mikeb
Posts: 1,072 
Likes: 472
|
Post by mikeb on Mar 31, 2014 18:58:39 GMT
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Mar 31, 2014 19:43:21 GMT
I wonder what the 94 potential borrowers with loans listed will think of that? Another 14% day tomorrow, if they get funded.
Edit, my mistake, it is selected loans from tomorrow - the big ones. Looks a bit retroactive and very desperate. I wonder how long they have been planning it? (Since that loan failed to fill this morning perhaps.)
Perhaps the following has been put together a bit hurriedly?
'3. The offer is for a limited period only and the offer period end date will be communicated via email to all investors sent not sooner than the before the actual end date.
4. ...
5. Funding Circle reserves the right to amend, withdraw or extend any or all elements of this offer at any time.
6. ...
7. Funding Circle reserves the right to amend, withdraw or extend any or all elements of this promotion at any time'
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Mar 31, 2014 20:33:57 GMT
So I actually lend someone £99 (FC put £1 in). Borrower pays interest on £100. Say 12%. Does that make interest actually 12 x 100 over 99 = 12.12% ? I'm not too clever at interest calculations when cashback is involved. Not wildly exciting.
|
|
|
|
Post by davee39 on Mar 31, 2014 20:52:14 GMT
So I actually lend someone £99 (FC put £1 in). Borrower pays interest on £100. Say 12%. Does that make interest actually 12 x 100 over 99 = 12.12% ? I'm not too clever at interest calculations when cashback is involved. Not wildly exciting. But you are not supposed to keep the loan. As soon as you get the cashback the loan goes on the market at zero markup to join the thousands of other unsold loans. If it sells you get 0.75% plus any interest after the FC Fee.
|
|
jimbo
Posts: 234
Likes: 42
|
Post by jimbo on Mar 31, 2014 20:53:54 GMT
I think this offer is indeed a reaction to both today's closing rates on larger loans and Loan 5590 failing to fill. It's not a smart reaction in my opinion though, as there is no lock-in period so the secondary market liquidity is now going to be even more up the creek without a paddle. Was thinking earlier that they might be better off introducing a fee-free period for lenders rather than cashback.
This will bring more cash into the platform in the short-term though. Well, I'll be amazed if it doesn't....
|
|
|
|
Post by GentlemansFamilyFinances on Mar 31, 2014 20:58:13 GMT
All in favour of Cashback - it's not taxed and you can do quite nicely from the promotion. BUT - this only ensures that many loan parts end up on the market at 0% mark-up and strangles up the secondary market. Should be fun tomorrow though.  |
|
|
|
Post by mead187 on Mar 31, 2014 21:09:24 GMT
I made the decision not to invest any new funds into FC a while ago. It seems a bit of a knee jerk reaction from FC. The secondary market will be awash with new loan parts with people hoping to cash in, might see some mega flippers pile into new loans. I'll be sitting this one out me thinks.
|
|
|
|
Post by aloanatlast on Apr 1, 2014 1:37:07 GMT
So I actually lend someone £99 (FC put £1 in). Borrower pays interest on £100. Say 12%. Does that make interest actually 12 x 100 over 99 = 12.12% ? I'm not too clever at interest calculations when cashback is involved. Not wildly exciting. The taxable interest, yes. But you also get a tax-free bonus, because over the life of the loan, the borrower repays principal of £100 when you only put in £99.
If you reckon this bonus (i.e. the cashback itself) as extra interest, then it's like buying loan parts at 1% discount. The buyer rate is higher than the contract rate by about 2% if it's a 12-month loan, 1% 24-month, 0.7% 36-month, 0.5% 48-month, 0.4% 60-month.
|
|
|
|
Post by aloanatlast on Apr 1, 2014 4:00:54 GMT
Well I suppose I'd better go and get the spare £100K out of the mattress, where I stuck it because 14% interest wasn't good enough. Oh no, I forgot, I've scraped the barrel already, it's FC where all the money is stuck.
And now it's even stucker, as people push their rates up to try to liquidate some cash to play with. On sale 250, sold yesterday 15, expected sales today 0. Maybe I should start discounting 14% loan parts, to raise cash to buy other people's discounted 14% loan parts. No hang on.
Previous cashback exercises have tested the ability of the secondary market to soak up new loans quickly, and have ended up sucking the well dry. But this time, that seems to have been done already.
|
|
min
Member of DD Central
Posts: 616
Likes: 183
|
Post by min on Apr 1, 2014 6:16:17 GMT
All in favour of Cashback - it's not taxed and you can do quite nicely from the promotion. BUT - this only ensures that many loan parts end up on the market at 0% mark-up and strangles up the secondary market. Should be fun tomorrow though. Think today will take care of itself as the first two 'cashback' loans are now fully subscribed. Only one that might struggle is the anonymous drug co that doesn't answer questions. What will be interesting is next few days where there are loans not fully subscribed that DON'T have cashback. Wouldn't surprise me if one or more of those don't fill as all the dosh piles into the cashback. If that happens expect cashback on ALL loans. I'm suspending my withdrawal and sticking £20 on almost everything with cashback. Might as well - the secondary market will be gummed up for weeks and months now so selling anything will be even worse.
|
|
markr
Member of DD Central
Posts: 766
Likes: 426
|
Post by markr on Apr 1, 2014 8:35:15 GMT
Well I suppose I'd better go and get the spare £100K out of the mattress, where I stuck it because 14% interest wasn't good enough. Oh no, I forgot, I've scraped the barrel already, it's FC where all the money is stuck. Not to worry, HSBC are offering a mortgage fixed for 2 years at less than 2% APR, with overpayments allowed and no exit fees after the 2 years are up. Remortgage the house and stick it all in FC and you'll be quids in. Nothing here should be taken as financial advice, seek advice from an IFA before betting the farm on loans to scrap merchants and fly by night lawyers. If you lose your house because your loans turn out to be as worthless as the foul a*r blown through a squashed t*ba from the s**t hou*e, don't come running to me.
|
|
|
|
Post by valerieb on Apr 1, 2014 9:16:42 GMT
Very entertaining watching the last moments of frantic bidding on the £100+k loans but frustrating that my money bid at 14% was still stuck in the system even though in reality 13.7% was the top rate; obviously I need to change my tactic for the next big loan!
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Apr 1, 2014 9:21:16 GMT
I don't think any of today's offerings are especially attractive anyway, though 14% + a little cashback does sweeten the fruit, but how many will be accepted by the borrower at 12%+ rate, I wonder. This will all make my selling off of old low rate, and dodgy repayment sell offs almost motionless.
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
Post by merlin on Apr 1, 2014 9:51:17 GMT
Very entertaining watching the last moments of frantic bidding on the £100+k loans but frustrating that my money bid at 14% was still stuck in the system even though in reality 13.7% was the top rate; obviously I need to change my tactic for the next big loan! The volume of bids going in during the closing phase of the bidding demonstrates that FC got what they were after - more cash coming in. However at what price I wonder in the longer term? I must admit yesterday before the announcement of cashback I thought both these loans would end up in the high 14% range and then once the announcement was made I reconsidered and though low 12% would be more likely. Shows how difficult it can be to judge in this new environment!
|
|
jimbo
Posts: 234
Likes: 42
|
Post by jimbo on Apr 1, 2014 10:10:15 GMT
It's not that different to June/July 2012 at the moment in terms of overall closing rates. The secondary market was flooded then aswell, albeit from people flipping for cashback....
|
|
