Launch of post-term bonuses and cashback on new tranches

Once was simple and I knew where I was, now not so sure and ...............  

Cooling_dude,

I very much doubt it is just a bug, since on Lendy's website the following clearly states that interest rates are accrued while up for sale and payable if sale is cancelled:

"If a loan part sale is cancelled then you will be reinstated the amount of interest that had accrued for the period it was up for sale, and you shall receive the accrued interest at the end of the month when interest payments are made to investors accounts."

See here: support.lendy.co.uk/hc/en-us/articles/115003956505-How-can-I-cancel-the-sale-of-my-loan-part-

izigor in situations like this you should always chase the platform, though a little shared head scratching here can be useful to you, to others, and to platforms...... so no harm in bouncing your situation off the commons .

I would be most interested to see a Lendy loan agreement to see how it defines 'default'.  I expect that most ordinary people consider a default to be when a party to a contract fails to keep the terms of the contract.  There may be a bit of grace built into the contract, but I'd guess that once the prepaid interest runs out and the borrower doesn't repay the loan, or start paying interest monthly in advance, the contract will say that is a condition of a default.

But, of course, that doesn't stop Lendy from deciding not to declare a loan to be a default in public if it doesn't suit their purpose.  I can understand their position of not wanting to lose control of a loan by calling in LPA receivers too quickly in a situation where they're confident the loan is well enough secured that repayment of all capital and accrued interest would be achieved in a recovery situation, but it still seems to me that the loan is in default even if Lendy haven't declared it to be.

1) From the numbers in the 'Bonus Interest' column -- before it disappeared -- it seemed pretty clear that it was accrued in monthly chunks at the end of the month.  Whether it's the same when the column reappears is anyone's guess.

2) An interesting question, and one that Lendy have to answer clearly in advance if they want the new policy to have the desired effect.  Otherwise people will dismiss the incentives as being too 'iffy' to affect their behaviour.  IMHO they'll also need to make clear that an extension can be granted only if the borrower clears all their arrears, as otherwise there would be too much scope for granting extensions to save themselves money as noted by twoheads in 2b above. 

In the past I've assumed that borrowers were charged default penalties when loans became overdue even if Lendy did not pass any of that along to their investors.  It would be too easy for them to continue to do that if they granted extensions easily.  Unless, of course, the reason that they're starting to pay default interest bonuses to investors is pressure from the FCA.  And, particularly if that's the case, once bonus interest is accrued it ought not be allowed to evaporate just because an extension is granted subsequently.

8.33% is unavoidable when you're talking about 1/12th 😉. But I at least used it as a scale up for monthly interest rather than thinking it is a bullet payment of 1/12th of investment amount which I think very unlikely although you can read the email that way.