bugs4me
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Post by bugs4me on Dec 31, 2013 10:57:05 GMT
Good Morning all, I hope you have all had an enjoyable Christmas break. Thank you for your comments on this board. We are monitoring this forum so we can communicate with you all, answer any questions you may have; and listen to any ways you believe we could improve our service. We agree with bugs4me that communication is very important. We are keen to build relationships with our lenders and maintain completely transparent at all times. We encourage anybody who is thinking of lending through our platform to contact us directly our team is always keen to speak to anyone who has any questions and we would extend that service to anyone regardless of their situation. mikes1531. For early access under the minimum term of 18 months, I believe Andrew Turnbull has responded to your email. For others who are interested: The question regarding early access has sparked internal discussions and as a result we have decided that for the time being there shall be no charge for customers who wish for early access on the 18 month term. This should come into effect in the coming week. Furthermore, we will shortly be adding two new terms onto our platform that will be 6 months and 12 months. We have not yet decided on the rates of these terms but we aim to have these up and running by the end of January at the latest. Once we have launched these two new terms we will therefore introduce a charge that follows suit with the previously explained rationale (If an 18 month term was withdrawn after 12 months, the interest would drop the the 12 month rate). Having said this, we will honour the no fee for the duration of the 18 month term if you choose to sign up before we launch the new shorter terms. yorkshireman. You understood correctly that funds committed for any term (be it 18 month, 3 or 5 years) can be allocated to the same loan made by Wellesley & Co. The one detail I would like to clarify is that we do not lend money out for longer than a 1 year period. As we use allocation this enables us to then reallocate funds to other loans. The benefits of allocation mean that we are able to pay lenders interest as soon as they commit their funds and grant loans to creditworthy borrowers quicker than other platforms. batchoy “If Wellesley are doing their job properly and are holding real assets” – In the initial process of a loan application, the quality of the security is very important to us. All of our loans that we make are secured against property with an average Loan to Value of 50%. In the process of assessing a loan application our extremely experienced credit committee pays great attention to the asset upon which the loan is secured. As a result of this, we do not believe that diversification is as important in our model as it would be with unsecured loans on other platforms so what you mentioned is true. However we understand that many lenders do believe that it is very important and therefor we give the greatest amount of diversification with the loans that we have available. Unlike other secured P2P platforms. We always retain a portion of every loan so that our skin is in the game. This re-enforces that we would only lend your money to borrowers that we would lend to ourselves as our capital is at stake also. Furthermore in the hopeful unlikely event of a default our trustee prioritises the return of our customers money before we receive any of our capital back. We have taken a subordinated position behind our lenders capital. I thank you all for your participation in this forum and would like to encourage that it continues. We are in the lucky position where we have access to this and are keen to hear of any issues big or small, good or bad that you may have. Thank you for the feedback. Communication, whether good news or not so good is always they key IMO. Think I may dip my toe in the water.
