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Feb 27, 2015 18:06:39 GMT
Post by p2plender on Feb 27, 2015 18:06:39 GMT
People can borrow money for 5 years from other organisations cheaper than rates currently on offer at RS???
Sainos and Hitachi were near 4% not long back.
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Surely
Feb 27, 2015 20:59:17 GMT
Post by robinshould on Feb 27, 2015 20:59:17 GMT
This has been a bit of a mystery to me for some time. If you go on any of the comparison sites for a £5K or £15k loan you will find Ratesetter a very long way down the list of the best deals for the borrower. However if you want a 5 year £1k loan it is top of the list ( together with ZOPA). Ratesetter get very good reviews from those borrowers who get accepted for a loan so are people prepared to pay more for the convenience of ratesetter?? Right now there is huge demand on the 5 year market for ratesetter. How are they doing it? p.s. I'm not complaining having lent at 6.7% this evening, but I'm just starting to wonder.
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Surely
Feb 27, 2015 23:05:43 GMT
Post by uncletone on Feb 27, 2015 23:05:43 GMT
Never look a gift horse in the mouth. Never give a sucker an even break.
Good grief, I'm getting cynical realistic in me old age....
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Surely
Feb 27, 2015 23:30:56 GMT
Post by davee39 on Feb 27, 2015 23:30:56 GMT
The super cheap loans only have to go to a proportion of applicants. Many will be credited as higher risk and charged significantly higher rates. There has been endless discussion about RS borrowers - I suspect they are not all going to be A**. Furthermore HP and similar deals from retailers and motor dealers are still at the 15 - 30% APR level, and an eye-watering 50 to 60% at some lenders/rent to buy stores.
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Surely
Feb 28, 2015 8:00:34 GMT
Post by GSV3MIaC on Feb 28, 2015 8:00:34 GMT
Not to mention credit card rates, which are another low hassle / high cost option.
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Surely
Feb 28, 2015 8:45:34 GMT
Post by p2plender on Feb 28, 2015 8:45:34 GMT
This has been a bit of a mystery to me for some time. If you go on any of the comparison sites for a £5K or £15k loan you will find Ratesetter a very long way down the list of the best deals for the borrower. However if you want a 5 year £1k loan it is top of the list ( together with ZOPA). Ratesetter get very good reviews from those borrowers who get accepted for a loan so are people prepared to pay more for the convenience of ratesetter?? Right now there is huge demand on the 5 year market for ratesetter. How are they doing it? p.s. I'm not complaining having lent at 6.7% this evening, but I'm just starting to wonder. Yes I do wonder if borrowers are driven by the fact they can have cash much quicker with RS than other institutions for their 'new wheels' or whatever. Anyway my lending rate is still stuck at a mean 5.8% so long may these rates stay. 6% average would be nice.
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Surely
Feb 28, 2015 8:52:41 GMT
Post by p2plender on Feb 28, 2015 8:52:41 GMT
www.moneysupermarket.com/loans/calculator/a few percent doesn't change monthly payments a great deal so if someone desperate for 'new wheels' then a few extra quid a month on a 10k loan isn't going to be a deal breaker. Of course very different for our 'super borrowers' whoever they may be.
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ikorodu
Member of DD Central
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Surely
Feb 28, 2015 12:25:01 GMT
Post by ikorodu on Feb 28, 2015 12:25:01 GMT
I too am confused by this.
I did a quick search on a comparison web site.
One could get a £10k loan over 5 years from zopa with an APR of 3.8. Rate setter offer 8.7% APR for the same loan
If one was to get the zopa loan the total amount repayable would be £10952.35. Compared with £12,272.71 for RS.
Invest the £10k from zopa loan with RS at 6.5% (no reinvesting) would give at total returned of £11739.69. Making a profit of £787.
As a borrower, why go to RS? Who knows, but still they come! Would be interesting to know how many of the individual loans come from 'resellers' like commuter club or giff gaff. I doubt many come from price comparison sites!
