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Post by Ace on Aug 15, 2021 20:09:13 GMT
You need to invest a minimum of £100 total on the platform, but you can invest much lower than that in each loan. From memory, I think the minimum you can invest in one loan is the smallest amount that would generate at least 1p of interest per month. That what is says. I didn't understand this part. Interest rates are roughly 6%-7%. Some 'minimums' are as little as £2 (that's 1p p/m), some other loans I've seen were around £25 (which should pay about 15p). Not a problem for me, but just curious what's the logic behind such wide range of 'minimums'? I haven't seen any minimums over £4. Just tried all of the currently available Loans and they're all around £3.xx.
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Post by spareapennyor2 on Aug 15, 2021 21:47:33 GMT
Minimum goes up towards the month end check the last couple of days
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Post by Ace on Aug 15, 2021 22:09:27 GMT
Minimum goes up towards the month end check the last couple of days Ah, that makes sense. Well... actually it's pretty crazy, but it makes logical sense in that the minimum investment is required to generate 1p of interest per month. Since all loans pay interest on the first of the month on K, if you invest part way through the month there are fewer days over which to generate the 1p of interest in the first month, so a larger investment is required the nearer you are to the month end. So, both totally whacky and logical at the same time IMO.
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Post by gramsky on Aug 16, 2021 10:51:06 GMT
i have a couple of questions regarding the ISA that maybe someone can answer:- 1. Are both Self-Select and Auto-Invest available in the ISA? 2. How does the 1, 3 & 5 year terms work? If I opt for 1 year will I only be invested in loans with a maximum of 1 year term or would I be invested in loans with longer terms but I am repaid after 1 year? 3. And how is the amount invested in each loan controlled? Thanks 1. Yes, but can't invest in self-select via ISA if the funds were transferred-in from another ISA manager. Kuflink say they are going to fix this. 2. I'm not 100% sure here, but my understanding is that you could pick up loans of any length, and that they would be passed on to other investors or Kuflink if still performing at the end of your 1 year. You would not receive the funds from any loans in default until the issue was resolved. 3. At the whim of Kuflink. I have found the answer to 3. on the Kuflink website and it seems mind bogglingly complicated:- Diversification & Reallocation of funds in the Pool Diversification of funds
The funds of an investment in the pool are split proportionately to the loan amount across all the pool's performing loans. To achieve this: i) Both investment and loan monetary amount is expressed as integers by multiplying by 100 so that, for example, the value of £0.01 becomes 1 and £100 becomes 10,000 etc. ii) Each investment/loan amount is represented as an integer fraction of your investment amount multiplied by the loan amount divided by the sum of all loan amounts in the pool. As an example, let's assume that we have a pool consisting of two loans with a loan amount of £100 and £200 respectively and that a user invests £10 into the pool, the split would become (1,000*1,000)/3,000 in the first loan and (1,000*2,000)/3,000 in the second. It is worth noting that we do not round off the values but store the exact representation. Further, the split is the same whether you invest £0.01 or £ 1,000,000. The loans and the respective loan amounts will change over the investment period. Whenever a new loan is introduced or repaid, the existing investment will be automatically diversified to reflect the changes. Should a borrower in one of the loans not meet their financial obligations and the loan goes into default, the loan will be removed from the pool to prevent new investors from investing. The funds of an existing investor will be separated until a solution has been reached with the borrower. Under these circumstances, interest will continue to be paid. If the investment matures before the funds in the loans in default have been recovered, only the funds in performing loans will be received on maturity and the other funds after recovery. Reallocation of funds
i)With regards to Auto-Invest and IF-ISA, we take steps to achieve diversification. ii) Kuflink will manage your portfolio which may include re-allocating your funds and therefore diversifying your portfolio as we see fit in order to give you exposure to a range of Borrowers and Loan Parts as new opportunities arise. iii) There will be specific trigger events, such as new loans entering the pool and repayment of loans, which will trigger a reallocation of your funds across the loans. However, if you have funds in a defaulted loan or loans, these funds will stay within the loan(s) on a triggered reallocation event, until the borrower agrees to new terms or funds are repaid.
