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Post by Matthew on Aug 23, 2016 14:06:54 GMT
Apologies for that experience, I understand why you are frustrated. I think the problem is twofold - 1. Slower than usual matching times and 2. Indicator of matching times being too crude and not allowing for the volatility caused by reinvestment funds pushing back new funds.
We have been focusing time on improving our loan distribution channels and reducing matching times, rather than improving the algorithm which calculates expected time to match, although we acknowledge this does need reworking.
Hopefully you can see that it does not benefit us in the slightest to have slow matching times - some lenders have suggested that it is encouraged (perhaps for us to earn interest on the funds in the meantime). However, any interest on client money goes straight to the Shield, and secondly the interest rate on our client money account is barely above zero!
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ribs
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Post by ribs on Aug 24, 2016 9:07:58 GMT
Well, it seems that money I had outstanding in Lending Works since July finally got matched sometime in the past 18 hours. Supposedly there is only £58.25 in front of me, so I guess the majority of customers have now had funds matched. Regarding recent matching times increasing - for sure this is very, very important for us and is one of our highest priorities currently as a business. Rates generally across the sector have dropped recently - you will probably be aware of this already. If you assume 30 days waiting to match equates to roughly 0.1% lost interest over 5 year loans, you can compare like for like against our peers and choose where to invest your free cash. Our rates, even accounting for a 0.1% haircut, are still competitive across the prime unsecured consumer space, so should be considered with that in mind. 0.1% is indeed not a big deal, however with rates seemingly on a downward turn yet again (it does seem that savers just get hammered at every turn right now), I'm obviously keen to get "locked in" at a higher rate where possible. When I put that money into my account, the rate was actually 5.7%, now it's 5.6%. If it takes over a month for money to get matched each time, the actual hit taken by investors could be much larger if rates continue as they are. Does 0.2% make a difference? Probably not. 0.4 - 0.6%? Maybe. We are working on ways to ensure lenders are matched way more quickly, however right now we're seeing the impact of a large number of investors looking for a decent yield due to recent macro events. So basically you have more money coming in than you're able to handle? A nice problem to have, depending on which side of the money you're on. |
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Post by Matthew on Aug 24, 2016 11:53:47 GMT
By the way, if anyone is interested in becoming one of our 'hero lenders' then please let me know. You may have already received an email regarding this. Essentially we contact you from time to time for feedback on website changes etc and to trial new updates before releasing to our wider customer base.
The average forum lender seems to have some great suggestions and experience across multiple platforms so we'd love your feedback.
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Post by Financial Thing on Aug 26, 2016 16:12:57 GMT
I know interest rates are falling as a whole, but it's concerning me that each week my LW emails rates for 5y is dropping. I recall only seeing it rise once in the last few months. It's now at 5.4% making me question the whole risk vs reward.
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n
Member of DD Central
Yet another Nick
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Post by n on Oct 31, 2016 10:41:19 GMT
I was going to start a new thread called 'Dirty Tricks Department', but thought better of it.
When the 5 year rate went up to 5.4 on 17/10 I put in a tiny amount to test the queue. It said 2 days, so I put in about 2K and that also showed as 2 days. 14 days later and only half was lent at 5.4 and now the rate has come down to 5.2, so the remaining 1K (which has progressed to 'Next working day') will be at the lower rate.
Sad, but on the bright side it looks like it will be lent out quicker than my last deposit which took just over a month.
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Post by Matthew on Oct 31, 2016 13:10:27 GMT
I was going to start a new thread called 'Dirty Tricks Department', but thought better of it. When the 5 year rate went up to 5.4 on 17/10 I put in a tiny amount to test the queue. It said 2 days, so I put in about 2K and that also showed as 2 days. 14 days later and only half was lent at 5.4 and now the rate has come down to 5.2, so the remaining 1K (which has progressed to 'Next working day') will be at the lower rate. Sad, but on the bright side it looks like it will be lent out quicker than my last deposit which took just over a month. Sorry to hear that. I can assure you that LW does not benefit from this situation in any way - the 0.2% reduction in lender rates was wholly passed on to borrowers in the form of lower APRs. Pricing across the board in the personal loans market has moved downwards recently and in order to maintain competitiveness, it was a necessary move. Even after the rate reduction, projected returns of 5.2% p.a. for prime unsecured consumer loans in the current market, adjusted to account for any delay in matching, compare favourably with the market. As always, it's important to note that, as with all forms of lending, capital is at risk. EDIT: Regarding why it took 14 days rather than the initial estimate of 2 - we are aware of some flaws with the calculation, however that sounds strange. Our customer service team would be happy to look into it further if you drop them an email.
