ramblin rose
Member of DD Central
“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Apr 8, 2014 12:42:13 GMT
If you work out the repayments over the full term of the loan, it works out at a net rate, before tax, of 12.6% pa. Quite lower than the advertise 15%. Considering the very small margin of ltv once you take out debentures, the rate is not as attractive. I'm not knocking down the loan in any way as I will probably invest. Their older loan, if you look at the repayments tab, always paid on time & they've come back for a second loan, which engenders more confidence in the firm but, you need to take all above into account when deciding how much to bid. Forgive what is a basic question here - I've only recently started playing with AC so don't know how all the loan types work. The rate is presumably apparently this low because the borrower is paying back some of the capital each month. Do we lenders not get back the capital part along with the interest each month on this type of loan? If we do, then surely the rate is as stated - it would just be that we have less money loaned out. Or doesn't it work like that?
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Apr 8, 2014 12:46:14 GMT
Thanks J,your probably right.Mind you,given the speed this is going at I wonder if it's fair on people who may not have constant access to the site (i.e. people with either proper jobs or lives !!)  Also,is there going to be time for any crowd DD? |
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Apr 8, 2014 12:47:39 GMT
If you work out the repayments over the full term of the loan, it works out at a net rate, before tax, of 12.6% pa. Quite lower than the advertise 15%. Considering the very small margin of ltv once you take out debentures, the rate is not as attractive. I'm not knocking down the loan in any way as I will probably invest. Their older loan, if you look at the repayments tab, always paid on time & they've come back for a second loan, which engenders more confidence in the firm but, you need to take all above into account when deciding how much to bid. Forgive what is a basic question here - I've only recently started playing with AC so don't know how all the loan types work. The rate is presumably apparently this low because the borrower is paying back some of the capital each month. Do we lenders not get back the capital part along with the interest each month on this type of loan? If we do, then surely the rate is as stated - it would just be that we have less money loaned out. Or doesn't it work like that? You're absolutely right as this is a capital & interest repayment loan. I look at loans differently in terms of net interest over the whole life of the loan & calculate effective interest that way so I can see where I could be confusing the issue for others. My bad! You can obviously ignore my ramblings altogether (no pun intended) 
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Post by Ton ⓉⓞⓃ on Apr 8, 2014 12:56:47 GMT
Must say I thought all this buying would have put more on the AM but as far as I can see nothing has happened there at all. j1 think I should go through some of my other loans and give it your maths treatment. |
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Post by whitmanthecat on Apr 8, 2014 13:37:25 GMT
All gone. Blink and you miss it.
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unmadem
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Post by unmadem on Apr 8, 2014 14:11:49 GMT
All gone. Blink and you miss it. Positively snail like  . There was in late November which lasted all of 34 seconds and somebody actually got 2 bids in in that time !
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oldgrumpy
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Post by oldgrumpy on Apr 8, 2014 14:24:59 GMT
Must say I thought all this buying would have put more on the AM but as far as I can see nothing has happened there at all. j1 think I should go through some of my other loans and give it your maths treatment. Maybe we don't want to put anything on the AM because it will be deducted from new money in the final reckoning for the cashback offer. 
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Apr 8, 2014 14:30:24 GMT
Must say I thought all this buying would have put more on the AM but as far as I can see nothing has happened there at all. j1 think I should go through some of my other loans and give it your maths treatment. Maybe we don't want to put anything on the AM because it will be deducted from new money in the final reckoning for the cashback offer. Let it go Grumps,let it go 
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Apr 8, 2014 14:53:42 GMT
All gone. Blink and you miss it. Shows the huge appetite available for smaller loans, even the less secure ones! £250k raised in 2.5hrs, just like that
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Post by whitmanthecat on Apr 8, 2014 15:20:25 GMT
If you work out the repayments over the full term of the loan, it works out at a net rate, before tax, of 12.6% pa. Quite lower than the advertise 15%. Considering the very small margin of ltv once you take out debentures, the rate is not as attractive. Can I ask how you work this out? If I try to solve it for the loan amount over the 4.5 years for the payment profile, I get exactly 1.41666% per month (=17%/12) corresponding to that monthly repayment, which would also give exactly the right loan amount to clear it after 36 months. This comes to over 18% pa compounded. This might include AC's cut, but I thought the repayments indicated in the credit reports were relevant for individual lenders. If you look at the cash flow plan, there is something in excess of the normal repayments in 2016-17, whihc could be an AC fee. However, there are also only 8 payments on the existing AC loan show in 2013-14, the ninth seems to have disappeared.
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mikes1531
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Post by mikes1531 on Apr 8, 2014 15:21:22 GMT
Is my memory playing tricks on me,or would AC normally put an initial bidding limit on a loan of this size? I think the limit might have been on loans lower than £250k. Since this is on the edge! That rule probably doesn't apply...........me thinks  Here's the announcement made in an email from andrewholgate on 31/Jan/14... Since this loan is only just above the limit for imposing maximum user bids, and since the rate on the loan is much higher than the 12% threshold above which limits 'may' be imposed for loans of this size, and since AC probably would have expected this loan to be funded very rapidly without imposing bidding limits, I'm very surprised that they didn't set any limits. There's enough 'wiggle room' in the above rules that AC have not actually broken them, but I must say I'm rather disappointed. How were AC's lenders supposed to learn about this new loan opportunity? If an email was sent, I didn't receive it. And the loan seems to have gone straight into a live auction with almost no preview period. What was the rush? In fact, this makes me nervous about the state of health of the borrower. We were told very recently that they were in a position to pay off their previous AC loan -- coming due at the end of next week -- from their existing resources. If that is true, why do they need another loan in a hurry? Is this loan being taken out in order to pay off the previous one?
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mikes1531
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Post by mikes1531 on Apr 8, 2014 15:27:32 GMT
This might include AC's cut, but I thought the repayments indicated in the credit reports were relevant for individual lenders. I'm pretty sure the payments shown are the payments the borrower makes, and thus include AC's fees. It's most obvious on an interest-only loan, where the payments clearly are larger than the monthly interest. When I queried that discrepancy with AC last year, I was told that the payments included AC's 'loan monitoring' fee.
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Post by whitmanthecat on Apr 8, 2014 15:31:53 GMT
This might include AC's cut, but I thought the repayments indicated in the credit reports were relevant for individual lenders. I'm pretty sure the payments shown are the payments the borrower makes, and thus include AC's fees. It's most obvious on an interest-only loan, where the payments clearly are larger than the monthly interest. When I queried that discrepancy with AC last year, I was told that the payments included AC's 'loan monitoring' fee. Thanks - this makes sense. The tranche 1 loan was interest only and the payments were 1.75% per month, compared to the 1.5% that individual lenders should get.
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Post by badger on Apr 8, 2014 16:10:52 GMT
Must say I thought all this buying would have put more on the AM but as far as I can see nothing has happened there at all. I picked up some Wo*****tt on AI which I guess was someone releasing cash.
The London Law firm business is helping wealthy people to avoid tax, which I'm not interested in investing in!
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Post by Ton ⓉⓞⓃ on Apr 17, 2014 18:34:24 GMT
I wonder why this one has drawndown so quickly...
I suppose this means that his business & our loan is most secure as he must really know the law to get the legal wheels moving so efficiently.
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Also,is there going to be time for any crowd DD?
. There was in late November which lasted all of 34 seconds and somebody actually got 2 bids in in that time !
