paulgul
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Post by paulgul on Apr 1, 2015 7:49:12 GMT
I notice the loan awaiting activation (number .....7336) is still around 50k short of target and has now passed its end date - what happens now, does the end date get extended or does the loan fall through and investors get their money returned?
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bugs4me
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Post by bugs4me on Apr 1, 2015 10:00:54 GMT
I notice the loan awaiting activation (number .....7336) is still around 50k short of target and has now passed its end date - what happens now, does the end date get extended or does the loan fall through and investors get their money returned? From the FS website relating to this loan -
UPDATE AS OF 30/3/2015
Note that interest will be paid from 31.03.2015 regardless of drawdown date.
In the event of the loan being short of funding at the drawdown date, the borrower has confirmed they will still proceed
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mikes1531
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Post by mikes1531 on Apr 1, 2015 11:28:20 GMT
I notice the loan awaiting activation (number .....7336) is still around 50k short of target and has now passed its end date - what happens now, does the end date get extended or does the loan fall through and investors get their money returned? Further to what bugs4me wrote about this specific loan, the more general situation is variable. Sometimes the end date is extended, especially when the borrower doesn't have a specific date by which time they need the funds. Sometimes, as in this case, the borrower decides they can manage with a smaller loan. If the funding gap is large, and the borrower needs the full amount, FS may be able to arrange for an underwriter to supply the additional funds required. (I'm not convinced that's really 'underwriting', since that person is stuck with the loan for its whole duration. That's really just a case of finding another investor to take the remaining part of the loan.) I can't remember if FS ever have had to cancel a potential loan because of lack of funds, but I've certainly seen it happen on other P2P platforms. It's a case of matching supply with demand, and not bringing forward more loans than their investors are willing, and able, to fund. So far, FS have been pretty successful at funding all the loans they've brought forward.
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paulgul
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Post by paulgul on Apr 1, 2015 15:18:45 GMT
Thanks mikes1531 for the detailed explanation, I must admit I missed the update on the loan I quoted but it's good to have an idea what might happen on future loans that don't meet their target. |
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