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Post by kuflinkirlisa on Aug 16, 2021 11:09:40 GMT
kuflink would you be able to clarify on the above points please. Hi dave4, Certainly. I have already spoken to the customer who originally asked the questions however, to clarify I have answered each query below in bold: 1. Are both Self-Select and Auto-Invest available in the ISA? Correct, both of these products offer the ISA option. At this moment in time the Select-Invest ISA is only available for new deposits from current tax year ISA allowances, where as the Auto IF-ISA is also available for ISA transfer INS as well as new deposits. We aim to introduce the option for transfer ins to go into Select-Invest ISA loans in the future. 2. How does the 1, 3 & 5 year terms work? If I opt for 1 year will I only be invested in loans with a maximum of 1 year term or would I be invested in loans with longer terms but I am repaid after 1 year? Your funds will be diversified across all loans available in the pool, and as new loans are added / loans mature, your funds will realign to match with the pool. You will then have the choice on maturity to re-term your investment for a further period or to withdraw funds / transfer out to another provider at a £35.00 transfer out fee. The latter is dependent on the status of the loans at the time. 3. And how is the amount invested in each loan controlled? Please view this FAQ link which explains how the diversification works - kb.kuflink.com/knowledge/diversification-reallocation-of-funds-in-the-poolIf anyone has further questions around this, please contact me directly on live chat, email - l.holmes@kuflink.com or telephone being 01474 33 44 88. Have a great Monday!
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Post by Ace on Aug 16, 2021 12:16:10 GMT
1. Yes, but can't invest in self-select via ISA if the funds were transferred-in from another ISA manager. Kuflink say they are going to fix this. 2. I'm not 100% sure here, but my understanding is that you could pick up loans of any length, and that they would be passed on to other investors or Kuflink if still performing at the end of your 1 year. You would not receive the funds from any loans in default until the issue was resolved. 3. At the whim of Kuflink. I have found the answer to 3. on the Kuflink website and it seems mind bogglingly complicated:- Diversification & Reallocation of funds in the Pool Diversification of funds
The funds of an investment in the pool are split proportionately to the loan amount across all the pool's performing loans. To achieve this: i) Both investment and loan monetary amount is expressed as integers by multiplying by 100 so that, for example, the value of £0.01 becomes 1 and £100 becomes 10,000 etc. ii) Each investment/loan amount is represented as an integer fraction of your investment amount multiplied by the loan amount divided by the sum of all loan amounts in the pool. As an example, let's assume that we have a pool consisting of two loans with a loan amount of £100 and £200 respectively and that a user invests £10 into the pool, the split would become (1,000*1,000)/3,000 in the first loan and (1,000*2,000)/3,000 in the second. It is worth noting that we do not round off the values but store the exact representation. Further, the split is the same whether you invest £0.01 or £ 1,000,000. The loans and the respective loan amounts will change over the investment period. Whenever a new loan is introduced or repaid, the existing investment will be automatically diversified to reflect the changes. Should a borrower in one of the loans not meet their financial obligations and the loan goes into default, the loan will be removed from the pool to prevent new investors from investing. The funds of an existing investor will be separated until a solution has been reached with the borrower. Under these circumstances, interest will continue to be paid. If the investment matures before the funds in the loans in default have been recovered, only the funds in performing loans will be received on maturity and the other funds after recovery. Reallocation of funds
i)With regards to Auto-Invest and IF-ISA, we take steps to achieve diversification. ii) Kuflink will manage your portfolio which may include re-allocating your funds and therefore diversifying your portfolio as we see fit in order to give you exposure to a range of Borrowers and Loan Parts as new opportunities arise. iii) There will be specific trigger events, such as new loans entering the pool and repayment of loans, which will trigger a reallocation of your funds across the loans. However, if you have funds in a defaulted loan or loans, these funds will stay within the loan(s) on a triggered reallocation event, until the borrower agrees to new terms or funds are repaid. Yes, a rather clumsy explanation of how one's investment is spread amongst loans in the Autoinvest pool. I think it boils down to... your investment in each loan in the pool will be the same percentage that each loan represents in the pool. E.g. if 5% of the funds in the pool was invested in loan A, then 5% of your auto-investment will be invested in loan A. Kuflink are free to decide how much of each loan to place in the pool, so, in that sense, you are at the whim of Kuflink to decide where your money is invested, which is what you are asking for when you invest in an autoinvest product. I couldn't find any commitment to ensuring that no more than x% of one's funds would be invested in any one loan/borrower, which would have been nice. However, I believe the pool is currently large enough that it's not a major concern. kuflinkirlisa, I still can't find a way to see which loans and in what proportion my autoinvest funds are invested. And, more importantly, this means that I have no way of seeing whether any of my autoinvest funds are tied up in defaults. Am I missing something?
