SteveT
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Post by SteveT on Mar 6, 2017 16:18:52 GMT
Not wishing to put anyone off unfairly, I've now run some basic figures to refine my previous "gut feel" estimates. Out of 76 loans I currently hold:
47 (62%) have been active less than 6 months
13 (17%) are between 6 and 9 months
9 (12%) are between 9 and 12 months
5 (6.5%) are between 12 and 18 months
2 (2.5%) are over 18 months
So more like 21% of my portfolio is more than 3 months overdue and in the twilight world of seemingly perpetual "No change"
Putting this in some perspective, my IRR after 2 years on FS is close to 9% (ignoring all unpaid accrued interest but assuming all lent capital is eventually repaid, effectively a trade-off) and I've not yet had a penny formally written off (although a couple of loans have seen FS cover small capital losses).
That said, roughly 20% of my stake money is still locked up in the >9 month loans...
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Mar 6, 2017 16:31:38 GMT
If you look at the email that came out recently there is a link to the "lies", sorry!, statistics page that shows the official figures fur repayment. Shame that words like cumulative and a line showing current loan book are not included to make the graphs more meaningful
I am also reducing my holdings by 75% through not choosing to participate in renewals to the same extent as my original stake. Two reasons 1, i have somewhere I consider better for risk reward for my situation and 2 I am irritated with many actions, or rather lack of some actions, of staff that are, after all, the custodians of our cash.
Good luck to those who are just joining. The secondary market used to be much easier to make money from than it is now.
Watch out if you are tempted by bonuses for £5k and intend to sell. The accrued bonus interest is lost on the part you sell as per terms and conditions but not explained in previous posts.
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Liz
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Post by Liz on Mar 6, 2017 16:52:07 GMT
Not wishing to put anyone off unfairly, I've now run some basic figures to refine my previous "gut feel" estimates. Out of 76 loans I currently hold: 47 (62%) have been active less than 6 months 13 (17%) are between 6 and 9 months 9 (12%) are between 9 and 12 months 5 (6.5%) are between 12 and 18 months 2 (2.5%) are over 18 months So more like 21% of my portfolio is more than 3 months overdue and in the twilight world of seemingly perpetual "No change" Putting this in some perspective, my IRR after 2 years on FS is close to 9% (ignoring all unpaid accrued interest but assuming all lent capital is eventually repaid, effectively a trade-off) and I've not yet had a penny formally written off (although a couple of loans have seen FS cover small capital losses). That said, roughly 20% of my stake money is still locked up in the >9 month loans... I bet these figures are no worse than any other platform offering 6-month loans. Does anyone know if the interest earned after the six months is default interest or not?
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elliotn
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Post by elliotn on Mar 6, 2017 16:56:54 GMT
MT/Coll have 6 month loans that renew on the exact day, any delays are rolled into renewals or extensions with potential for default interest which I have not earned on FS.
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Post by Deleted on Mar 6, 2017 17:07:32 GMT
Not wishing to put anyone off unfairly, I've now run some basic figures to refine my previous "gut feel" estimates. Out of 76 loans I currently hold: 47 (62%) have been active less than 6 months 13 (17%) are between 6 and 9 months 9 (12%) are between 9 and 12 months 5 (6.5%) are between 12 and 18 months 2 (2.5%) are over 18 months So more like 21% of my portfolio is more than 3 months overdue and in the twilight world of seemingly perpetual "No change" Putting this in some perspective, my IRR after 2 years on FS is close to 9% (ignoring all unpaid accrued interest but assuming all lent capital is eventually repaid, effectively a trade-off) and I've not yet had a penny formally written off (although a couple of loans have seen FS cover small capital losses). That said, roughly 20% of my stake money is still locked up in the >9 month loans... interesting stuff, thanks for sharing - I have just dipped toe in at FS, moving some of my SS funds, given the current 'unrest' there. I think that after now investing in 3/4 platforms, there are issues wherever you put your hard earned cash - it just means that you may have to adjust your risk strategy to suit. For example on FS, I intend to hold new loans only for six months and not then renew - may be giving up some good loans, but believe this gives me little risk unless I am missing the point? Interested to know your thoughts! Cheers Shavingcream
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SteveT
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Post by SteveT on Mar 6, 2017 17:12:42 GMT
I intend to hold new loans only for six months and not then renew - may be giving up some good loans, but believe this gives me little risk unless I am missing the point? Interested to know your thoughts! I too don't roll over funds into renewals very often, aside from a few where the security is particularly good and the first 6 months' interest was paid on time. However, not one of my dozen "longest running" loans is a renewal loan ...
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jamesc
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Post by jamesc on Mar 6, 2017 17:14:58 GMT
I find that I must put the other side of the case. FS is currently my favourite site and it will shortly be my largest p2p holding (it used to be SS).
My experience of returns have been much better than other's with an IRR of over 14% if I include accrued on all loans other those that are overdue (which are only 11%) of my current portfolio.
Its one of the few sites that have a constant flow of good quality loans on a variety of assets, (although there are some dogs ), they don't price by liquidity in the way SS are doing the current loan on the SS pipeline at 7% would be at 12% here.
I find that the online chat staff are very helpful and if required the directors will call you.
Yes there are some downsides the biggest is lack of liquidity, to sell any meaningful amount of loans you need to discount quite heavily, however the presence of a Prem/dis SM means there are possibilities to minimise tax.
Other downsides include poor updates on overdue loans although the frequency has improved and as interest is not retained LTV'S are technically higher than stated. And some loans can take a long time to fill although the good ones usually fill in a few hours.
