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Post by chielamangus on Dec 19, 2014 12:51:17 GMT
New short term loan at 2.3 per cent just announced. Not certain this is enough to tempt many as one can get virtually the same in a Building Society (with the guarantees) or quite a bit more even on Ratesitter (reached the dizzy height of 4% today)
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webwiz
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Post by webwiz on Dec 19, 2014 19:02:35 GMT
How does it work on RS? If you caught it at 4% do you get this rate indefinitely or just for a month? If the latter what rate do you get thereafter?
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warn
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Post by warn on Dec 21, 2014 13:59:29 GMT
How does it work on RS? If you caught it at 4% do you get this rate indefinitely or just for a month? If the latter what rate do you get thereafter? You get 4% until that 1-month loan terminates, i.e. for approx 30 days (or until it's paid back early, I imagine). After that, the money does what you've asked it to do in your reinvestment options -- transfers to your holding account, or gets offered for your chosen term either at Market Rate or at the ill-implemented mess known as Your Rate.
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justsaying
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Post by justsaying on Jan 16, 2015 10:44:14 GMT
Just logged into my Wellesley account, where the monthly access rate appears to have "leapt" up to 2.9%, the funds I placed last week at 2.3% are also now showing at this rate. A sign of things on the up or just competing with Ratesetter?
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oldgrumpy
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Post by oldgrumpy on Jan 16, 2015 11:10:24 GMT
Maybe they feel that they have dropped their rates too much, and are adjusting (which they have every right to do). Now that one month is 2.9% who will bother with one year at 3%, so that could receive a tweak too.
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Post by davee39 on Jan 16, 2015 11:56:39 GMT
I am puzzled by this one. It is not a straight 30 day investment but effectively a 30 day notice account, which makes it too faffy for the modest sums I might be tempted to invest.
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oldgrumpy
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Post by oldgrumpy on Jan 16, 2015 12:14:18 GMT
I am puzzled by this one. It is not a straight 30 day investment but effectively a 30 day notice account, which makes it too faffy for the modest sums I might be tempted to invest. Oh! I wasn't aware of that because I hadn't even thought of using it, so hadn't read about it. Mmm!
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justsaying
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Post by justsaying on Jan 16, 2015 13:25:37 GMT
I've called notice on the modest monthly funds I placed the other day, just to see how the process works, in a few weeks time. I too would expect that they will raise the yearly rate but no sign yet. Really just started using W to spread the risk around from Ratesetter etc. Interestingly, I have just checked my account and 35% of the amount placed 3 days ago has not yet been lent out.....
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Post by uncletone on Jan 17, 2015 9:31:47 GMT
Happily, we start earning interest as soon as our money is sent. However long it takes to lend out, interest is being earned.
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justsaying
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Post by justsaying on Jan 17, 2015 15:39:24 GMT
I was wondering if that is a sign of the state of play at W, ie they dont have sufficient borrower demand to meet lenders dosh, and if so, what they are doing about it. Has that always been the case that cash is not always lent out immediately? I can't see that being sustainable in the long run?
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Steerpike
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Post by Steerpike on Jan 17, 2015 16:27:33 GMT
I was wondering if that is a sign of the state of play at W, ie they dont have sufficient borrower demand to meet lenders dosh, and if so, what they are doing about it. Has that always been the case that cash is not always lent out immediately? I can't see that being sustainable in the long run? I have had a number of investments with Wellesley for a while and I just checked and almost all of them are showing 97.81%, the other small one is at 95.4% I think I remember that the matching up process took longer than I had initially expected.
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webwiz
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Post by webwiz on Jan 17, 2015 17:06:49 GMT
I was wondering if that is a sign of the state of play at W, ie they dont have sufficient borrower demand to meet lenders dosh, and if so, what they are doing about it. Has that always been the case that cash is not always lent out immediately? I can't see that being sustainable in the long run? W don't work like that Quote: Auto-Matching runs once a week, matching lenders to every single loan on a volume weighted basis. During the same weekly process it will re-match existing lenders allowing them to have the best diversification at that present moment in time, but also an improved diversification as the Wellesley loan book grows.
So lenders should find that nearly 100% of their funds are lent out (once the funds have been committed for a week, or at least over a Friday). The difference from 100% is I suppose just down to timing; if there is a deposit just before the auto-matching run there will not have been time to arrange a loan to cover it. Interest is paid on 100%. If only 65% of your funds were lent when you checked I guess this was because they had not been there long enough to have gone through the rematching process. The borrowers will change each week.
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Steerpike
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Post by Steerpike on Jan 17, 2015 17:32:28 GMT
However, as someone once said, one suspects that this discussion is academic.
If Wellesley go out of business and/or the provision fund is depleted, lenders may lose money, otherwise lenders should get their returns regardless of the performance of individual loans. Whatever the notional lender borrower matching algorithm does is probably irrelevant.
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Post by bobthebuilder on Jan 18, 2015 9:26:02 GMT
Maybe they feel that they have dropped their rates too much, and are adjusting (which they have every right to do). Now that one month is 2.9% who will bother with one year at 3%, so that could receive a tweak too. Unfortunately the rate is variable on a daily basis whilst the notice period is fixed, so there's no guarantee that you'll continue to earn 2.9% while you wait the 30 days (or more, since repayment after 30 days is not guaranteed either) for your money to be returned. From W's website: "The 30 Day Easy Access product offers a variable rate of interest which fluctuates on a daily basis according to borrower demand and changes to the Bank of England Base Rate. Interest is calculated on a daily basis and can either be paid every 30 days as income or can be automatically reinvested every 30 days". Since future borrower demand is unpredictable (and I wouldn't rely on their lending stats as a guide since they're updated very irregularly), people might prefer the certainty of RS, even if W pay interest when funds are unmatched to loans.
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justsaying
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Post by justsaying on Jan 18, 2015 13:58:51 GMT
Yes I just saw that on further delving into the Wellesley website. I've started investing there mainly for diversification purposes (I have a chunk in RS), but find it slightly disconcerting that they can change their rates at any time without notice (even if I am only tying money up for a month), I didn't receive any notification of the change (such as an email), only discovered upon logging on to the website. Would still like to continue investing with W as I think they are a relatively safe bet (provision fund, secured lending, investment earning interest immediately), but just wondering what others experiences of them are?
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