tony
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Post by tony on Jul 2, 2015 20:42:07 GMT
I notice that many loans on various platforms are fully subscribed within minutes of their being listed and I am wondering if investors leave money in their platform's account, earning nowt, so that it is there ready to fund a new loan. I know that some platforms allow you to pledge money in advance and that others allow you a few hours to transfer money in but most want your lolly immediately. Even using the banks "faster payments" transfer you are often too late to secure a part loan and that leaves you with dead money lodged with the platform not earning interest. If it is a sizeable amount you need to go through the process of withdrawing it so that you can invest it elsewhere.
Any thoughts on this?
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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 Jul 2, 2015 21:52:31 GMT
I notice that many loans on various platforms are fully subscribed within minutes of their being listed and I am wondering if investors leave money in their platform's account, earning nowt, so that it is there ready to fund a new loan. I know that some platforms allow you to pledge money in advance and that others allow you a few hours to transfer money in but most want your lolly immediately. Even using the banks "faster payments" transfer you are often too late to secure a part loan and that leaves you with dead money lodged with the platform not earning interest. If it is a sizeable amount you need to go through the process of withdrawing it so that you can invest it elsewhere.
Any thoughts on this? Very much depends on the platform. In my case its generally as follows. Im small time so the sums generally involved a relatively modest. AC - funds from repayments/ redemptions left on platform as SM whittles these down fairly quickly with the odd large bite from new drawdowns. Not had to top up for months. SS - instant deposit so any repayments/redemptions withdrawn immediately if no current ops as funds for new loans instantly available MT - depends on current loan flow, if loans pending with a week then funds left and topped up 30mins before launch, if nothing pending account emptied once reasonable amount, generally wwekly FS - minimal balance held for flash jewellery loans, otherwise similiar to MT with funds left if loans pending and topped up 30mins before but withdrawn if balance too higher compared to forthcoming ops FC - just reinvesting repayments/sales in CB property so left on platform. AB - reinvested on SM if suitable ops, or withdrawn as again credit is instant All other accounts RS, ZP, FK, Well, have cash withdrawn regularly or on loan redemption as Im in rundown so minimal balances.
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upland
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Post by upland on Jul 3, 2015 7:16:20 GMT
I suppose that it reflects that there is more money currently chasing too few borrowers.
Uninvested cash can certainly reduce those good returns to something more pedestrian. I used to have that with Zopa years ago.
I like the way with AC that you can set targets for several loans but do not need all the cash to be there. I top up my FC account regularly with enough to do what I want , it is now of a size that this is only a small problem.
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Post by lynnanthony on Jul 3, 2015 19:32:11 GMT
I suppose that it reflects that there is more money currently chasing too few borrowers. Uninvested cash can certainly reduce those good returns to something more pedestrian. I used to have that with Zopa years ago. I like the way with AC that you can set targets for several loans but do not need all the cash to be there. I top up my FC account regularly with enough to do what I want , it is now of a size that this is only a small problem. Personally, I accept dead time as just one of those things. In my experience on average I have about one months dead time per loan. One months dead time on a 12% 12 month bridge brings the bottom line down to approx 11%. One months dead time on a 5 year loan at 10% brings it down to approx 9.85%. Neither of those are pedestrian rates. On AC you can set all the targets you like but it doesn't mean they'll be filled. If you want a decent chunk of a loan you need to have the money there ready to fund it when it draws down otherwise you risk just getting shrapnel slowly building up. So in answer to the OP, yes, I for one leave money in AC sufficient to cover any targets set for upcoming loans. Again personally, my priority in P2P is to get into the loans that I like, not to worry about (possibly) gaining a few hundredth of a percent interest by leaving money in a high earning (sic) savings account for a few days.
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tony
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Post by tony on Jul 4, 2015 7:54:46 GMT
If I understand you correctly, you leave any money made available because a loan has been repaid, or which you have withdrawn, in your holding account for a period of one month so that it is available for re-investment when a new loan is listed. That seems to make good sense if you do it for all platforms which you use. However, it does not provide a solution to the problem of getting funds quickly into a new loan offered by a platform which is new to you which is why I wish all platforms would allow you a time period to transfer money in - the only ones I know which do this are SavingsStream and CrowdProperty but no doubt there are others.
If, like me, your savings are limited, it is worth noting that if, say, you have £100 dead money held in each of ten platforms holding account, you have a total of £1000 not earning interest which could be earning about 12% equalling £10/month.
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Post by lynnanthony on Jul 4, 2015 9:49:08 GMT
If I understand you correctly, you leave any money made available because a loan has been repaid, or which you have withdrawn, in your holding account for a period of one month so that it is available for re-investment when a new loan is listed. That seems to make good sense if you do it for all platforms which you use. However, it does not provide a solution to the problem of getting funds quickly into a new loan offered by a platform which is new to you which is why I wish all platforms would allow you a time period to transfer money in - the only ones I know which do this are SavingsStream and CrowdProperty but no doubt there are others.
If, like me, your savings are limited, it is worth noting that if, say, you have £100 dead money held in each of ten platforms holding account, you have a total of £1000 not earning interest which could be earning about 12% equalling £10/month.
Personally I would not invest on ten platforms, far to complicated and time consuming to track. I invest on four and of those two get the lion's share. Re: Your £1000 which you say could be earning 12%. Where? If it could be earning 12% it should be doing so, not sitting earning nothing! My dead money is money that would otherwise be in my current account or an instant access account earning a pittance.
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tony
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Post by tony on Jul 4, 2015 10:09:54 GMT
SavingsStream offer 12% and also allow you time to transfer money into a new part loan. Originally I invested in only this platform but then, following the advice of more experienced P2P investors who post on this forum, I diversified into five platforms each with several loan parts funded. I agree with you, it is quite time consuming keeping track of them all which is not made easier because they all operate in a different way. SavingsStream is so very simple to understand and operate but I am a little concerned about their poor communications and their growing tendency to readily offer extensions to borrowers leaving one never knowing when they will get repaid. OK whilst the secondary market is so active, enabling loan parts to be sold quickly, but that situation could change albeit not yet awhile.
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SteveT
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Post by SteveT on Jul 4, 2015 11:08:05 GMT
I have live accounts with 10 platforms but my new lending these days is focussed on 5 of them: FC (now there's some fun to be had again), SS, MT, AR and AC. 4 others are in "run-down" or "only if something interesting crops up" mode. I'm undecided what to do about ReBS now that FC is playing in the same "Russian Roulette lending" space (and doesn't take several weeks to auction and draw down a new loan) so it's on a watching brief.
With FC I keep a decent cash balance (5% or so) to allow me to pick up the most attractive loans when they appear (might be 1 the first week, might be 15 the next) and do a bit of gentle fishing for early closers. In an "emergency" I can top up my personal account quickly by debit card but FC don't permit this for company accounts so I have to think 24 hours ahead for cash transfers.
SS needs no cash balance to be kept as you've got 24 hours to transfer in funds.
MT responds so quickly to new funds transfers (I think my fastest was about 30 seconds, typically 5-10 minutes) that I just check I've enough on the day of a new loan listing.
AR accepts debit cards (company debit cards included) so that's a doddle.
With AC I try to keep enough cash waiting to be lent to cover the next projected new loan drawdown (or 2 if they are likely to be close) and a bit for shrapnel purchases.
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