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Post by yorkshireman on Dec 31, 2013 15:35:18 GMT
Good Morning all, I hope you have all had an enjoyable Christmas break. Thank you for your comments on this board. We are monitoring this forum so we can communicate with you all, answer any questions you may have; and listen to any ways you believe we could improve our service. We agree with bugs4me that communication is very important. We are keen to build relationships with our lenders and maintain completely transparent at all times. We encourage anybody who is thinking of lending through our platform to contact us directly our team is always keen to speak to anyone who has any questions and we would extend that service to anyone regardless of their situation. mikes1531. For early access under the minimum term of 18 months, I believe Andrew Turnbull has responded to your email. For others who are interested: The question regarding early access has sparked internal discussions and as a result we have decided that for the time being there shall be no charge for customers who wish for early access on the 18 month term. This should come into effect in the coming week. Furthermore, we will shortly be adding two new terms onto our platform that will be 6 months and 12 months. We have not yet decided on the rates of these terms but we aim to have these up and running by the end of January at the latest. Once we have launched these two new terms we will therefore introduce a charge that follows suit with the previously explained rationale (If an 18 month term was withdrawn after 12 months, the interest would drop the the 12 month rate). Having said this, we will honour the no fee for the duration of the 18 month term if you choose to sign up before we launch the new shorter terms. yorkshireman. You understood correctly that funds committed for any term (be it 18 month, 3 or 5 years) can be allocated to the same loan made by Wellesley & Co. The one detail I would like to clarify is that we do not lend money out for longer than a 1 year period. As we use allocation this enables us to then reallocate funds to other loans. The benefits of allocation mean that we are able to pay lenders interest as soon as they commit their funds and grant loans to creditworthy borrowers quicker than other platforms. batchoy “If Wellesley are doing their job properly and are holding real assets” – In the initial process of a loan application, the quality of the security is very important to us. All of our loans that we make are secured against property with an average Loan to Value of 50%. In the process of assessing a loan application our extremely experienced credit committee pays great attention to the asset upon which the loan is secured. As a result of this, we do not believe that diversification is as important in our model as it would be with unsecured loans on other platforms so what you mentioned is true. However we understand that many lenders do believe that it is very important and therefor we give the greatest amount of diversification with the loans that we have available. Unlike other secured P2P platforms. We always retain a portion of every loan so that our skin is in the game. This re-enforces that we would only lend your money to borrowers that we would lend to ourselves as our capital is at stake also. Furthermore in the hopeful unlikely event of a default our trustee prioritises the return of our customers money before we receive any of our capital back. We have taken a subordinated position behind our lenders capital. I thank you all for your participation in this forum and would like to encourage that it continues. We are in the lucky position where we have access to this and are keen to hear of any issues big or small, good or bad that you may have. Thank you for the feedback. Communication, whether good news or not so good is always they key IMO. Think I may dip my toe in the water.
I second bugs4me’s comments and will continue to invest with Wellesley. I would also like to take this opportunity to wish all contributors and readers A Happy and Prosperous New Year.
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Post by mrclondon on Jan 3, 2014 22:33:59 GMT
mikes1531. For early access under the minimum term of 18 months, I believe Andrew Turnbull has responded to your email. For others who are interested: The question regarding early access has sparked internal discussions and as a result we have decided that for the time being there shall be no charge for customers who wish for early access on the 18 month term. This should come into effect in the coming week. Furthermore, we will shortly be adding two new terms onto our platform that will be 6 months and 12 months. We have not yet decided on the rates of these terms but we aim to have these up and running by the end of January at the latest. Once we have launched these two new terms we will therefore introduce a charge that follows suit with the previously explained rationale (If an 18 month term was withdrawn after 12 months, the interest would drop the the 12 month rate). Having said this, we will honour the no fee for the duration of the 18 month term if you choose to sign up before we launch the new shorter terms. What is the rationale for not offering interest on maturity on the 18 month term (or for that matter monthly interest on the 5 year term) ? Interest on maturity is useful for those that expect to drop a tax bracket on retirement for example. Something that perhaps needs further consideration alongside the introduction of the new shorter terms.
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duck
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Post by duck on Jan 4, 2014 9:58:54 GMT
I have carried out a spot of DD especially with respect to the provision fund and personnel, should I believe what I read?
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bugs4me
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Post by bugs4me on Jan 4, 2014 10:50:05 GMT
I have carried out a spot of DD especially with respect to the provision fund and personnel, should I believe what I read? Depends IMO on the reliability of your source(s). I usually carry out background checks myself and they often come up 'clean' but then again.... If there's things that I'm not comfortable with then I ask the individual(s) direct to clarify - certainly not on a public forum
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Post by mrclondon on Jan 5, 2014 12:43:17 GMT
Full marks for communication - a very prompt reply by one of the directors to my email this morning (Sunday). The calculation basis for the interest is 1/12 of the annual rate per month on the monthly interest loans, and n years * the annual rate for the interest on maturity loans. Knowing this I've created the attached XIRR analysis of the cashflows (which is roughly equivalent to AER). The five year rate looks poor value on this basis. EDITED: Removed attachment as now out of date. See revised attachment on this later post.
