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Post by Ace on Feb 19, 2024 13:43:59 GMT
Following repayment of a defaulted loan today, I noticed that there is now an Actual Interest Rate column in the portfolio table on the dashboard when the Completed tab is selected. I can't be sure it's new, but I hadn't noticed it before. If it is new it's a welcome additional piece of info that gives us the annualised return paid after penalty interest has been taken into account (and presumably after losses are taken into account, but I don't have any of those yet). Well done CP.
On a less well done point, why did it take a week from the loan repaying to me being credited with the payment?
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littleoldlady
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Post by littleoldlady on Feb 19, 2024 22:34:16 GMT
It would be more use if it was correct. Here's one of my loans:
£500 30/11/2018 22/11/2019 8% 8.00% £500 £25.10
Actual interest rate is 5% not 8%
Many or most of them appear to be wrong.
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Post by overthehill on Feb 19, 2024 22:55:57 GMT
It would be more use if it was correct. Here's one of my loans: £500 30/11/2018 22/11/2019 8% 8.00% £500 £25.10 Actual interest rate is 5% not 8% Many or most of them appear to be wrong.
They haven't forgotten the cash drag have they ? What a drag.
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Post by Ace on Feb 20, 2024 0:18:18 GMT
It would be more use if it was correct. Here's one of my loans: £500 30/11/2018 22/11/2019 8% 8.00% £500 £25.10 Actual interest rate is 5% not 8% Many or most of them appear to be wrong. Are you sure that it is the interest rate that is incorrect? I've investigated a few of mine that looked wrong, but the rate turned out to be correct! In one case, like the one you quoted, the actual stated rate looked like it was too high. However, when looking deeper it was because the loan had repaid in tranches, so not all of the cash was lent for the whole time. The actual rate quoted did appear to be correct. In another case, the actual stated rate looked to be too low. However, it was the stated loan end date that was wrong. The one stated was the scheduled end date, but the actual end date was 3 months later. There's no excuse for the sloppy use of the wrong end date, but the actual rate was correct.
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Post by Penny Pincher on Feb 20, 2024 15:12:40 GMT
Assuming this was the Shropshire hospitality venue, the Actual Interest Rate stated was 7.89%. But my calculated simple APR, using pledge date and the dates my account was credited with repayments, was 7.56%. Only when I use the loan start date (instead of pledge date) and take seven days of each of the repayment dates, does my calculation reach 7.88%.
I've always been aware of the drag between pledge and loan start but I've not noticed one between loan end and repayment, before now. I expect that some delay is inevitable and understand that these transactions cannot always be instantaneous but it feels like these drags on investor returns are longer and more frequent on CrowdProperty than on other platforms.
Am I wrong to suspect that interest on client money is a significant income for CrowdProperty?
Platforms that pay interest on cash balances get a higher trust score in my little black book.
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Post by Ace on Feb 20, 2024 15:38:26 GMT
Assuming this was the Shropshire hospitality venue, the Actual Interest Rate stated was 7.89%. But my calculated simple APR, using pledge date and the dates my account was credited with repayments, was 7.56%. Only when I use the loan start date (instead of pledge date) and take seven days of each of the repayment dates, does my calculation reach 7.88%. I've always been aware of the drag between pledge and loan start but I've not noticed one between loan end and repayment, before now. I expect that some delay is inevitable and understand that these transactions cannot always be instantaneous but it feels like these drags on investor returns are longer and more frequent on CrowdProperty than on other platforms. Am I wrong to suspect that interest on client money is a significant income for CrowdProperty? Platforms that pay interest on cash balances get a higher trust score in my little black book. You definitely won't be paid interest before the actual loan start date. The cash drag between pledge and loan start is borne by lenders. I'll happily do a full XIRR calculation if you're willing to supply the figures and dates. You could scale all of the figures by a fixed ratio if you prefer to keep the actual amounts private.
