31, 2023 9:37:38 GMT
@stevek, it's not considered to be devious by Loanpad. I checked with them before publishing the idea. They were very happy for people to use the account in this way.
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SteveK
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Post by SteveK on Aug 31, 2023 9:56:33 GMT
@stevek, it's not considered to be devious by Loanpad. I checked with them before publishing the idea. They were very happy for people to use the account in this way. Sorry Ace, I didn't mean to imply it was untoward but that it took a creative mindset to work it out, and thanks as I would never have come up with that. And, of course, I understand you wanted to clarify Loanpad's position re the procedure.
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firedog
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Post by firedog on Aug 31, 2023 11:09:30 GMT
@stevek, it's not considered to be devious by Loanpad. I checked with them before publishing the idea. They were very happy for people to use the account in this way. Sorry Ace , I didn't mean to imply it was untoward but that it took a creative mindset to work it out, and thanks as I would never have come up with that. And, of course, I understand you wanted to clarify Loanpad's position re the procedure. I think Ace probably did the same with Assetz Capital's similar account (I know I did). But in Assetz's case, if I remember correctly, they did suggest it was gaming the system. Loanpad seem perfectly content with it.
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rscal
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Post by rscal on Sept 18, 2023 15:40:21 GMT
See the latest email from LP on term variation: they are saying that the majority of their loans have been made with adjustable rates (linked to BOE) thus passing on the borrowers the rate-risk we as lenders would otherwise accept. The 'quid pro quo' they are bringing forward is we would receive << 60 days notice of downward rate changes [in spite of being on 60 days notice of withdrawal] Fair play as I can't see any way this really punishes lenders.
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Post by jono75 on Sept 18, 2023 18:27:44 GMT
See the latest email from LP on term variation: they are saying that the majority of their loans have been made with adjustable rates (linked to BOE) thus passing on the borrowers the rate-risk we as lenders would otherwise accept. The 'quid pro quo' they are bringing forward is we would receive << 60 days notice of downward rate changes [in spite of being on 60 days notice of withdrawal] Fair play as I can't see any way this really punishes lenders. Looks like it only affects Classic accounts, for how long though, I wonder. I think they'll drop the rates at the first sniff of a drop. Might be worth looking at a longer FSCS account now.
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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 Sept 18, 2023 21:14:35 GMT
See the latest email from LP on term variation: they are saying that the majority of their loans have been made with adjustable rates (linked to BOE) thus passing on the borrowers the rate-risk we as lenders would otherwise accept. The 'quid pro quo' they are bringing forward is we would receive << 60 days notice of downward rate changes [in spite of being on 60 days notice of withdrawal] Fair play as I can't see any way this really punishes lenders. Looks like it only affects Classic accounts, for how long though, I wonder. I think they'll drop the rates at the first sniff of a drop. Might be worth looking at a longer FSCS account now. No, both accounts ... it changes current 60 day on premier & 7 day on Classic to zero but aim for 7 days
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Post by ferpesin on Sept 19, 2023 2:59:30 GMT
See the latest email from LP on term variation: they are saying that the majority of their loans have been made with adjustable rates (linked to BOE) thus passing on the borrowers the rate-risk we as lenders would otherwise accept. The 'quid pro quo' they are bringing forward is we would receive << 60 days notice of downward rate changes [in spite of being on 60 days notice of withdrawal] Fair play as I can't see any way this really punishes lenders. Then I expect to see also immediate increases with BOE decisions, otherwise I am getting out. I don't want to get trapped like in AC again. Let's see by the end of the week...
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