CONFIRMED - SS are considering lower interest rates

Possible, but it's more likely they'll 'ring round' their top 20 to 50 BHs, whose opinion actually swings most of the funds. 8>.

Which is all very well when it starts, but generally speaking once the rates on some loans go lower, the higher rate ones become rarer and rarer as time goes by.  As one of those who likes to stay at the riskier end of things in return for the higher rates, I now find there's nothing for me on AC, whereas just a year or so ago there were plenty of new loans to suit.  If SS start going for lower rate loans and find that plenty of people invest in them, then they'll spend more time chasing that loan market because it's easier to sell a lower rate loan.  Then, only the people wanting lower risk investments will end up being catered for in any meaningful way.

By definition, most of those who've been in p2p a number of years are happy with higher risk - we adopted early.  More and more of the people who come on board now are going to be more risk-averse (posts on the forum these days attest to that), and the platforms will find it easier to cater for them.  It's inevitable, and I've been saying similar for a long time, but knowing it and liking it are two different things .  I would stick with the 12% loans while available, but let's see how long that turns out to be.

I think it can be argued that there is a case for selected lower risk loans to be offered at 10% or 11% if that attracts in additional borrowers.  PBL 075, 081, 086, & 104 are all single residential properties with plenty of comparables and demand to support the valuations which feel to me slightly over priced for risk at 12%.

However I feel the vast majority of SS loans are under priced for risk at 12%, and reducing the yield on lower risk loans whilst not simultaneously increasing the yield on higher risk loans (as both FS and TC do regularly) is in effect reducing the effective yield vs risk across the whole loan book.

Initially I voted "Yes I would be happy to see lower interest rate loans", but I have on reflection changed my vote to No.

If SS are going to change rates, then i can only see it being on a loan risk basis, good loans 10%, average 11%, riskier 12-14%, and personally only acceptable as long as the PF remains.

If SS were to just drop the rate to 10% or 11% and no PF i would then be looking very cynically at whether this just was a simple move to increase their margins.

And also bear in mind if SS reduce the rate and use the excuse of supplying us better quality loans, then what in 12 months when the demand is still outstripping supply, choice?.. poorer quality loans again, but now at 10% or further drops in lenders rates.

While ever demand outstrips supply, SS hold the best cards.

My worry is that they start pricing to liquidity, which on other platforms provides a great opportunity, on SS with excess liquidity, will lead to underpriced deals compared to risk.

I note the website changes say 'up to 12%', not 'up to 14%', so it looks like we are being offered lower but nothing higher?

I see this as a way SS to boost profit rather than anything else. For short term loans borrower paying about 20% (SS said in website), which is way lower than short term loan like Wonga, 1500%. Just the amount of money waiting to be lent out had prompted SS to get a few more percent of profit.

I consistently get roughly 25% allocation in pipeline loan, that make SS believe they have 4 times more money waiting, but hope they think again, because I don't always intend to invest the full amount I say I would with the view of 25% allocation.