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pikestaff
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Post by pikestaff on Jan 5, 2014 15:02:27 GMT
I hope the director made a mistake in his reply on the maturity loans. If they really are paying only simple interest the headline rate is very misleading.
I look forward to Wellesley's response here.
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mikes1531
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Post by mikes1531 on Jan 5, 2014 15:29:39 GMT
I hope the director made a mistake in his reply on the maturity loans. If they really are paying only simple interest the headline rate is very misleading. I look forward to Wellesley's response here. I agree. I expect the FCA would take a very dim view of that practice.
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Post by easteregg on Jan 6, 2014 12:50:06 GMT
Lets hope this is a mistake as why would a lender agree to take less interest at the end of the term?!
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mikes1531
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Post by mikes1531 on Jan 6, 2014 13:11:17 GMT
Lets hope this is a mistake as why would a lender agree to take less interest at the end of the term?! How about if they expect to be in a lower tax rate bracket when the loan matures and the interest is paid?
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bugs4me
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Post by bugs4me on Jan 6, 2014 13:33:03 GMT
Lets hope this is a mistake as why would a lender agree to take less interest at the end of the term?! How about if they expect to be in a lower tax rate bracket when the loan matures and the interest is paid? Sorry you've lost me Mike as until the tax rate exceeds 100% (who knows) then the lender would still be disadvantaged.
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mikes1531
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Post by mikes1531 on Jan 6, 2014 15:12:23 GMT
How about if they expect to be in a lower tax rate bracket when the loan matures and the interest is paid? Sorry you've lost me Mike as until the tax rate exceeds 100% (who knows) then the lender would still be disadvantaged. If the lender is currently a higher-rate taxpayer, and expects to be a basic-rate taxpayer in five years' time, then earning a slightly smaller lump of money in five years could produce more money in their pocket than being paid a larger amount spread across all of the five years with the first four years being taxed at 40% and the last year taxed at 20%. Or am I misunderstanding something?
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bugs4me
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Post by bugs4me on Jan 6, 2014 15:23:04 GMT
Sorry you've lost me Mike as until the tax rate exceeds 100% (who knows) then the lender would still be disadvantaged. If the lender is currently a higher-rate taxpayer, and expects to be a basic-rate taxpayer in five years' time, then earning a slightly smaller lump of money in five years could produce more money in their pocket than being paid a larger amount spread across all of the five years with the first four years being taxed at 40% and the last year taxed at 20%. Or am I misunderstanding something? I'm under the impression that the query is over the interest rates being earned and how they are calculated. Whether it's compound or simple interest being applied.
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mikes1531
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Post by mikes1531 on Jan 6, 2014 16:30:47 GMT
I'm under the impression that the query is over the interest rates being earned and how they are calculated. Whether it's compound or simple interest being applied. That certainly is an open question, but my comment was in response to easteregg's question why a lender would agree to suffer a lower return if they opted to receive their interest at maturity rather than monthly. As mrclondon's table shows, on 4-year investments Wellesley appear to be offering 6.69% AER to lenders who take their interest monthly but only 6.37% to lenders willing to wait until the end of the four years before receiving their interest.
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bugs4me
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Post by bugs4me on Jan 6, 2014 16:42:42 GMT
I'm under the impression that the query is over the interest rates being earned and how they are calculated. Whether it's compound or simple interest being applied. That certainly is an open question, but my comment was in response to easteregg's question why a lender would agree to suffer a lower return if they opted to receive their interest at maturity rather than monthly. As mrclondon's table shows, on 4-year investments Wellesley appear to be offering 6.69% AER to lenders who take their interest monthly but only 6.37% to lenders willing to wait until the end of the four years before receiving their interest. Got it - thanks for the clarification.
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