Garden Centre

Assuming it is probably because of the new loans allowing people to drop out of negative day loans as they are seen as more risky. As interest is paid up front there is much less risk with a loan which is within it's time limit.

You have to read between the lines (by doing some DD ); some are riskier than others, some are quite safe.

However, in a less liquid SM it's going to be much harder to get rid of any negative loans, regardless of how safe or risky they are.

The risk is that the borrower has to cover the monthly interest rather than it being paid from sums retained on drawdown. There is therefore more uncertainty about payment and of course, if the borrower cant make payment the loan will likely default fairly soon afterwards.

Edit 25 should be less of a risk as it is due to be repaid/rolled shortly into a DFL.

Or not very aware of the situation.

There is, however, another factor involved, and that's SS's Ts&Cs.  In the early days, SS/Lendy was the intermediate borrower and we were lending to them and they were lending on to the ultimate borrower.  SS/Lendy were committed to repaying all their investors and if you had faith in SS/Lendy you didn't worry about the security itself or loans over-running.

At some point, the Ts&Cs were changed to make the platform a true P2P model, with SS facilitating loans between investors and borrowers.  At that point, investors were better protected in the event of the platform failing, but became much more exposed to the success/failure of individual loans.  There's a lot of discussion of the pros and cons of this in the forum archives.

According the ilmoro's excellent thread, the new Ts&Cs came into use with PBL064.  PBLs with lower numbers were written under the old Ts&Cs, except for 37/38/39 which are believed to have been reorganised under the new Ts&Cs. 

This might explain why some people are happy to hold early loans that now have negative terms remaining.  Whether New Ts&Cs loans will be as saleable on the SM when they pass maturity remains to be seen.  My own view is that they won't be, but perhaps there will be enough investors who either don't understand or don't care that it won't make any difference.

PS.  I should note that AFAIK ilmoro's thread is based on info he has gleaned rather than from any official statement from SS, so while it's probably correct it cannot be guaranteed.  SS have been asked to make it clear which Ts&Cs apply to each loan, but we're still waiting for that to happen.

You got lotto numbers you want to share 

There might have been a couple who had a little nudge.... 

I bet chrisuk was happy by this thread; he got rid of his holdings in PBL20 because of what was discussed!

I sell older PBL's too. What I didn't get is who would buy loans with negative days left and will possibly default. What surprises me more is that "investors" are buying this defaulted loan.

The other question I have is, does the provisos fund cover interest? A £5m loan that defaults and takes 2 years to sell after default(you never know) will have £1.35m of accrued interest.

chrisuk was very relieved!!