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Post by westonkevRS on Feb 28, 2015 15:24:57 GMT
www.moneysupermarket.com/loans/calculator/a few percent doesn't change monthly payments a great deal so if someone desperate for 'new wheels' then a few extra quid a month on a 10k loan isn't going to be a deal breaker. Of course very different for our 'super borrowers' whoever they may be. Bank of England figures estimate that total consumer gross lending monthly is around £6b. This excludes mortgages, but includes loans, HP, credit cards, mail order, etc. I don't know the exact breakdown, but lets say £2b in New gross monthly loans. The monthly loan values sourced through MSM is not published to my knowledge (unless it's hidden in their annual reports) but I'd estimate it's no more than £50m, perhaps £100m at a stretch. That means MSM controls just 5% of consumer loan lending, an estimate I think at the top end (my gut experience thinks it'll actually be closer to 1%). The total comparison web site market might be double this. So although MSM is a fantastic channel with good quality lower than average risk customers (i.e. they are conscientious loan takers getting the best deal), it is not a dominant driver of UK consumer lending. Lenders just looking at the best buy comparison tables are only looking at and thinking about how 1-2% of UK consumer non-mortgage lending is sourced. Think bigger! Also in 2014 it was estimated that the P2P lenders made up perhaps 3% of total lending. The competition is not each other, it's the 97%.... westonkevRS
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c88dnf
Member of DD Central
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Feb 28, 2015 15:27:14 GMT
Post by c88dnf on Feb 28, 2015 15:27:14 GMT
I too am confused by this. (snip) As a borrower, why go to RS? Who knows, but still they come! Baffles me too. I can only suggest two reasons. 1) Zopa are turning down creditworthy people that Ratesetter accept. (*) 2) Zopa have made the borrowing process as bad as their lending process, so borrowers get fed up and go elsewhere. (*) When first experimenting with P2P 3 years ago, I wanted to see what Zopa borrowers experienced when applying for a loan, so tried to apply for one. I was turned down flat because I was retired, without any follow-up enquiry about my financial circumstances. I haven't tried to apply for a Ratesetter loan.
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Surely
Feb 28, 2015 17:27:08 GMT
Post by westonkevRS on Feb 28, 2015 17:27:08 GMT
This isn't about RateSetter and Zopa, we aren't challenging is each other - although comparing each other is an easy P2P metric and is natural for the more competitive amongst us. 97% (my estimate) of consumer lending is done by other non-P2P financial services firms via a variety of channels and sources, for different purposes and risk profiles. Why would be fight and compete against each other over the scraps, when there is a huge market for us to disrupt. westonkevRS
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Post by moneyball on Feb 28, 2015 20:44:42 GMT
Not to mention credit card rates, which are another low hassle / high cost option. Not high cost... if you know what you're doing.
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ikorodu
Member of DD Central
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Feb 28, 2015 22:43:52 GMT
via mobile
Post by ikorodu on Feb 28, 2015 22:43:52 GMT
I understand what westonkev is saying re zopa. I only chose them as a comparison as they offered a good rate not because they were p2p. Perhaps I should have picked m&s as the comparison.
I just am really surprised by the amount that RS lend at high rates when lower rates are available elsewhere. I guess many people do not shop around too much. Or maybe they stop looking when they get what they think is a good deal. But to me a £10k personal loan over 5 years at 8%apr is not a good deal when you can get less than half that rate. But clearly many people think it's a deal or they wouldn't be borrowing my money!
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Post by uncletone on Feb 28, 2015 23:10:09 GMT
There are people who think it sane to save in an instant access account which pays 0.05% interest. £25 a year return on £50K. I assume they exist, because the account does. There's no explaining people....
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spiral
Member of DD Central
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Post by spiral on Mar 1, 2015 12:04:25 GMT
There are people who think it sane to save in an instant access account which pays 0.05% interest. £25 a year return on £50K. I assume they exist, because the account does. There's no explaining people.... Or even why do people stick with the same insurance companies or energy companies. If people want to do that, that's fine by me. If everyone went to the cheapest, they wouldn't need to be the cheapest anymore so I would end up paying more.
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