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Post by bracknellboy on Mar 27, 2016 18:28:19 GMT
Too old, too tired. I'll struggle on with me pension and preferential National Trust rates... Understandable. But if you ever decide to sell let me know: I'd be happy to exercise that £19,995 valuation, even sight unseen: I know its a risk, but consider it as a contribution to 'Help the Aged'.
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Post by uncletone on Mar 27, 2016 18:30:25 GMT
Too old, too tired. I'll struggle on with me pension and preferential National Trust rates... Understandable. But if you ever decide to sell let me know: I'd be happy to exercise that £19,995 valuation, even sight unseen: I know its a risk, but consider it as a contribution to 'Help the Aged'. 
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Post by propman on Mar 29, 2016 8:06:15 GMT
So where exactly is the difference that makes Zopa unsuitable and RS suitable ... ? One month term. So low potential fee, if there is one, to cover the difference between rates and the opportunity to exit without fee just by waiting a maximum of a month. Roughly, that lets pretend one month case is what applies to RateSetter. RS has explicitly stated that the monthly money being repaid on time depends upon the liquidity to refinance th eloans. If liquidity dries up you are locked into the rate and term of the underlying loan (usually 1-2 years). The shortfall on some days between the borrower requests and lenders funds on the monthly markets suggests that the liquidity is not that great even in the current benign conditions, although there is institutional money to bridge the gap and RS wait for new money to be put on loan over 12 hours to fill some of the gap. They have said that a resoplution event will only be from depletion of the PF and that the PF is only used for late payments not liquidity.
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james
Posts: 2,205
Likes: 955
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Post by james on Apr 14, 2016 20:14:27 GMT
RateSetter have now renamed their product and made it clear that the underlying loans are not one month term but instead can be up to five years term. Because of this I've edited soem posts in this topic where I gave my view on the differences between the two and which was better.
Neither seems well suited to those who want regular or infrequent access to their money because of either the liquidity risk after rate rises at RateSetter or the capital loss after rate rises at Zopa. Of the two and in benign interest rate change situations the RateSetter product looks like the better of the two.
I wouldn't want to recommend either to those who want assured regular or infrequent access to their money because neither by design can provide that feature for all of the money except in benign conditions. Both are trying to shoehorn a product with easy access appearance into longer term underlying loans. That'll work provided rates move only slowly and the basic risk appears to be a bit lower at RateSetter in those conditions.
Best to use neither if you want assured regular or infrequent access to the money.
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