nick
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Post by nick on Sept 25, 2014 8:12:12 GMT
I'm a new investor on Savingstream, and on the whole I think the way the site is set-up and operates is awesome. However, the one area of disappointment is how accrued interest (or lack of) works with loans put-up for sale. It is nonsensical to stop interest accruing from the time the loan part is listed for sale until the full amount is sold. Common sense would dictate that investors should continue to accrue interest on sold balances up to the time of eventual sale. I have read the previous discussion regarding the technical difficulties in trying to track interest between buyer and seller and really struggle to believe that this is problem that can't be easily surmounted. For example, given the structure of the investment (ie we are lending to Lendy with a notional allocation to a loan it was made to an end borrower) and the lack of discrete loan part values, the total balance each investor holds in each different loan part is easily determinable at the daily close and daily interest can be applied to that balance with no distinction of the balance that is on sale (but unsold). This would automatically track accrued interest between buyer and seller on transfers of loan balance between investors and should be even easier to account than currently as well as ensuring the party funding the loan balance is alway the one being allocated the interest. It should really be as simple as that.
If the real issue for Savingstream is the saving in interest when the loan part is in process of sale, I strongly believe a transfer fee/% would be far more transparent and give a lot more certainty to investors.
Instead, with the current set-up, I find myself selling balances in £100 lots so avoid the uncertainty over how long a loan takes to sell down (in theory an investor whose loan part does not sell for whatever reason would be left funding the loan part for zero interest for the remain term until final repayment - how can this possibly be viewed as being equitable). This is fine now when dipping my toe in the water with only circo £10,000s in loans, but becomes very tedious if I ramp up my investment to £100,000s which had been my intention. It is particularly disappointing given the rest of the site and operation is exceptionally slick and spot on, eg interest accrued from day one / accrued interest honoured if deal falls over etc - all awesome. It is a shame the treatment of interest on loan parts posted for sale causes unnecessarily uncertainty for investors which I'm sure makes us all slight less comfort and much more cautious.
Ending in a positive note, it is clear from reading this forum, Savingstream does listen and take account of investors views which is refreshing. I hope that my above comments are given consideration as I feel very strongly about the accrued interest issue and I'm sure my views are shared by many og my fellow investors given what I have read on this forum and elsewhere. That said, given the lending is generally short term, it lessens the importance of the SM so maybe I'm placing to much importance on this - its just a shame when everything else about Savingsteam is great!
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star dust
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Post by star dust on Sept 25, 2014 9:29:36 GMT
If SS introduce secondary market fees, as things stand at present, they would very likely loose me as an investor. Quite frankly I would rather see them introduce the ability to ‘buy back’ your ‘for sale’ part, as a more appropriate 'fix' for this, but even if they don’t implement this I regard a small loss of interest on the sale of a loan part in what is currently a very liquid AM as a very small price to pay for the many advantages of the SS platform. I regard the instant credits, and instant interest on investments as far outweighing this issue – very few (if any?) platforms offer this. On the other hand as I am not a £100k investor maybe SS would prefer more of those like you and less of those like me – I don't know how much you would need nick, but have you thought of approaching them as an underwriter?
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ramblin rose
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“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 Sept 25, 2014 9:59:39 GMT
nick I'm afraid I'm with star dust on this one, and I think you've hit the nail on the head towards the end of your post - with a 6 month loan then it is a luxury to be expecting to get access to that money within 6 months. It is a luxury we can currently comfortably expect, because the SM is very liquid. I think your £100 sales are overly cautious - I regularly sell loan parts of £1K - £2K and always sell within the day - frequently finding the money in my own bank account by the evening on the occasions when I've chosen to withdraw. However, I (and this is, I know, personal) believe that with a 6 month loan we should go into them expecting to hold them to maturity. It is not my business to be wondering, with £100K + amounts to invest why you would be wanting to get it all out within 6 months - that's your affair - but it certainly would be galling to find this wonderfully simply platform getting complicated. Like star dust, I would consider a day or two loss of interest acceptable - especially considering there is 12% paid from just hours after you make the investment in the first place. Anywhere else that I put money at those sort of rates incurs at least a few days with no interest on the whole amount at the start.
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webwiz
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Post by webwiz on Sept 25, 2014 13:40:15 GMT
I also like the SM the way it is. However it is only good as long as there is an appetite for the loans on sale. If everyone tried to bale out at once it would be different.
