adrianc
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Post by adrianc on Nov 28, 2016 13:54:10 GMT
Well I've dipped my toe in and will report back what happens over the coming months. One thing I did notice if I'm not mistaken, is that if the borrower repays early, then the lender gets daily interest paid up until that point (fair enough). But as I understand it, the platform gets their full whack 33% paid since it is classified as an "administration fee". Would seem a lot fairer to me if that fee was also shared with the lender. So if a borrower repays 5 days into a 15 day loan, the lender gets zero?
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michaelc
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Post by michaelc on Nov 28, 2016 14:04:39 GMT
Well I've dipped my toe in and will report back what happens over the coming months. One thing I did notice if I'm not mistaken, is that if the borrower repays early, then the lender gets daily interest paid up until that point (fair enough). But as I understand it, the platform gets their full whack 33% paid since it is classified as an "administration fee". Would seem a lot fairer to me if that fee was also shared with the lender. So if a borrower repays 5 days into a 15 day loan, the lender gets zero? My understanding is that the lender gets their daily rate so in your example that would 5x0.4% (or whatever the daily rate is). But the platform trousers their full fee for that loan as if it had run for 15 days. That fee I believe is 35% of 15x0.4% in your example. (Note that they don't offer 15 day loans but it doesn't affect the point I'm trying to make which could be wrong!). I believe the borrower pays that fee direct to the platform if they settle early. If I'm right, and also because of other calcs others have made showing the return isn't that great, I suspect this area of p2p is still wide open for competition. One other thing that bothers me, is the lack of transparency - I see nothing about the borrower even though I'm lending him/her 100% of the cash. Is there anything to stop the platform having received a full repayment from the borrower to lie to the lender and say "...sorry that one went bad..." ? For all the above, I'm now on my second (£500) loan with more offers placed.....
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james
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Post by james on Nov 28, 2016 17:41:45 GMT
I see nothing about the borrower even though I'm lending him/her 100% of the cash. Is there anything to stop the platform having received a full repayment from the borrower to lie to the lender and say "...sorry that one went bad..." ? The money is owned by the lenders. Taking money owned by someone else is theft, a crime. P2P platforms would not normally want to engage in criminal activity, if only because it has some potential adverse quality of life consequences for the individuals involved. A platform could do it, for a while, though, before it was noticed.
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adrianc
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Post by adrianc on Nov 28, 2016 22:20:25 GMT
I see nothing about the borrower even though I'm lending him/her 100% of the cash. Is there anything to stop the platform having received a full repayment from the borrower to lie to the lender and say "...sorry that one went bad..." ? The money is owned by the lenders. Taking money owned by someone else is theft, a crime. P2P platforms would not normally want to engage in criminal activity, if only because it has some potential adverse quality of life consequences for the individuals involved. A platform could do it, for a while, though, before it was noticed. I think it'd probably be fraud, rather than simply theft. TBH, if you even begin to speculate as to whether any given platform might do that, then you really really really really really ought not to have your money on that platform in the first place.
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david42
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Post by david42 on Nov 28, 2016 23:33:53 GMT
Well I've dipped my toe in and will report back what happens over the coming months. One thing I did notice if I'm not mistaken, is that if the borrower repays early, then the lender gets daily interest paid up until that point (fair enough). But as I understand it, the platform gets their full whack 33% paid since it is classified as an "administration fee". Would seem a lot fairer to me if that fee was also shared with the lender. So if a borrower repays 5 days into a 15 day loan, the lender gets zero? I think Michaelc's interpretation is the most likely. From the terms and conditions: " 6.5 Early Repayment: You may make any Repayment(s) early under the Loan Contracts free of any charge, except for interest payable to the date of repayment and the loan set-up fee" The loan set-up fee is not defined so I can only assume they mean the loan administration fee, which is defined here: " 4.6.1 first to pay to us a fee equivalent to 35% of the interest payable under the Loan Contract to cover the set-up and administration of each Loan Contract entered into by that Borrower at or about the same time (“Loan Administration Fee”); "
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michaelc
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Post by michaelc on Nov 29, 2016 16:24:31 GMT
The money is owned by the lenders. Taking money owned by someone else is theft, a crime. P2P platforms would not normally want to engage in criminal activity, if only because it has some potential adverse quality of life consequences for the individuals involved. A platform could do it, for a while, though, before it was noticed. I think it'd probably be fraud, rather than simply theft. TBH, if you even begin to speculate as to whether any given platform might do that, then you really really really really really ought not to have your money on that platform in the first place. Yes I agree about fraud vs theft but either way I think it is absolutely reasonable to speculate about that and indeed the safety of the platform itself is always one of my first thoughts wherever I chose to put my money. I was thinking someone might say something about how unlikely it would be due to FCA vetting and processes or maybe the company is insured against the risk of a rogue employee etc. In the end, I view that risk in the context of the overall risk which I am obviously prepared to take. I was just wondering if anyone had given it any thought before. It is particularly relevant here because with some of the other platform genres, you get to see independent valuation reports be professionals such as from RICs. You can google the property location, view it on Rightmove, view the plans on the counci's website then google the applicant etc etc. TMT is a little more scary in that you get absolutely nothing. That is what made me bring it up. I suspect anonymised data about the applicant maybe the way to go.
