bg
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Post by bg on Mar 7, 2017 7:35:08 GMT
That great, and I see your reasoning for this loan. So when do you think we're going to see another <£500k 12% loan? Or <£1m 12% loan? From where I'm standing, looking at the <12% we've seen so far, SS aren't basing the rates on risk. I don't think they can. Given the competition now in the market I think it's now a trade off between winning the loan but not letting their average return after defaults slip too far (and that's where their risk assessment comes in). You can't blame the platforms. It's the investors who are happy to take risky loans down at rates that don't represent the risks.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 7, 2017 7:47:19 GMT
That great, and I see your reasoning for this loan. So when do you think we're going to see another <£500k 12% loan? Or <£1m 12% loan? From where I'm standing, looking at the <12% we've seen so far, SS aren't basing the rates on risk. I don't think they can. Given the competition now in the market I think it's now a trade off between winning the loan but not letting their average return after defaults slip too far (and that's where their risk assessment comes in). You can't blame the platforms. It's the investors who are happy to take risky loans down at rates that don't represent the risks. If that's true, then I see no reason why SS don't disclose the borrower's rate. It seems strange that SS were reading publishing the contracts up until the new lower rates were introduced... However, I'm not convinced by your argument. The rate hasn't dropped so that SS can be competitive; if that was the case we would be seeing 10%/11% 300k loans, whereas all these small loans on have dropped like a stone.
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Balder
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Post by Balder on Mar 7, 2017 8:23:29 GMT
Platform owners turn into "bankers" unfortunately.........
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bg
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Post by bg on Mar 7, 2017 8:24:20 GMT
I don't think they can. Given the competition now in the market I think it's now a trade off between winning the loan but not letting their average return after defaults slip too far (and that's where their risk assessment comes in). You can't blame the platforms. It's the investors who are happy to take risky loans down at rates that don't represent the risks. If that's true, then I see no reason why SS don't disclose the borrower's rate. It seems strange that SS were reading publishing the contracts up until the new lower rates were introduced... However, I'm not convinced by your argument. The rate hasn't dropped so that SS can be competitive; if that was the case we would be seeing 10%/11% 300k loans, whereas all these small loans on have dropped like a stone. I just don't see how the borrower's rate is relevant. You say it as if SS owe you a higher rate. If you don't like it don't invest. All the platforms are dropping their rates (save FS perhaps), you can always go elsewhere if you think SS rates are too low.
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r1200gs
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Post by r1200gs on Mar 7, 2017 8:38:36 GMT
If that's true, then I see no reason why SS don't disclose the borrower's rate. It seems strange that SS were reading publishing the contracts up until the new lower rates were introduced... However, I'm not convinced by your argument. The rate hasn't dropped so that SS can be competitive; if that was the case we would be seeing 10%/11% 300k loans, whereas all these small loans on have dropped like a stone. I just don't see how the borrower's rate is relevant. You say it as if SS owe you a higher rate. If you don't like it don't invest. All the platforms are dropping their rates (save FS perhaps), you can always go elsewhere if you think SS rates are too low. You know, most people around here are not stupid and don't need to be told they can invest elsewhere. They know, and telling them they can go elsewhere is condescending and irritating. On topic, I don't believe SS are dropping rates to be more competitive even if that might be part of the reason, they are dropping rates because they clearly can. Why offer 12 percent when you can offer 6 and be three times over subscribed? It's all going to be irrelevant to me anyway. The SS portfolio I have built in the last couple of years is dwindling because I simply cannot replace loans I feel compelled to sell, not on the main market or the secondary market. Unless SS pull out some better loans, simple attrition will send me heading for the door.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 7, 2017 8:52:54 GMT
If that's true, then I see no reason why SS don't disclose the borrower's rate. It seems strange that SS were reading publishing the contracts up until the new lower rates were introduced... However, I'm not convinced by your argument. The rate hasn't dropped so that SS can be competitive; if that was the case we would be seeing 10%/11% 300k loans, whereas all these small loans on have dropped like a stone. I just don't see how the borrower's rate is relevant. You say it as if SS owe you a higher rate. If you don't like it don't invest. All the platforms are dropping their rates (save FS perhaps), you can always go elsewhere if you think SS rates are too low. How can you say that the borrowers rate is not relevant? That is the risk profile that platforms attach to borrowers No - I'm not saying SS owe me a higher rate - I'm saying they owe us a fair % of the return against the risk. If a borrowers is paying 18% then 12% is fair - if the borrower is paying 13% then 7% is fair. If if the borrower is paying 18% then 7% is not a fair return. All I'm asking is for some transparency - Investors are putting up 100% of loan, so I don't think that is too much to ask.