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nick
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Post by nick on Sept 25, 2014 14:58:48 GMT
If SS introduce secondary market fees, as things stand at present, they would very likely loose me as an investor. Quite frankly I would rather see them introduce the ability to ‘buy back’ your ‘for sale’ part, as a more appropriate 'fix' for this, but even if they don’t implement this I regard a small loss of interest on the sale of a loan part in what is currently a very liquid AM as a very small price to pay for the many advantages of the SS platform. I regard the instant credits, and instant interest on investments as far outweighing this issue – very few (if any?) platforms offer this. On the other hand as I am not a £100k investor maybe SS would prefer more of those like you and less of those like me – I don't know how much you would need nick, but have you thought of approaching them as an underwriter? Stardust - you make a good point re clogging-up the SM, I hadn't thought of that. Perhaps you are right that all that is really needed is a way to take loans parts listed on the SM back. My original view was a my knee jerk reaction that the person funding the loan part (whether on sale or not) should be the ones rewarded by interest. Re underwriting, the 0.5% cashback offers is their way getting of getting a lot of people to effectively act as underwriters. Eg the cash back incentive draws people to invest in the new deals in preference to the SM, with alot of these people (myself included) looking to sell some or all their holdings in the SM. A good system and allows everybody to underwrite on a small scale if they so wish.
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j
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Penguins are very misunderstood!
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Post by j on Oct 1, 2014 19:42:20 GMT
A handful of super yacht units have now appeared on SM. But hurry, blink & you might miss 'em. till some more crop up that is
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Investor
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Post by Investor on Oct 1, 2014 21:26:29 GMT
Yep, just gone live, interest to date and cash back has been paid
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unmadem
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Post by unmadem on Dec 20, 2014 13:30:31 GMT
parts of 12 property loans available
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oldgrumpy
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Post by oldgrumpy on Dec 20, 2014 14:11:40 GMT
parts of 12 property loans available Saving Stream's Saturday Sale!
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star dust
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Post by star dust on Dec 20, 2014 14:39:36 GMT
parts of 12 property loans available Saving Stream's Saturday Sale! SSSS - not much of a discount, but a few splash-back's thrown in for good measure .
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david42
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Post by david42 on Jan 17, 2015 15:51:16 GMT
Savingstream - I joined Saving Stream today, encouraged by the informative and positive discussions on this forum. Excitedly making my first investment on the apparently easy to use platform I immediately made my first mistake: selecting to have interest paid upfront without realising I was depriving myself of access to the excellent secondary market.
Enhancing the software to allow all types of loan to be sold on the secondary market would save me making a tricky decision about my unknown future needs and it would enhance both of Saving Stream's main competitive advantages: the simplicity and uniformity of the user experience and the flexible access to funds. The appropriate proportion of any prepaid interest could be deducted from the sale proceeds.
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Post by Deleted on Jan 17, 2015 15:59:04 GMT
Savingstream - I joined Saving Stream today, encouraged by the informative and positive discussions on this forum. Excitedly making my first investment on the apparently easy to use platform I immediately made my first mistake: selecting to have interest paid upfront without realising I was depriving myself of access to the excellent secondary market. Enhancing the software to allow all types of loan to be sold on the secondary market would save me making a tricky decision about my unknown future needs and it would enhance both of Saving Stream's main competitive advantages: the simplicity and uniformity of the user experience and the flexible access to funds. The appropriate proportion of any prepaid interest could be deducted from the sale proceeds. Could be worth dropping SS an email or contact form explaining you are brand new to SS today and made a mistake on selecting upfront interest owing to lack of understanding as a new investor. They might be able to change it to monthly interest for you. Just a thought.
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Post by duncandive on Jan 17, 2015 16:10:54 GMT
Savingstream - I joined Saving Stream today, encouraged by the informative and positive discussions on this forum. Excitedly making my first investment on the apparently easy to use platform I immediately made my first mistake: selecting to have interest paid upfront without realising I was depriving myself of access to the excellent secondary market. Enhancing the software to allow all types of loan to be sold on the secondary market would save me making a tricky decision about my unknown future needs and it would enhance both of Saving Stream's main competitive advantages: the simplicity and uniformity of the user experience and the flexible access to funds. The appropriate proportion of any prepaid interest could be deducted from the sale proceeds. Hi David and welcome, I'm new to to Saving Stream too. What I did was a 50;50 split on my investment, so I will have access to the SM for 50% of my funds. Not my idea, but some thing I read on a few posts that was put worward by the more experienced members. A Big Thanks to All of them from Me..
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david42
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Post by david42 on Jan 17, 2015 17:44:10 GMT
DuncanDive and FastFox - thank you both for your suggestions and for making me feel welcome. Both your suggestions are possible workarounds.
On a platform that differentiates itself by being easy to use, would it not be so much better to fix the problem by removing the restriction? That was my reason for posting the suggested improvement on the forum. I could not see this suggestion raised or discussed elsewhere.
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mikes1531
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Post by mikes1531 on Jan 17, 2015 17:47:43 GMT
On a platform that differentiates itself by being easy to use, would it not be so much better to fix the problem by removing the restriction? That was my reason for posting the suggested improvement on the forum. I could not see this suggestion raised or discussed elsewhere. If this suggestion were to be adopted, why would anyone opt for monthly interest?
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