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Feb 20, 2024 15:42:36 GMT
It would be more use if it was correct. Here's one of my loans: £500 30/11/2018 22/11/2019 8% 8.00% £500 £25.10 Actual interest rate is 5% not 8% Many or most of them appear to be wrong. I've investigated a few of mine that looked wrong, but the rate turned out to be correct! In one case, like the one you quoted, the actual stated rate looked like it was too high. However, when looking deeper it was because the loan had repaid in tranches, so not all of the cash was lent for the whole time. The actual rate quoted did appear to be correct. In another case, the actual stated rate looked to be too low. However, it was the stated loan end date that was wrong. The one stated was the scheduled end date, but the actual end date was 3 months later. There's no excuse for the sloppy use of the wrong end date, but the actual rate was correct. No, I was just doing the calculation on the figures given. To get £25.10 as 8%pa on £500 it might have been repaid very early. I have not checked.
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Post by Penny Pincher on Feb 20, 2024 15:48:47 GMT
I'll happily do a full XIRR calculation if you're willing to supply the figures and dates... Be my guest, it was a minimal auto-invest pledge; 19/02/2024,£14.60,Capital Payment 19/02/2024,£2.36,Interest Payment 18/01/2024,£7.85,Capital Payment 18/01/2024,£1.17,Interest Payment 24/08/2022,£14.25,Capital Payment 24/08/2022,£0.53,Interest Payment 19/08/2022,£14.26,Capital Payment 19/08/2022,£0.53,Interest Payment 04/02/2022,£50.96,Transfer of pledged funds
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Post by Ace on Feb 20, 2024 16:32:36 GMT
I'll happily do a full XIRR calculation if you're willing to supply the figures and dates... Be my guest, it was a minimal auto-invest pledge; 19/02/2024,£14.60,Capital Payment 19/02/2024,£2.36,Interest Payment 18/01/2024,£7.85,Capital Payment 18/01/2024,£1.17,Interest Payment 24/08/2022,£14.25,Capital Payment 24/08/2022,£0.53,Interest Payment 19/08/2022,£14.26,Capital Payment 19/08/2022,£0.53,Interest Payment 04/02/2022,£50.96,Transfer of pledged funds The XIRR for those transactions is 7.62%. A bit more than the contracted 7.3%, but nowhere near the quoted Actual Interest Rate of 7.89%. I had a slightly higher stake in this loan with a virtually identical XIRR to you. Even adjusting the repayment dates by 7 days each to account for tardy repayment still only gives an XIRR of 7.71%. I'll write to CP for an explanation of how they are defining their Actual Interest Rate. I don't hold out much hope of a reply as they've ducked tricky questions in the past, but I'll give it a go.
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Post by Ace on Feb 20, 2024 16:58:26 GMT
Oops, I made a mistake in the above post (now corrected). I mistakenly used the Transfer of Pledged Funds date rather than the Loan Start Date. Sorry.
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benaj
Member of DD Central
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Post by benaj on Feb 20, 2024 17:24:09 GMT
Be my guest, it was a minimal auto-invest pledge; 19/02/2024,£14.60,Capital Payment 19/02/2024,£2.36,Interest Payment 18/01/2024,£7.85,Capital Payment 18/01/2024,£1.17,Interest Payment 24/08/2022,£14.25,Capital Payment 24/08/2022,£0.53,Interest Payment 19/08/2022,£14.26,Capital Payment 19/08/2022,£0.53,Interest Payment 04/02/2022,£50.96,Transfer of pledged funds The XIRR for those transactions is 7.62%. A bit more than the contracted 7.3%, but nowhere near the quoted Actual Interest Rate of 7.89%. I had a slightly higher stake in this loan with a virtually identical XIRR to you. Even adjusting the repayment dates by 7 days each to account for tardy repayment still only gives an XIRR of 7.71%. I'll write to CP for an explanation of how they are defining their Actual Interest Rate. I don't hold out much hope of a reply as they've ducked tricky questions in the past, but I'll give it a go. This is very interesting development after being investor since 2020. This is the transactions for my first ever loan. 17/12/2020 £796.49 Capital Payment 17/12/2020 £62.14 Interest Payment 25/08/2020 £203.51 Capital Payment 25/08/2020 £10.47 Interest Payment 24/01/2020 £1000.00 Transfer of pledged funds It turns out the XIRR for this loan is 8.7%, the actual contract rate is 8.5% However, could someone please explain why £10.47 interest is correct for 214 days since day 1 @8.5% and XIRR ends up higher?  The interest was paid 1.8% on 25/08/2020!!!