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adrianc
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Post by adrianc on Mar 7, 2017 9:36:39 GMT
I just don't see how the borrower's rate is relevant. You say it as if SS owe you a higher rate. If you don't like it don't invest. All the platforms are dropping their rates (save FS perhaps), you can always go elsewhere if you think SS rates are too low. How can you say that the borrowers rate is not relevant? Because it really isn't relevant. Do you demand to know what the supermarket's buy-price on a tin of beans is? No, because it's not relevant. The supermarket's sell price is the price you pay. Do you want a tin of beans at that price or not? SS's lender rate is the rate you receive. Do you want to lend your money at that rate or not? If their DD is inadequate to allow you to decide for yourself if that's a fair rate or not, then that's a separate issue... You know, most people around here are not stupid and don't need to be told they can invest elsewhere. They know, and telling them they can go elsewhere is condescending and irritating. I know what you're saying - and I agree that people here aren't stupid. But you would agree that intelligent people can often act in a stupid way, right? And there IS a lot of "entitlement" being shown on the forum recently. Some people seem to think that they're somehow owed a certain level of return, or a certain rate of deal flow, or a certain amount of information. They really aren't. The platforms are SELLING YOU SOMETHING. It's for you to decide if you want to be a customer or not. That decision is not a once-only-will-always-apply decision, it's an ongoing decision. The result of that decision may vary from loan to loan, and through the life of a loan, depending entirely on the information the platform provide to inform your buying decision. The existence of the SM makes that buying decision a reversible one.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 7, 2017 15:06:53 GMT
How can you say that the borrowers rate is not relevant? Because it really isn't relevant. Do you demand to know what the supermarket's buy-price on a tin of beans is? No, because it's not relevant. The supermarket's sell price is the price you pay. Do you want a tin of beans at that price or not? SS's lender rate is the rate you receive. Do you want to lend your money at that rate or not? If their DD is inadequate to allow you to decide for yourself if that's a fair rate or not, then that's a separate issue... You know, most people around here are not stupid and don't need to be told they can invest elsewhere. They know, and telling them they can go elsewhere is condescending and irritating. I know what you're saying - and I agree that people here aren't stupid. But you would agree that intelligent people can often act in a stupid way, right? And there IS a lot of "entitlement" being shown on the forum recently. Some people seem to think that they're somehow owed a certain level of return, or a certain rate of deal flow, or a certain amount of information. They really aren't. The platforms are SELLING YOU SOMETHING. It's for you to decide if you want to be a customer or not. That decision is not a once-only-will-always-apply decision, it's an ongoing decision. The result of that decision may vary from loan to loan, and through the life of a loan, depending entirely on the information the platform provide to inform your buying decision. The existence of the SM makes that buying decision a reversible one. Comparing a platform to a Supermarket is wrong. This is investing and risking capital, not buying a tin of beans. The contract is between the borrower and investors (i.e. P2P); SS act as a middle man and rightly take a fee which happens to be a Fee + %. No arguing with that. What I'm saying is getting slightly distorted; as I have said this is not about the rate, and I certainly don't feel entitled to 12%. I'm not going to lie and say I'm not disappointed that we may be seeing the end of 12% rates, I am. However, I understand the business model requires tweaking, and I understand platforms wanting to increase their loan books. What I dislike is the feeling that investors, the group putting up all the capital (and interest!) are being massively undercut. Previously, SS were all too happy to reveal that they received 0.5%, and at one stage they planned on publishing the contracts (they had a column for it, and it was even in the T&Cs - now both gone), but now we have no indication what rate the borrower is paying - something I argue is important when investing. After all, it will be SS DD that determine what rate the borrower pays, so why should investors not know that information?
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twoheads
Member of DD Central
Programming
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Post by twoheads on Mar 7, 2017 15:26:53 GMT
Meanwhile, the Lancashire 7% loan has been given a number: PBL165.
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Jeepers
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Post by Jeepers on Mar 7, 2017 18:00:57 GMT
How can you say that the borrowers rate is not relevant? Because it really isn't relevant. Do you demand to know what the supermarket's buy-price on a tin of beans is? No, because it's not relevant. The supermarket's sell price is the price you pay. Do you want a tin of beans at that price or not? SS's lender rate is the rate you receive. Do you want to lend your money at that rate or not? If their DD is inadequate to allow you to decide for yourself if that's a fair rate or not, then that's a separate issue... You know, most people around here are not stupid and don't need to be told they can invest elsewhere. They know, and telling them they can go elsewhere is condescending and irritating. I know what you're saying - and I agree that people here aren't stupid. But you would agree that intelligent people can often act in a stupid way, right? And there IS a lot of "entitlement" being shown on the forum recently. Some people seem to think that they're somehow owed a certain level of return, or a certain rate of deal flow, or a certain amount of information. They really aren't. The platforms are SELLING YOU SOMETHING. It's for you to decide if you want to be a customer or not. That decision is not a once-only-will-always-apply decision, it's an ongoing decision. The result of that decision may vary from loan to loan, and through the life of a loan, depending entirely on the information the platform provide to inform your buying decision. The existence of the SM makes that buying decision a reversible one. With tins of breads, you know what you're getting depending on the brand so you don't care what the supermarket paid. p2p loans are more like a pack of sausages in the supermarket, one pack cost them 20p... the other £2... there'll be all sorts in the 20p ones, pigs ears etc so you wouldn't buy. If one borrower is being charged 50%APR by SS... surely you'd be interested to know why another lender wouldn't offer a more competitive rate?
