nick
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Post by nick on Dec 4, 2015 0:09:38 GMT
I feeling lazy - has anyone got an effective rate calculator so you can work out the effective rate on the loans you list at a premium? I assume you cannot see your own loans on the loans for sale listings and determine the effective rate after you have listed?
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SteveT
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Post by SteveT on Dec 4, 2015 8:07:33 GMT
I feeling lazy - has anyone got an effective rate calculator so you can work out the effective rate on the loans you list at a premium? I assume you cannot see your own loans on the loans for sale listings and determine the effective rate after you have listed? You can see your own listings and they are very helpfully highlighted in blue. That said, most of my loan parts have only 2 possible premium options: sell more or less instantly (0%), unlikely ever to sell (1%). There needs to be some finer premium settings (0.25% intervals at least).
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nick
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Post by nick on Dec 4, 2015 8:51:57 GMT
You can see your own listings and they are very helpfully highlighted in blue. That said, most of my loan parts have only 2 possible premium options: sell more or less instantly (0%), unlikely ever to sell (1%). There needs to be some finer premium settings (0.25% intervals at least). Thanks guys. I see that the 1% granularity on mark-up is a nonsense on such short dated loans. However, selling at par in month 5 on 12%pa loan and avoiding being charged income tax on the interest is worth 4%pa net if your are a higher rate tax payer so maybe thats the way to go.......
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Dec 4, 2015 10:46:44 GMT
That said, most of my loan parts have only 2 possible premium options: sell more or less instantly (0%), unlikely ever to sell (1%). There needs to be some finer premium settings (0.25% intervals at least). Thanks guys. I see that the 1% granularity on mark-up is a nonsense on such short dated loans. However, selling at par in month 5 on 12%pa loan and avoiding being charged income tax on the interest is worth 4%pa net if your are a higher rate tax payer so maybe thats the way to go....... I'm thinking we need non-linear steps like 0%,0.1%,0.25%,0.5%,1%,1.5%,2%,3%.
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Post by betterthanworking on Dec 4, 2015 12:29:05 GMT
Thanks guys. I see that the 1% granularity on mark-up is a nonsense on such short dated loans. However, selling at par in month 5 on 12%pa loan and avoiding being charged income tax on the interest is worth 4%pa net if your are a higher rate tax payer so maybe thats the way to go....... I'm thinking we need non-linear steps like 0%,0.1%,0.25%,0.5%,1%,1.5%,2%,3%. ***Strongly agree***
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mikes1531
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Post by mikes1531 on Dec 4, 2015 22:54:09 GMT
The introduction of the SM has affected the funding needs of lenders' accounts. In the past, there's been no need to leave funds sitting idle in our accounts because we knew when the next loan would become available and there was nothing the money could be used for until then. (For complete accuracy, yes, there was the occasional loan that might appear unannounced, so it was appropriate to have £25 available, but that was all.) Now, however, a part of a loan that we'd like to have might appear on the SM at any time, and we'd need to have funds available in order to buy it before someone else does. So we either need to leave funds idle in our accounts 'just in case', or we need to be able to fund our accounts relatively quickly. My question for fundingsecure, therefore, is whether they have considered this new situation and, if so, whether they have any plans in place to address this issue? This is particularly a problem at the weekend, such as now. There have been a few parts appearing on the SM this evening priced at par -- there are three now as I write this -- all showing relatively attractive returns. Without having left some cash sitting idle in their accounts, investors who would like to buy those parts will be frustrated by their inability to act. Have FS increased their efforts to check the website more frequently for deposit notifications and deposits during non-office hours than they have done in the past? |
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stevio
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Post by stevio on Dec 4, 2015 23:29:20 GMT
The introduction of the SM has affected the funding needs of lenders' accounts. In the past, there's been no need to leave funds sitting idle in our accounts because we knew when the next loan would become available and there was nothing the money could be used for until then. (For complete accuracy, yes, there was the occasional loan that might appear unannounced, so it was appropriate to have £25 available, but that was all.) Now, however, a part of a loan that we'd like to have might appear on the SM at any time, and we'd need to have funds available in order to buy it before someone else does. So we either need to leave funds idle in our accounts 'just in case', or we need to be able to fund our accounts relatively quickly. My question for fundingsecure , therefore, is whether they have considered this new situation and, if so, whether they have any plans in place to address this issue? This is particularly a problem at the weekend, such as now. There have been a few parts appearing on the SM this evening priced at par -- there are three now as I write this -- all showing relatively attractive returns. Without having left some cash sitting idle in their accounts, investors who would like to buy those parts will be frustrated by their inability to act. Have FS increased their efforts to check the website more frequently for deposit notifications and deposits during non-office hours than they have done in the past? Or introduce a instant debit card deposit system (overcoming needing funds to be sat idle and also allows funds to be immediate available)
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Post by fundingsecure on Dec 5, 2015 13:05:12 GMT
Mikes1531,
In direct answer to your question:
Currently loans at or below £1,000 are not pre-announced. This also applies to any postings on the secondary market as we have no control over when this occurs. They can be posted at anytime - especially relevant as we have a sizeable number of overseas investors who are active at what would normally be considered to be unsociable hours. For these unannounced loans we would recommend leaving a small balance in your account if you wish to "always be ready" when a loan is posted.