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Post by Ace on Feb 20, 2024 17:31:15 GMT
The XIRR for those transactions is 7.62%. A bit more than the contracted 7.3%, but nowhere near the quoted Actual Interest Rate of 7.89%. I had a slightly higher stake in this loan with a virtually identical XIRR to you. Even adjusting the repayment dates by 7 days each to account for tardy repayment still only gives an XIRR of 7.71%. I'll write to CP for an explanation of how they are defining their Actual Interest Rate. I don't hold out much hope of a reply as they've ducked tricky questions in the past, but I'll give it a go. This is very interest development after being investor since 2020. This is the transactions for my first ever loan. 17/12/2020 £796.49 Capital Payment 17/12/2020 £62.14 Interest Payment 25/08/2020 £203.51 Capital Payment 25/08/2020 £10.47 Interest Payment 24/01/2020 £1000.00 Transfer of pledged funds It turns out the XIRR for this loan is 8.7%, the actual contract rate is 8.5% However, could someone please explain why £10.47 interest is correct for 214 days since day 1 @8.5% and XIRR ends up higher? The interest was paid 1.8% on 25/08/2020!!! The £10.47 Interest will be for the £203.51 capital that was repaid at that time. The 214 day length will be incorrect because you have used the transfer of funds for the start date in stead of the loan start date.
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benaj
Member of DD Central
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Post by benaj on Feb 20, 2024 17:35:55 GMT
This is very interest development after being investor since 2020. This is the transactions for my first ever loan. 17/12/2020 £796.49 Capital Payment 17/12/2020 £62.14 Interest Payment 25/08/2020 £203.51 Capital Payment 25/08/2020 £10.47 Interest Payment 24/01/2020 £1000.00 Transfer of pledged funds It turns out the XIRR for this loan is 8.7%, the actual contract rate is 8.5% However, could someone please explain why £10.47 interest is correct for 214 days since day 1 @8.5% and XIRR ends up higher? The interest was paid 1.8% on 25/08/2020!!! The £10.47 Interest will be for the £203.51 capital that was repaid at that time. The 214 day length will be incorrect because you have used the transfer of funds for the start date in stead of the loan start date. What a confusion, so how much did they borrower borrow on day 1? 20.351% of the agreed amount with CP and not the 100%? and the rest of 79.649% not being utilised and still on CP's client account not earning interest?
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Post by Ace on Feb 20, 2024 17:41:23 GMT
The £10.47 Interest will be for the £203.51 capital that was repaid at that time. The 214 day length will be incorrect because you have used the transfer of funds for the start date in stead of the loan start date. What a confusion, so how much did they borrower borrow on day 1? 20.351% of the agreed amount with CP and not the 100%? and the rest of 79.649% not being utilised and still on CP's client account not earning interest? No. They borrowed the whole amount on day 1. The interest for the capital borrowed for longer is paid when that capital is repaid, I think. This loan is particularly confusing because the loan start date appears to be before the transfer of funds date (which must be impossible) !!!! I'm beginning to think that CP dates are riddled with even more errors than realised....
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benaj
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Post by benaj on Feb 20, 2024 17:55:06 GMT
I have seen plenty of interest only repayment schedule, but repaying capital only without paying the correct interest on the entire amount borrowed is something new to me. |
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The interest was paid 1.8% on 25/08/2020!!!