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corto
Member of DD Central
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Post by corto on Aug 16, 2021 14:15:18 GMT
Minimum goes up towards the month end check the last couple of days Ah, that makes sense. Well... actually it's pretty crazy, but it makes logical sense in that the minimum investment is required to generate 1p of interest per month. Since all loans pay interest on the first of the month on K, if you invest part way through the month there are fewer days over which to generate the 1p of interest in the first month, so a larger investment is required the nearer you are to the month end. So, both totally whacky and logical at the same time IMO. So, if the minimum is 3£ and one invests 5, does one get 1p or 2 or 1.66 or something different? (not that it matters much)
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Post by Ace on Aug 16, 2021 14:28:42 GMT
Ah, that makes sense. Well... actually it's pretty crazy, but it makes logical sense in that the minimum investment is required to generate 1p of interest per month. Since all loans pay interest on the first of the month on K, if you invest part way through the month there are fewer days over which to generate the 1p of interest in the first month, so a larger investment is required the nearer you are to the month end. So, both totally whacky and logical at the same time IMO. So, if the minimum is 3£ and one invests 5, does one get 1p or 2 or 1.66 or something different? (not that it matters much) Presumably 1p at the end of the first month with 0.66p carried over to next month.
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Post by kuflinkirlisa on Aug 16, 2021 15:06:37 GMT
I have found the answer to 3. on the Kuflink website and it seems mind bogglingly complicated:- Diversification & Reallocation of funds in the Pool Diversification of funds
The funds of an investment in the pool are split proportionately to the loan amount across all the pool's performing loans. To achieve this: i) Both investment and loan monetary amount is expressed as integers by multiplying by 100 so that, for example, the value of £0.01 becomes 1 and £100 becomes 10,000 etc. ii) Each investment/loan amount is represented as an integer fraction of your investment amount multiplied by the loan amount divided by the sum of all loan amounts in the pool. As an example, let's assume that we have a pool consisting of two loans with a loan amount of £100 and £200 respectively and that a user invests £10 into the pool, the split would become (1,000*1,000)/3,000 in the first loan and (1,000*2,000)/3,000 in the second. It is worth noting that we do not round off the values but store the exact representation. Further, the split is the same whether you invest £0.01 or £ 1,000,000. The loans and the respective loan amounts will change over the investment period. Whenever a new loan is introduced or repaid, the existing investment will be automatically diversified to reflect the changes. Should a borrower in one of the loans not meet their financial obligations and the loan goes into default, the loan will be removed from the pool to prevent new investors from investing. The funds of an existing investor will be separated until a solution has been reached with the borrower. Under these circumstances, interest will continue to be paid. If the investment matures before the funds in the loans in default have been recovered, only the funds in performing loans will be received on maturity and the other funds after recovery. Reallocation of funds
i)With regards to Auto-Invest and IF-ISA, we take steps to achieve diversification. ii) Kuflink will manage your portfolio which may include re-allocating your funds and therefore diversifying your portfolio as we see fit in order to give you exposure to a range of Borrowers and Loan Parts as new opportunities arise. iii) There will be specific trigger events, such as new loans entering the pool and repayment of loans, which will trigger a reallocation of your funds across the loans. However, if you have funds in a defaulted loan or loans, these funds will stay within the loan(s) on a triggered reallocation event, until the borrower agrees to new terms or funds are repaid. Yes, a rather clumsy explanation of how one's investment is spread amongst loans in the Autoinvest pool. I think it boils down to... your investment in each loan in the pool will be the same percentage that each loan represents in the pool. E.g. if 5% of the funds in the pool was invested in loan A, then 5% of your auto-investment will be invested in loan A. Kuflink are free to decide how much of each loan to place in the pool, so, in that sense, you are at the whim of Kuflink to decide where your money is invested, which is what you are asking for when you invest in an autoinvest product. I couldn't find any commitment to ensuring that no more than x% of one's funds would be invested in any one loan/borrower, which would have been nice. However, I believe the pool is currently large enough that it's not a major concern. kuflinkirlisa , I still can't find a way to see which loans and in what proportion my autoinvest funds are invested. And, more importantly, this means that I have no way of seeing whether any of my autoinvest funds are tied up in defaults. Am I missing something? Hi Ace, This feature is coming to the platform in the near future, where you will be able to view the exact split of your funds in any of the performance status. For the time being, if you would like a breakdown of your investment figures to date displaying how much is invested into each loan in the pool then please contact me directly so I can run through some security checks and provide this information to you. Hope that helps!
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