ribs
Probably not James Marshall
Posts: 148 
Likes: 151
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6.1%?
Oct 25, 2015 12:29:42 GMT
Post by ribs on Oct 25, 2015 12:29:42 GMT
So I dipped my toe with the minimum investment this month. I'm pleased to see my money has been loaned. However, can anyone explain why it's at 6.06%, and not the 6.1% currently advertised on the website? This was the rate advertised when my money was loaned out as well. Advertised:  Actual:  |
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pom
Member of DD Central
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6.1%?
Oct 25, 2015 16:17:50 GMT
Post by pom on Oct 25, 2015 16:17:50 GMT
6.06 to 1 dec place is 6.1% so it's "just" down to rounding I think. (I think I previously had 6.18 instead when 6.2 was the headline rate). As to why they're using 2dps in some places, 1 in others....I have no idea! Edit: just looked at my loans and I have some 6.06, 6.08, 6.18, 6.29 and 6.61 so it would appear to be quite common - only 6.4 seems to really be exactly 6.4 Any comment Matthew ? |
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ribs
Probably not James Marshall
Posts: 148
Likes: 151
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6.1%?
Oct 25, 2015 19:20:56 GMT
Post by ribs on Oct 25, 2015 19:20:56 GMT
6.06 to 1 dec place is 6.1% so it's "just" down to rounding I think Probably, but I don't believe banks are allowed to advertise 6.1% if it's actually 6.06%. Whilst I appreciate the products are very different, I would expect Lending Works to operate in the same way. I don't care that it's 6.06% per say, that's a fine return for the level of risk that I perceive to be involved in here, but I'm not terribly thrilled to being mislead in this fashion. If it's 6.06%, just say so.
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6.1%?
Oct 26, 2015 21:57:38 GMT
Post by Matthew on Oct 26, 2015 21:57:38 GMT
Hi ribs/ pomThere is certainly no intention to mislead - the rates are stated to 1dp on the website which is consistent with how rates are displayed across most of the industry. The annualised return is a compounded rate based on the underlying base rate on each loan contract, so is not a 1dp number. Therefore, you'll have loan contracts at 6.05% and 6.14% both showing as 6.1%. You are right that there should be consistency throughout the site, and I'll have this changed in your My Loans screen, but hopefully you can see that there is no intention to be anything other than transparent. Even if we stated 6.06% we'd likely get queries as to why the actual rate is 6.055%. The annual return is also not an exact science as it assumes your money (and repayments) are constantly on loan for the full period - any time waiting for reinvested repayments to re-match would impact your return ever so slightly, and if the rates go up your return would be higher than advertised. Hope this helps. |
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