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Post by bracknellboy on Mar 7, 2017 20:42:30 GMT
With tins of breads, you know what you're getting depending on the brand so you don't care what the supermarket paid. p2p loans are more like a pack of sausages in the supermarket, one pack cost them 20p... the other £2... there'll be all sorts in the 20p ones, pigs ears etc so you wouldn't buy. If one borrower is being charged 50%APR by SS... surely you'd be interested to know why another lender wouldn't offer a more competitive rate? Yeah, I think you probably would know what you're getting, and it wouldn't be great, whatever the brand....I guess each to their own as to how they source their carb and gluten fix :-) Are 'tins of breads' and 'pigs ears' the new metaphors for the quality of much of the P2P offerings ? Where's that sell button.... p.s. Don't knock 'pigs ears' - the only animal that you can (reasonably) eat 'head to toe'.
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r1200gs
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Post by r1200gs on Mar 7, 2017 22:23:51 GMT
How can you say that the borrowers rate is not relevant? Because it really isn't relevant. Do you demand to know what the supermarket's buy-price on a tin of beans is? No, because it's not relevant. The supermarket's sell price is the price you pay. Do you want a tin of beans at that price or not? SS's lender rate is the rate you receive. Do you want to lend your money at that rate or not? If their DD is inadequate to allow you to decide for yourself if that's a fair rate or not, then that's a separate issue... You know, most people around here are not stupid and don't need to be told they can invest elsewhere. They know, and telling them they can go elsewhere is condescending and irritating. I know what you're saying - and I agree that people here aren't stupid. But you would agree that intelligent people can often act in a stupid way, right? And there IS a lot of "entitlement" being shown on the forum recently. Some people seem to think that they're somehow owed a certain level of return, or a certain rate of deal flow, or a certain amount of information. They really aren't. The platforms are SELLING YOU SOMETHING. It's for you to decide if you want to be a customer or not. That decision is not a once-only-will-always-apply decision, it's an ongoing decision. The result of that decision may vary from loan to loan, and through the life of a loan, depending entirely on the information the platform provide to inform your buying decision. The existence of the SM makes that buying decision a reversible one. And after I pointed out that the people around here don't need to be told that they can invest elsewhere, did you really need to tell us that people have a choice when it comes to being a customer or not? Your post is as condescending as the one I originally responded to. And at the risk of being condescending myself, given your closing remark, the existence of the secondary market is not something to be relied upon. But then, most of us know this, right?
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Post by bracknellboy on Mar 8, 2017 7:58:58 GMT
Please make sure the handbags are now fully put away.
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Post by chielamangus on Mar 8, 2017 9:33:26 GMT
Not handbags, nor cudgels - I just saw this as an exchange of views which is what I thought was the purpose of this forum. Is one allowed to voice an opinion here or not?
Well, here's mine anyway. I have sympathy for CD's view that asymmetrical information gives market power to one side which creams off the lion's share of the return. But that is a fact of life. It is also, in a competitive market, a temporary affair: any platform taking "rents" or surpluses will eventually find themselves losing borrowers and investors. But in the short term they make hay.
I don't buy into the analogy with the can of beans or pack of sausages from the supermarket. You buy your beans, consume them, and that is that. Whether the firm that makes the beans survives or not is not a matter of concern. There are plenty of other suppliers. But an SS loan is a lengthy contract between the investor and the borrowing entity, where the borrower's continuing health IS of concern. One thing contributing to the borrower's health is the cost of servicing loans, so the higher the interest rate charged, the greater the risk to firm's/project's viability. And investors bear most of the risk, not SS. So the interest rate paid by the borrower IS of concern to the investor.
There is an AC loan where investor pressure did lead to a lowering of the rate paid by the borrower, because it seemed the viability of the operation was in danger. Mind you, it still is - but perhaps it would all have folded without the investor action.
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Post by bracknellboy on Mar 8, 2017 10:31:21 GMT
I don't believe my post says stop exchanging views or discussing this specific topic. It is simply a request to make sure it stays constructive and 'friendly'. There are accusations and perceptions that one or other poster is being is being condescending etc. towards another: it is just a gentle reminder to keep the tone friendly before it drifts too far.
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