ilmoro
Member of DD Central
'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 Nov 13, 2024 22:02:12 GMT
Yes, it's still in the AA so earning 4%. So they are paying it out of their own profits? I thought they only passed on the actual interest they receive from the borrowers less the 0.9% fee Yes. Its still earning 4% but whether 4% will actually be paid will depend on the amount of interest in the pot ... fortunately its seems likely that there will be sufficient funds in the pot to pay the full 4% given that 601 arrears have covered half on their own, even with a year of lender fee offset. If there arent then seems reasonable grounds for complaint.
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Post by frank121 on Nov 13, 2024 22:09:47 GMT
Yes, it's still in the AA so earning 4%. So they are paying it out of their own profits? I thought they only passed on the actual interest they receive from the borrowers less the 0.9% fee
I will leave it to Ilmoro to detail the mechanics as I still don't understand it fully i.e how interest is still paid after the loan is settled. I think it goes toward the overall target rate of 4% which will not be accounted for if paid early but could be wrong. Either way; I think it's fairer to pay these funds ASAP and let the decision lie with investors. (if they choose to pay £1 to withdraw or receive zero interest on the funds. Here is what AC told me some time ago:
As you are aware, the lender fee is calculated throughout each month based on your invested funds and the interest actually received on your loans. The lender fee is deducted as a reduction to the actual interest that you receive. The fee applies to the loans that you hold that pay interest in the prior month.
For Access Accounts, lender fees are calculated on a daily basis over the course of a month and paid on the first of the following month.
For investors in the Access Accounts, the fee will be taken from the Manual Lending Account rate of the loan and the amount left will be used to seek to pay the target interest rate firstly, and any excess would be used as usual to top up the Provision Fund. If the amount of interest left net of the fee is less than the target interest rate, then that lower rate will be paid. So, it is possible over time that Access Account lenders may see a reduction in their actual interest rates paid versus target rates.
There is no lender fee applied to loans in default or recovery (as those loans would not be expected to be receiving interest from the borrower). There is also no fee applied to cash holdings.
Where a borrower misses a payment and you do not receive your interest payment that month, you will not pay fees on those loans in that month. Those fees will accrue along with your interest and only fall due to be paid once you receive your interest payment for that loan, provided there is a lender fee still in place in that month.
If you require any further assistance, please do not hesitate to contact us.
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