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Post by batchoy on Mar 9, 2015 20:23:58 GMT
batchoy - to quote from our terms and conditions, "If you wish to exit your Loan (or part of it) before the end of the Loan term, Unbolted may allow you to offer to transfer your Loan to other Lenders on the platform as a Secondary Loan". We certainly do not commit to offering a secondary market on our loans although we will endeavour to offer one soon. Funny that because I can quote your Ts&Cs as well: "7.8.2. Secondary lending: This refers to funding of existing Loans or parts of Loans that existing Lenders wish to exit ("Secondary Loans"). You can select the amount you wish to commit to a Secondary Loan. As soon as you commit funds to a Secondary Loan on terms accepted by the existing Lender, your Unbolted account will be debited and your monies will be lent on the next business day (one day settlement period). Unbolted acting as agent for you, the original Lender and the Borrower, shall effect the cancellation of the original Loan and the entry into a new Loan Agreement between you and the Borrower with the effect that the burden and benefit of the original Loan Agreement is transferred to you. We shall arrange for the payment of any premium attaching to the transfer, as set out in the transaction particulars, between you and the original Lender." "12.2. On every loan transferred, a transaction fee of up to 0.5% of the total loan part sold may be charged by Unbolted to cover administration costs. 12.3. Loans on the platform cannot be put up for sale at a premium to the total amounts owed to the Lender under the Loan, including interest, as at the date of the sale. 12.4. Unbolted retains the right to set the minimum value (as a percentage of total amounts owed on the Loan to the Lender as at the date of the sale) at which Loans can be reassigned on the platform." Reads like a secondary market to me with a 0.5% fee and no premiums.
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Post by ashwinp on Mar 11, 2015 18:28:15 GMT
james - in response to your questions, 1. Money laundering checks: We use industry standard electronic verification processes and comply with all applicable AML rules. 2. Credit broker regulations Unbolted operates an electronic platform that facilitates P2P lending and is not a credit broker. "There is a new regulated activity that covers the facilitation of lending and borrowing through electronic platforms (P2P platforms). This activity is called 'operating an electronic system in relation to lending'." (http://www.fca.org.uk/firms/firm-types/consumer-credit/regulation/scope-regimes) 3. Upfront fee charged to borrowers: The fee is added to the loan and not deducted from the cash promised to the borrower. The important distinction here is the borrower receives the amount promised and unlike some of our competitors, the cash received is not reduced by what is promised as loan in the discussions leading up to the agreement. 4.Clarifications on credit card blog: While it is true that delinquency and charge-off rates on credit cards have fallen with the economy recovery recently, a more appropriate representation here would be 'through the cycle' charge-off rates on credit cards which is between 6%-8%. See chart 2 in the S&P report on credit card ABS which excludes the riskiest debts for charge-off statistics. (http://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&assetID=1245369984564). The annualised default rate is between 8%-10% of outstanding balance after factoring in recovery on default. When expressed as a percentage of accounts, the through the cycle default rate is c10%. About 40% of balances are paid off in full every month but that includes many accounts that were not paid in full the previous month. These are essentially borrowers who are clearing off their debt. The proportion of accounts that pay off in full month after month ('perpetual transactors') who are not very profitable for credit card companies are not more than 10%-20%. While it is true that about 40% of balances outstanding are not bearing more than 0% interest, it is key to note that they are not all non-interest bearing. This is because of the massive push of 0% balance transfer promotions by the credit card companies, taking advantage of the low interest rate risk regime. These promotions are done with the expectation that the majority of customers will continue to have balances after the promotional period expires. Refer the excel in the attached BBA report for historical % of interest bearing balances which is closer to 70%-75%. (https://www.bba.org.uk/news/statistics/credit-card-market/november-2014-credit-card-market/#.VQCBFFOsU2Y) batchoy - the sections you quote are the relevant terms if and when we allow secondary transactions on the platform. As per the section I quoted earlier, we have made no commitment to offer such a market. --
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