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james
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Post by james on Nov 29, 2016 17:28:58 GMT
I was just wondering if anyone had given it any thought before. Yes. Rogue employee relates in part to another risk: changing or not following underwriting standards. There have been a number of cases where people at mainstream lenders have done higher risk lending than they were supposed to, apparently in some cases just to obtain bonuses. To meet targets and get promoted or avoid being fired can also be a motivator, as has been seen in the sale without customer knowledge of financial products to customers by employees of Wells Fargo, a major systemically important US bank. The employees simply "sold" without telling the customer to hit their targets and keep their jobs. That sort of thing is part of why FCA employee remuneration work discourages such things. It is particularly relevant here because with some of the other platform genres, you get to see independent valuation reports be professionals such as from RICs. You can google the property location, view it on Rightmove, view the plans on the counci's website then google the applicant etc etc. TMT is a little more scary in that you get absolutely nothing. That is what made me bring it up. I suspect anonymised data about the applicant maybe the way to go. The problem with that is that knowing the borrower is critically important to evaluating the loan. Security is supposed to be a fallback, not something you rely on when lending to a crook who is going to cheat you if you give them even a minimal opportunity. A platform might not care but lenders should because they will bear the losses.
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Greenwood2
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Post by Greenwood2 on Nov 30, 2016 10:15:27 GMT
These are unsecured loans to individuals, so no security to evaluate. People borrowing at these rates probably have low credit scores or they would get the money another way. It is a very risky type of lending.
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markr
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Post by markr on Dec 7, 2016 15:56:56 GMT
Whoop whoop, I now have 2 loans matched! Both 12 weeks 0.3% (by far the most popular category!)
Finding borrowers seems to be the problem for TMP. Given that daytime TV is full of annoying adverts for short-term lenders, there seems to be plenty of demand (and money to be made for lenders), so apart from being a very small fish in a crowded pond I don't see why there aren't more deals to be had.
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hendragon
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Post by hendragon on Dec 7, 2016 16:40:03 GMT
similar to myself. I have one 0.3% of 12 weeks and one 0.4% of 6 weeks. I have now gone 0.4% across the board. Lending does seem a little slow but at this stage of things I would rather MTP are very cautious about borrowers and a little slower.
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david42
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Post by david42 on Dec 7, 2016 17:01:56 GMT
As of earlier today they had a total of £33,750 loans in place. Hardly a viable volume for lenders or for the platform. But that has doubled since I last checked on 17th November, which is encouraging.
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kaya
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Post by kaya on Dec 7, 2016 17:04:18 GMT
It sounds very brave of anyone who invests here. Or just more money than....needed?
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hendragon
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Post by hendragon on Dec 7, 2016 17:29:21 GMT
It is certainly not the latter Kaya. As regards bravery I am not quite sure it it is brave, stupid, greedy, or a combination of all 3
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Post by The Money Platform on Dec 8, 2016 11:02:34 GMT
Hi everyone,
Just a small update in relation to an earlier issue: we have now removed the £1 withdrawal fee.
In other news: our volumes have been growing steadily and we hope to continue to see them grow organically, although as others have already pointed towards we will not grow our volumes by relaxing our lending criteria.
Please keep feeding back to us: as you can see, we take your feedback extremely seriously and will act upon it where needed.
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michaelc
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Post by michaelc on Dec 8, 2016 15:14:11 GMT
It is certainly not the latter Kaya. As regards bravery I am not quite sure it it is brave, stupid, greedy, or a combination of all 3 Haha I would agree with that. And for my part to be more specific I've also been given two loans. Both at 4 weeks with at 0.4 and the other 0.5. Due around the end of this month. I'd rather take 10 for now to balance out the risk but even though the first two got arranged within days, my current offers have been languishing for a week or two now. Good to see the platform has removed an annoying withdrawl fee.
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