ding
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Post by ding on Apr 27, 2017 23:12:55 GMT
Simple question, but not obvious IMO.
I've put some IFISA money on MT FS - so not worried about TAX implications.
Assuming loans are paid on time..... What does this mean:
Capital:£100
Accrued Interest:£5.16
Premium / Discount:-£0.60 (0.60%)
Total Price:£104.56
Effective Rate (pa):18.29%
-- Days remaining 36
I was expecting to deposit £100. And for 36 days get ~18%.
But not sure!
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investibod
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Post by investibod on Apr 27, 2017 23:24:25 GMT
Simple question, but not obvious IMO. I've put some IFISA money on MT - so not worried about TAX implications. Assuming loans are paid on time..... What does this mean: Capital:£100 Accrued Interest:£5.16 Premium / Discount:-£0.60 (0.60%) Total Price:£104.56 Effective Rate (pa):18.29% -- Days remaining 36 I was expecting to deposit £100. And for 36 days get ~18%. But not sure! Are you sure that this is MoneyThing? I think probably not. MT does not sell at premium/discount, and you do not buy accrued interest. I think that this might be a different platform. EDIT: I forgot to say "Welcome to the forum!" 
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fogey
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Post by fogey on Apr 27, 2017 23:26:32 GMT
Are you in the right place ? To my knowledge MT do not have an ISA available yet.
Edit: looks like you got this message from someone else at the same time as mine !
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elliotn
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Post by elliotn on Apr 28, 2017 3:29:41 GMT
Simple question, but not obvious IMO. I've put some IFISA money on MT - so not worried about TAX implications. Assuming loans are paid on time..... What does this mean: Capital:£100 Accrued Interest:£5.16 Premium / Discount:-£0.60 (0.60%) Total Price:£104.56 Effective Rate (pa):18.29% -- Days remaining 36 I was expecting to deposit £100. And for 36 days get ~18%. But not sure! There are a couple of threads for IFISA on the Funding Secure forum which is the closest to MT with an IFISA and has a non-par market as you discuss. MT have secured their FCA authorisation but have currently prioritised deveoping the loan book which already has sufficient lender demand vs deal flow.
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SteveT
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Post by SteveT on Apr 28, 2017 6:40:50 GMT
(Mod hat on) ding, if you can confirm that you actually mean Funding Secure, I'll then move your thread to the FS board |
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ding
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Post by ding on Apr 30, 2017 11:07:36 GMT
Apologies guys, this should have been posted in FundingSecure.
I don't find these sites memorable when they use common names fund/money/save/rate...
SteveT, please move. Thanks.
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elliotn
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Post by elliotn on Apr 30, 2017 11:26:09 GMT
Apologies guys, this should have been posted in FundingSecure. I don't find these sites memorable when they use common names fund/money/save/rate... SteveT, please move. Thanks. Fortunately, you should see Save less which may help. It's an FcaThing 
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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 Apr 30, 2017 11:32:28 GMT
Simple question, but not obvious IMO. I've put some IFISA money on MT FS - so not worried about TAX implications. Assuming loans are paid on time..... What does this mean: Capital:£100 Accrued Interest:£5.16 Premium / Discount:-£0.60 (0.60%) Total Price:£104.56 Effective Rate (pa):18.29% -- Days remaining 36 I was expecting to deposit £100. And for 36 days get ~18%. But not sure! In answer to your question. You are getting 0.6% discount for holding the loan part for just 36 days. That is roughly a tenth of a year. So you're actually getting a discount of about 6% calculated annually. Add that to the underlying rate which is probably 12%, and you get roughly 18%. So assuming the loan repays on time you will get an equivalent return of about 18%.
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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 Apr 30, 2017 12:56:44 GMT
If the loan is 12% you would expect £6 interest for a 183 day loan.
This means you will make £1.04 if the loan pays on time for your outlay of £104.56. Less tax on the whole £6 at your marginal rate if all allowances are fully utilised.
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Post by mrclondon on Apr 30, 2017 13:37:08 GMT
Simple question, but not obvious IMO. I've put some IFISA money on MT FS - so not worried about TAX implications. Assuming loans are paid on time..... What does this mean: Capital:£100 Accrued Interest:£5.16 Premium / Discount:-£0.60 (0.60%) Total Price:£104.56 Effective Rate (pa):18.29% -- Days remaining 36 I was expecting to deposit £100. And for 36 days get ~18%. But not sure! Welcome to the forum, and I have now moved the thread onto the FS board as requested. The example you have quoted means: You will pay out of your ISA £104.56 to buy £100 loan capital and the right to £5.16 interest (if the borrower pays it), plus future accrual of daily interest at 13% pa / 365 on the £100 of capital If the borrower repays in 36 days time I think you'll receive £106.44 (£100 capital + £5.16 interest you bought the right to + £1.28 interest on £100 for 36 days ). So you'll have made a gain of £106.44 - £104.56 = £1.88 over 36 days; which as a annual percentage return on the £104.56 outlay is 1.88 / 104.56 / 36 * 365 = 18.2% So for non tax payers (including ISA investors) buying on the SM, the quoted effective rate is the equivalent annual return on the expected maturity date based on the total purchase price.
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ding
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Post by ding on Apr 30, 2017 14:41:56 GMT
Thanks for comprehensive explanation |
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