kaya
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Post by kaya on Nov 26, 2015 11:57:57 GMT
Personally, I agree with those who are against any option of premiums being applied.
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Post by mrclondon on Nov 26, 2015 12:02:04 GMT
This is utterly nuts. Just sold a part with 43 days remaining for 2% premium. Guaranteed loss to buyer, even before they pay tax on my "interest". Right, with such fools around I'm listing everything at "guaranteed loss" rates and will take the profits. Agree 100%. fundingsecure I'm sure you are aware the longer this goes on the more damage it is doing to your credibility.
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SteveT
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Post by SteveT on Nov 26, 2015 12:14:09 GMT
I see that a warning has now been added at the top of the page, but I don't think that is enough:
"CAUTION: purchasing an investment at a high premium, especially with a small number of days remaining, may result in the buyer getting less than their outlay when the loan completes and interest is returned."
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oldgrumpy
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Post by oldgrumpy on Nov 26, 2015 12:24:55 GMT
I've just put two parts up for sale at 2% + , just to test the system, which seems very slick (not because I actually want/need to sell them). Both have <40 days left on them (unless renewed). I trust no fool will actually jump in; angels (e.g. "you lot!") are keeping well clear.
Edit 12:27 Someone's grabbed the Lexus at 2%!
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ianj
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Post by ianj on Nov 26, 2015 12:30:55 GMT
By my reckoning, a 12% loan with 5 months remaining purchased at a 5% premium would 'wipe it's face', profit and yield = 0 The same loan at 1% premium would achieve approx 9.5% yield. A 12% loan with 1 month remaining purchased at a 1% premium would 'wipe it's face'. any higher premium would return a loss. The same loan purchased at par would return approx 11.5% yield. I've not played with the figures - what rate of tax are you assuming on the interest that the buyer is liable for? By rough maths, at 20% tax the buyer is liable to pay £1.20 tax per £100 capital on at 12% 6-month loan. If they're buying with 1 month remaining, the interest per £100 capital is £1, thus taking into account the tax liability the buyer is losing 20p per £100 capital invested. I think. My figures are all pre-tax. My intention was simply to provide a comparison with the platform's advertised PM rates, and to illustrate that an SM might not be such a positive feature if it lures the unsuspecting into making purchases without realising the consequences. Naturally, the lenders personal circumstances, combined with the tax implications highlighted by mrclondon , could make the SM even less attractive when buying at a premium.
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Post by Deleted on Nov 26, 2015 12:49:58 GMT
no discounts yet I see, will we "see" them as red or -ve do you think?
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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 Nov 26, 2015 14:03:46 GMT
no discounts yet I see, will we "see" them as red or -ve do you think? I saw one at -3% yesterday. It wasn't there long. 
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ianj
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Post by ianj on Nov 26, 2015 14:33:08 GMT
I see that a warning has now been added at the top of the page, but I don't think that is enough: "CAUTION: purchasing an investment at a high premium, especially with a small number of days remaining, may result in the buyer getting less than their outlay when the loan completes and interest is returned." I'm sure fundingsecure don't want to be seen encouraging bad habits, so maybe sales at a premium should be hidden from view, as with cigarettes at the supermarket, and only revealed if specifically requested! Second thoughts: Perhaps not, there wouldn't be anything on show! 
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SteveT
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Post by SteveT on Nov 26, 2015 14:59:52 GMT
I see that a warning has now been added at the top of the page, but I don't think that is enough: "CAUTION: purchasing an investment at a high premium, especially with a small number of days remaining, may result in the buyer getting less than their outlay when the loan completes and interest is returned." I'm sure fundingsecure don't want to be seen encouraging bad habits, so maybe sales at a premium should be hidden from view, as with cigarettes at the supermarket, and only revealed if specifically requested! Second thoughts: Perhaps not, there wouldn't be anything on show! Maybe there should be warnings emblazoned on the front of each part: "Paying premiums can seriously damage your wealth"
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ablender
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Post by ablender on Nov 26, 2015 15:41:37 GMT
I'm sure fundingsecure don't want to be seen encouraging bad habits, so maybe sales at a premium should be hidden from view, as with cigarettes at the supermarket, and only revealed if specifically requested! Second thoughts: Perhaps not, there wouldn't be anything on show! Maybe there should be warnings emblazoned on the front of each part: "Paying premiums can seriously damage your wealth" And possibly your health.
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Post by fundingsecure on Nov 26, 2015 16:04:58 GMT
To help potential purchasers make the correct decisions we have now added an extra field - showing the effective rate of return if you purchase on the secondary market.
It remains the choice of the seller whether to ask a high premium and the buyer's choice whether to pay it.
FundingSecure
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SteveT
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Post by SteveT on Nov 26, 2015 16:12:39 GMT
To help potential purchasers make the correct decisions we have now added an extra field - showing the effective rate of return if you purchase on the secondary market. It remains the choice of the seller whether to ask a high premium and the buyer's choice whether to pay it. FundingSecure Nice work. That's immediately shown up the 120+ parts listed for sale at prices GUARANTEED to lose money (let alone the next 200+ that make very little). Some reality hopefully should now start being applied ...
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ablender
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Post by ablender on Nov 26, 2015 16:13:19 GMT
To help potential purchasers make the correct decisions we have now added an extra field - showing the effective rate of return if you purchase on the secondary market. It remains the choice of the seller whether to ask a high premium and the buyer's choice whether to pay it. FundingSecure Perhaps, but there should be a minimum where negative yields are not allowed. I think you are responsible for this since you control the platform.
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SteveT
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Post by SteveT on Nov 26, 2015 16:14:52 GMT
The next enhancement would be some finer options on setting premiums (and perhaps an absolute cap at +2%). 0.25% intervals would be a good compromise I think.
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Post by fundingsecure on Nov 26, 2015 16:19:48 GMT
The market remains free and open.
It is perfectly reasonable for someone to purchase even at a small loss, if by doing so they could be able to roll over into a renewed loan with a longer term aim in mind.
We are not promoting this - but it remains an option
Naturally we would expect those loans offered for sale with a high negative return to disappear as it is very unlikely that anyone would purchase..
FundingSecure
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