matt
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Post by matt on Nov 29, 2015 20:56:18 GMT
In a recent email, LendingCrowd give notice that the Loan Part Sale Fee will be increasing from 0.25% to 0.5% with effect on 3rd December.
Personally, I am not convinced this is a positive step when other platforms appear to be dropping secondary market fees, but was wondering whether any forum members had an opinion on this?
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ablender
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Post by ablender on Nov 29, 2015 22:39:54 GMT
When was this email sent?
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matt
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Post by matt on Nov 29, 2015 23:29:00 GMT
When was this email sent? Yesterday, in an email entitled "Latest News from LendingCrowd".
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SteveT
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Post by SteveT on Nov 30, 2015 7:49:30 GMT
It seems daft to me. I can't believe LC will make any more money as a result since SM activity will reduce considerably. But the bigger effect will be on PM auctions where lenders will likely bid only what they're happy to hold long-term rather than starting with more and reducing via the SM later. With no opportunity to charge a premium and a 0.5% fee for selling, why would anyone want to buy any more than they need?
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arbster
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Post by arbster on Nov 30, 2015 7:58:52 GMT
It seems daft to me. I can't believe LC will make any more money as a result since SM activity will reduce considerably. But the bigger effect will be on PM auctions where lenders will likely bid only what they're happy to hold long-term rather than starting with more and reducing via the SM later. With no opportunity to charge a premium and a 0.5% fee for selling, why would anyone want to buy any more than they need? The reduced SM activity will have an effect on new lenders too, as the opportunity to diversify quickly will be impaired, although I imagine the large investors in LC will still be happy to offload some of their low-rate investments - I don't imagine they're pleased with another 0.25% levy though. Perhaps lendingcrowd could provide some details on the rationale for the move, which certainly goes against the general trend right now.
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ablender
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Post by ablender on Nov 30, 2015 9:26:46 GMT
I thought about this and I am agree with what is being said. I was doing multiple biddings - yes not huge amounts but still more than I was thinking of holding. This will straighten me up - stick to the basics - one bid per loan. In the long term I will observe how this effects the platform and act accordingly.
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ablender
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Post by ablender on Nov 30, 2015 9:29:12 GMT
Another thought. Will this increase apply to everyone? People like s*******r, bidding sometimes past 50% of the whole loan - I suppose that he will need to sell some of it on the SM. Will he be charged 0.5% or is he exempt?
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registerme
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Post by registerme on Nov 30, 2015 10:46:48 GMT
Yep, I agree with all of the thoughts above. Lending Crowd's issue at the moment seems to be attracting enough lenders. I can't see how increasing the SM sale fee will help this (in fact, quite the reverse), and I can see that it will generate much revenue. Colour me curious as to the rationale.
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stevio
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Post by stevio on Nov 30, 2015 10:54:02 GMT
Guess the idea is to retain those from the recent promotions and deter them from just cashing out and going elsewhere
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SteveT
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Post by SteveT on Nov 30, 2015 11:21:20 GMT
Guess the idea is to retain those from the recent promotions and deter them from just cashing out and going elsewhere Everyone is locked in for 12 months anyway (if they want to keep their bonus)
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r00lish67
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Post by r00lish67 on Dec 1, 2015 5:24:28 GMT
The only rationale I can imagine is that perhaps they'd prefer new lenders to be making their SM purchases from primarily the in-house buyer (who has had to buy some significant chunks recently), rather than from others selling up for whatever reason. As the in house buyer tends to buy loan parts on the PM at a very low bid rate whilst everyone else bids much higher, I suppose the effect is that LC are finding it difficult to offload as much as they'd like. Bring on premiums/discounts sales I say :-)
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kaya
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Post by kaya on Dec 1, 2015 16:04:58 GMT
Seems a negative move to me. And if they don't open up the secondary market to premium/discount market rates, they will never attract the big players who might help to fill loans, and so will be destined to remain stuck where they are. It is about time they got the loans page sorted out too, so that we can see the interest rate, repayment date, etc for each loan.
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Post by Deleted on Dec 1, 2015 18:05:05 GMT
The only rationale I can imagine is that perhaps they'd prefer new lenders to be making their SM purchases from primarily the in-house buyer (who has had to buy some significant chunks recently), rather than from others selling up for whatever reason. As the in house buyer tends to buy loan parts on the PM at a very low bid rate whilst everyone else bids much higher, I suppose the effect is that LC are finding it difficult to offload as much as they'd like. Bring on premiums/discounts sales I say :-) I am ready to bet this is the reason. Sellers are too high a competition for their own underwriting. So they rise the bar and set a difference of 0.5% between them (not paying fees) and genuine lenders... Of course will not encourage new lenders. But I doubt there were attractive enough elements even before.
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stevio
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Post by stevio on Dec 1, 2015 19:04:09 GMT
Guess the idea is to retain those from the recent promotions and deter them from just cashing out and going elsewhere Everyone is locked in for 12 months anyway (if they want to keep their bonus) This was never really clarified - when I spoke to them last, they said that it is just the bonus that can't be removed for 12m (they said the system won't allow it), you can sell your loans - bit strange I know
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ablender
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Post by ablender on Dec 1, 2015 23:23:45 GMT
The way I understood it is that you can sell parts as long as you keep your investments above the £1000 limit. So if I sell parts to buy others it should be fine.
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