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Post by Deleted on Mar 6, 2017 17:20:00 GMT
I intend to hold new loans only for six months and not then renew - may be giving up some good loans, but believe this gives me little risk unless I am missing the point? Interested to know your thoughts! I too don't roll over funds into renewals very often, aside from a few where the security is particularly good and the first 6 months' interest was paid on time. However, not one of my dozen "longest running" loans is a renewal loan ... -thanks for this, - I thought all new loans ran for six months and are either redeemed or renewed, either way I do not tick the renew box. Therefore I do not understand your last point - i.e how can you have loans that are more than six months if they are not renewals. Sorry if being thick, but I am beginning to think there is a gap in my strategy/ or I am not understanding how FS works somehow. Please be patient with me!! Cheers S
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elliotn
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Post by elliotn on Mar 6, 2017 17:25:49 GMT
Loans that are overdue ie not redeemed or renewed (ie interest paid up to date or mv uplift) by the borrower, in effect in default of their repayment date as were nearly all my short dated loans bought in Oct/Nov. Edit - crossed with SteveT |
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SteveT
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Post by SteveT on Mar 6, 2017 17:27:01 GMT
I too don't roll over funds into renewals very often, aside from a few where the security is particularly good and the first 6 months' interest was paid on time. However, not one of my dozen "longest running" loans is a renewal loan ... -thanks for this, - I thought all new loans ran for six months and are either redeemed or renewed, either way I do not tick the renew box. Therefore I do not understand your last point - i.e how can you have loans that are more than six months if they are not renewals. Sorry if being thick, but I am beginning to think there is a gap in my strategy/ or I am not understanding how FS works somehow. Please be patient with me!! Cheers S All FS loans SHOULD run for 6 months before being repaid or renewed but, until the borrower actually stumps up the interest (if they wish to renew) or the capital + interest (if they wish to repay) then loans carry on accruing further unpaid interest as each day passes. Don't get me wrong, I still like many aspects of FS and continue to lend actively. However the 6 month lag between most lenders' first investments and their first insight into the "normal" dynamics of repayment can catch people out. I know I was surprised at first. If I included all my unpaid interest in my IRR calculation then it would be up around 15%. Conversely, if I assumed that all my loans >1 year will repay only 50% of capital and no interest, my XIRR would be close to zero. Only time will tell, but I reckon 8-9% is probably about right in the current climate, rather less if the economy takes a bath.
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mikes1531
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Post by mikes1531 on Mar 7, 2017 3:52:29 GMT
My experience of returns have been much better than other's with an IRR of over 14% if I include accrued on all loans other those that are overdue (which are only 11%) of my current portfolio. If I included all my unpaid interest in my IRR calculation then it would be up around 15%. & SteveT: Is it fair to presume that you've been making investments that qualify for FS's bonuses for large investments? If not, how do you manage to achieve 14-15% returns when nearly all FS loans pay less than that?
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SteveT
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Post by SteveT on Mar 7, 2017 7:02:07 GMT
No, I think I've only ever reached a bonus threshold on one (very low LTV) loan. However, I predominantly buy my loan parts at a discount on the SM (via a company account)
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 7, 2017 11:30:04 GMT
SteveT -thanks for this, - I thought all new loans ran for six months and are either redeemed or renewed, either way I do not tick the renew box. Therefore I do not understand your last point - i.e how can you have loans that are more than six months if they are not renewals. Sorry if being thick, but I am beginning to think there is a gap in my strategy/ or I am not understanding how FS works somehow. Please be patient with me!! Cheers S All FS loans SHOULD run for 6 months before being repaid or renewed but, until the borrower actually stumps up the interest (if they wish to renew) or the capital + interest (if they wish to repay) then loans carry on accruing further unpaid interest as each day passes. Don't get me wrong, I still like many aspects of FS and continue to lend actively. However the 6 month lag between most lenders' first investments and their first insight into the "normal" dynamics of repayment can catch people out. I know I was surprised at first. If I included all my unpaid interest in my IRR calculation then it would be up around 15%. Conversely, if I assumed that all my loans >1 year will repay only 50% of capital and no interest, my XIRR would be close to zero. Only time will tell, but I reckon 8-9% is probably about right in the current climate, rather less if the economy takes a bath. The SM currently has several 1st charge loans with very low LTV's, available at affective rates of 20%+. These could easily boost your IRR return above 15%.
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SteveT
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Post by SteveT on Mar 7, 2017 12:21:48 GMT
SteveT The SM currently has several 1st charge loans with very low LTV's, available at affective rates of 20%+. These could easily boost your IRR return above 15%. Yup, those are the sort of loan parts I reinvest into whenever one of my existing holdings repays. However the "effective rate" quoted by FS is based on the loan repaying on the due date. As soon as they go weeks / months overdue, the effect of the discount declines. I'll often "mark" a new loan I like the look of by buying the minimum £25 when it first launches, then buy in more seriously at 45-90 days remaining if/when sensible discounts are being offered.
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mikes1531
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Post by mikes1531 on Mar 7, 2017 14:07:38 GMT
If I included all my unpaid interest in my IRR calculation then it would be up around 15%. : Is it fair to presume that you've been making investments that qualify for FS's bonuses for large investments? If not, how do you manage to achieve 14-15% returns when nearly all FS loans pay less than that? No, I think I've only ever reached a bonus threshold on one (very low LTV) loan. However, I predominantly buy my loan parts at a discount on the SM (via a company account) : That explains it! But it also means that the good return you've accomplished is unachievable by those of us who don't have a company account we can use that way, and that makes it rather irrelevant for us. I haven't a clue what fraction of FS investors do have company accounts -- that's probably a good subject for a poll! -- but perhaps it would be appropriate if you're going to report the great returns you've achieved that you make a point of mentioning the fact that it's a company account lest people with 'ordinary' accounts think it's something they could do as well.
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