We will continue to handle both deposits and withdrawals out of hours, when the necessary authorised staff are available. As our platform continues to grow, both the number of staff and the hours worked are increasing which will help somewhat, but we cannot guarantee actioning any out-of-hours requests within a specific time.
Stevio
We have looked at options involving debit cards but have decided not to implement currently for two main reasons:
1) We took a decision early on to keep all bank movements entirely separate from the website, to add an extra level of security. All bank transactions are handled separately by an authorised member of staff following verifcation.
2) As I am sure you are aware debit card deposits can be reversed by requesting a chargeback. In discussion with other platforms this has been an increasing problem, although not, so far, affecting all of them.
We have therefore decided, for the moment, not to offer this facility.
FundingSecure
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r00lish67
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Post by r00lish67 on Dec 7, 2015 10:14:46 GMT
Going back to the tax question, if we really are to be liable for any applicable tax on interest earnt on SM purchases prior to holding them (which still seems really very odd to me to be honest) could the 'interest already earnt' exposure be noted somewhere on the loan part and a note added to reflect this situation perhaps? I was very familiar with the dangers of premiums and their effect on returns with experience elsewhere, but would never have guessed this tax danger had I not read this thread, until presented with a rather unpleasant tax statement of course.
Unless someone happens to be selling off a really new loan part at par or less, I just can't see that the SM is going to be enough of a draw for me with this tax structure in place. I'd certainly otherwise nab a slice of the italian books on there right now at par, but I'm not keen on paying the majority of the tax for someone else's prior 'capital gain'.
I suppose I'm moaning partially because i'm late to the FS party and don't have any loan parts to sell to profit from. But, really!
Grumble, grumble...
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oldgrumpy
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Post by oldgrumpy on Dec 7, 2015 10:33:08 GMT
"...I'd certainly otherwise nab a slice of the italian books on there right now at par, but I'm not keen on paying the majority of the tax for someone else's prior 'capital gain'....
Ditto. Can FS clarify exactly what is actually happening here. I will not use the secondary market to pay someone else's tax. Thank you.
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ablender
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Post by ablender on Dec 7, 2015 11:38:13 GMT
If I am paying tax on some amount of money, then I have the right to earn that money - - therefore it should not be added to the price of the loan sold on SM.
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kaya
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Post by kaya on Dec 7, 2015 15:27:22 GMT
Regarding the overall question...5% premiums are a joke. Suggest 2% max. 1% increments are a joke. Suggest 0.1% increments. Personally, I'd scrap premiums altogether, and if the primary market clogs up with flippers - which it will - then I doubt I'll be bothering with FS anymore.
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Post by mrclondon on Dec 7, 2015 16:35:06 GMT
As any long standing reader of the forums will know, I am fundamentally opposed to the use of premiums on secondary markets. I know there are one or two posters that argue that an inability to re-value a loan at a lower yield to the issuing platform is an infringement of their human rights, but the vast majority of lenders oppose premiums as they create an opportunity for flippers. A key selling point for p2p over the years has been the fact that it cut out some of the middlemen each requiring their cut of the yield. But what do p2p secondary market premiums do ? ... yes, they introduce a market-maker middleman who buys on the primary and then sells on the secondary taking a cut of the yield. The fact that I am fundamentally opposed to premiums does not, however, mean I won't participate in such flipping behaviour myself as and when opportunities arise. Last Thursday I bid on and received a slice of the Industial wrapping machine loan, which as soon as it was allocated I listed on the SM with a 2% premium (that loan being far too risky for me to hold it for a moment longer than necessary). It sold this morning, 4 days after it went live on the PM. A profit of 3.16% over 4 days (2% premium plus the first months interest accrues immediately) ... or on an annualised basis 288% yield, tax free (allegedly) fundingsecure , would you please explain how you feel that allowing me to make a 288% return (annualised) is justifiable.
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oldgrumpy
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Post by oldgrumpy on Dec 7, 2015 16:39:02 GMT
mrclondon 288%? Not quite Wongaloid, but it does go to show! 
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webwiz
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Post by webwiz on Dec 7, 2015 16:43:37 GMT
The fact that I am fundamentally opposed to premiums does not, however, mean I won't participate in such flipping behaviour myself as and when opportunities arise. Last Thursday I bid on and received a slice of the Industial wrapping machine loan, which as soon as it was allocated I listed on the SM with a 2% premium (that loan being far too risky for me to hold it for a moment longer than necessary). It sold this morning, 4 days after it went live on the PM. A profit of 3.16% over 4 days (2% premium plus the first months interest accrues immediately) ... or on an annualised basis 288% yield, tax free (allegedly) fundingsecure , would you please explain how you feel that allowing me to make a 288% return (annualised) is justifable. The point is that some poor sucker who is not as savvy as you has bought a poor investment. What is the point of allowing rubbish offers even if there are naive buyers willing to buy them?
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