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n
Member of DD Central
Yet another Nick
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Post by n on Oct 31, 2016 15:18:30 GMT
I was going to start a new thread called 'Dirty Tricks Department', but thought better of it. When the 5 year rate went up to 5.4 on 17/10 I put in a tiny amount to test the queue. It said 2 days, so I put in about 2K and that also showed as 2 days. 14 days later and only half was lent at 5.4 and now the rate has come down to 5.2, so the remaining 1K (which has progressed to 'Next working day') will be at the lower rate. Sad, but on the bright side it looks like it will be lent out quicker than my last deposit which took just over a month. Sorry to hear that. I can assure you that LW does not benefit from this situation in any way - the 0.2% reduction in lender rates was wholly passed on to borrowers in the form of lower APRs. Pricing across the board in the personal loans market has moved downwards recently and in order to maintain competitiveness, it was a necessary move. Even after the rate reduction, projected returns of 5.2% p.a. for prime unsecured consumer loans in the current market, adjusted to account for any delay in matching, compare favourably with the market. As always, it's important to note that, as with all forms of lending, capital is at risk. EDIT: Regarding why it took 14 days rather than the initial estimate of 2 - we are aware of some flaws with the calculation, however that sounds strange. Our customer service team would be happy to look into it further if you drop them an email. Hi Matthew. Thank you for your speedy response. I will email you my details shortly, just to check. It might simply be that the rate increase was more effective at putting off new borrowers than you had anticipated, as evidenced by your need to reduce it again after only 2 weeks.
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Post by Matthew on Oct 31, 2016 16:16:10 GMT
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nd
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Post by nd on Nov 1, 2016 9:06:14 GMT
On 14/10, as a result of an email from LW saying that lending times were down to a few days, I topped up my account. Matching time for the 3 year loans was shown as 10 days. We are now 17 days on and I'm told I'm now 11 days from the front of the queue. At this rate it's going to be over a month before my money is lent out.
Matching of reinvestment remains fairly quick but adding new funds still seems pointless.
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nd
Member of DD Central
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Post by nd on Nov 12, 2016 13:48:53 GMT
I was going to start a new thread called 'Dirty Tricks Department', but thought better of it. When the 5 year rate went up to 5.4 on 17/10 I put in a tiny amount to test the queue. It said 2 days, so I put in about 2K and that also showed as 2 days. 14 days later and only half was lent at 5.4 and now the rate has come down to 5.2, so the remaining 1K (which has progressed to 'Next working day') will be at the lower rate. Sad, but on the bright side it looks like it will be lent out quicker than my last deposit which took just over a month. Sorry to hear that. I can assure you that LW does not benefit from this situation in any way - the 0.2% reduction in lender rates was wholly passed on to borrowers in the form of lower APRs. Pricing across the board in the personal loans market has moved downwards recently and in order to maintain competitiveness, it was a necessary move. Even after the rate reduction, projected returns of 5.2% p.a. for prime unsecured consumer loans in the current market, adjusted to account for any delay in matching, compare favourably with the market. As always, it's important to note that, as with all forms of lending, capital is at risk. EDIT: Regarding why it took 14 days rather than the initial estimate of 2 - we are aware of some flaws with the calculation, however that sounds strange. Our customer service team would be happy to look into it further if you drop them an email. Had some money lent out on Friday but it's been done at the further reduced rate that starts on Sunday not the rate in place on Friday. The difference in interest is pennies but it strikes me as being a bit odd.
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n
Member of DD Central
Yet another Nick
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Post by n on Nov 12, 2016 14:58:40 GMT
Yes nd, I have spotted that a few times as well - unfortunately I have not been able to see if the same applies when rates go up.  |
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Post by Matthew on Nov 12, 2016 15:54:12 GMT
Hi guys
This does happen when rates rise too. The reason is due to aligning the start date of the loan with the date on which the borrower receives the funds (some loans matched and processed on Friday can clear on Monday, so Monday's loan base rate is applied). This ensures they only pay interest for the number of days for which the funds have been made available.
It's a bit of a quirk but is not intended to benefit or disadvantage either side (nor LW).
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