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Post by davee39 on Jul 19, 2017 8:25:43 GMT
GeorgeBanco is a payday loan type company with rates of around 62% www.georgebanco.com/This is not the sort of business I would have expected RS to have been involved with. The problem is a low interest rate environment and difficulties in increasing volume in the conventional personal loan market. We now know that while RS has been acquiring a glossy 'name' to smarten up it's board ahead of a float it has been making some rather murky high risk loans. And yes, we can criticize them following their Mea Culpa, because we would still be in the dark had they not been found out. The RS email indicates that the GeorgeBanco & Vehicle Leasing loans are paying back as the underlying borrowers pay back. It is, however, standing behind Adpod. I take that to mean it is pretty much a writeoff & the monthly repayments come from the RS balance sheet - hence the recent additional capital. Once again we have some dodgy financial dealings, and no one apparently is responsible. No wonder the provision fund rules had to be changed a few months ago.
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dorset
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Post by dorset on Jul 19, 2017 8:32:47 GMT
I don't believe that any money was lost on the 3rd entity. The other two entries related to loans to a single wholesale lender. I don't know offhand whether the two vehicle finance companies RS have acquired were loss making. The adminstrators' report refers to problems at a 3rd operating Sorry all messed up my first quote. Just asking of WestonKev that if he's "long" on RS paying 2.5% for one year when you can get 1.85% one year with FSC cover then I'd hate to see what he is "short" on.
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voss
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Post by voss on Jul 19, 2017 9:23:52 GMT
I always thought there was something not quite right in a company that persisted in having black on dark grey and purple on light purple on its web pages even after I pointed this (non-W3C compliant) horror out to them.
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Post by WestonKevTMP on Jul 19, 2017 9:37:54 GMT
Sorry all messed up my first quote. Just asking of WestonKev that if he's "long" on RS paying 2.5% for one year when you can get 1.85% one year with FSC cover then I'd hate to see what he is "short" on. I wouldn't lend in that market, no. Although I understand why people do, there are many motives for using the easy access product. You can typically get nearer 3% in the rolling market, and that is a sufficient enough risk premium for many people. I only lend in the 5-year as I'm a long term saver/investor. I aim for 5% AER, although this isn't always possible with the imbalance of lenders and repayments, vs. their reduced lending volumes.
Kevin.
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jlend
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Post by jlend on Jul 19, 2017 9:42:22 GMT
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rgog
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Post by rgog on Jul 19, 2017 10:46:35 GMT
New here but been with RateSetter for several years, never received the e-mail as I pulled out of the 1 year market and only use the rolling but even on that have found it impossible of late to even match inflation. Not keen on losing money in real terms and still having the level of risk (even more so now the level is even larger than I thought!). Think it is time to ditch RS totally.
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pablo77
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Post by pablo77 on Jul 19, 2017 10:46:40 GMT
I always thought there was something not quite right in a company that persisted in having black on dark grey and purple on light purple on its web pages even after I pointed this (non-W3C compliant) horror out to them. The design part for me was also a bit off, but I have learned that even biggest banks like Barclays or Lloyds can suffer from poor UX and unexplainably ridiculous layouts.
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pickles
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Post by pickles on Jul 19, 2017 11:21:03 GMT
I opened 2 accounts last year, with the promise of £100 bonus if I kept my money in a year..well one is about 10 days off that, the other about 50...in a dilemma about what best to do..the cynic in me thinks the email is trying to encourage investors to sell out as they have over committed with the £100 offer ??..Thoughts ? If I understand correctly you have 30 days to exercise the fee-free sellout, so you can still get the bonus on the first of those accounts, provided there is someone willing to take on your loan parts Can anyone tell me whether the proceeds of a sell-out would go into the holding account or be returned directly to a bank account? I've been thinking of getting rid of my five-year stuff rather than letting it gradually wind down as four more years is too high risk even at 6%. If it goes into the holding account I can leave a grand in there for the extra two months to get the £100 bonus, if not it's probably more expensive than selling out by the normal method at some point in the future.
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dermot
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Post by dermot on Jul 19, 2017 11:28:56 GMT
Currently, I've been drawing down weekly, but I think I'll pause that in favour of rolling to see if 5%+ on 5yr returns towards the end of the offer period.
It doubtless all depends on how many people take up the offer and do a runner!
If there is no improvement in rates, I'll probably go back to 'natural' drawdown pro tem, but not exit entirely - so long as there are no more bombshells!
That's about the limit of my strategic thinking for the day ...
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robski
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Post by robski on Jul 19, 2017 11:37:52 GMT
Ive been tooing and froing on this but decided this morning that I am going to request a closure
Assuming its going to be an all out effort like the last time I am immediately drawing down my repayments as they come in, then in about 3 weeks will send the email asking to accept the buyout option This will allow me to see what happens over the next few weeks just in case rates leap, but I am pretty certain I will stop investing in RS, although could be tempted back it will now only be into rolling for the next 12 months minimum
Im going to move circa 40% to MT and the rest into low interest savings over time, which will match my return to current and be fairly similar on overall risk I believe. Will look at a few more current accounts etc, but personally I find the effort to control a chain of money moving around isn't really worth the extra marginal returns. As a start I opened the regular saver with Virgin this morning, £250 a month max deposit with 2.25% interest. 1 standing order to setup so it is funded monthly, no hastle.
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Post by WestonKevTMP on Jul 19, 2017 11:46:39 GMT
The amusing irony of this, is that I would expect RateSetter to replace lender withdrawals from the rolling market. This means with the borrowers on consistent APRs, everytime a lender cashes out of a 5-year loan say on 6% AER, replaced with 3% AER the difference is pocketed by RateSetter Finance.... In that example, that's a 3% annualised return....
I don't know if they had a choice on timing, but this time of the month was a risk. Long term lenders will know the "day 21" effect where rates are highest. This is due to reduced liquidity when borrower repayments are at their lowest, and new lender money low as it's not a traditional pay-day.
Right now the rolling is down to around ~£5m. Historically this is very high, bit recently has been well above £10m. So with rates around 3%, clearly there is some selling out happening but right now it's manageable and profitable for all remainders (RateSetter get higher income, lenders are getting 3%+ AER). Once they get to end of month, liquidity rises significantly.
Kevin.
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ashtondav
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Post by ashtondav on Jul 19, 2017 12:38:14 GMT
Five year money at 4.7% right now. Will we see 5% by the weekend? Probably not!
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Post by WestonKevTMP on Jul 19, 2017 14:38:18 GMT
Five year money at 4.7% right now. Will we see 5% by the weekend? Probably not! Cash from Chaos?
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alender
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Post by alender on Jul 19, 2017 15:16:17 GMT
The amusing irony of this, is that I would expect RateSetter to replace lender withdrawals from the rolling market. This means with the borrowers on consistent APRs, everytime a lender cashes out of a 5-year loan say on 6% AER, replaced with 3% AER the difference is pocketed by RateSetter Finance.... In that example, that's a 3% annualised return.... Looks like this will increase the chances of a lock in in the rolling market if there is more bad news either from RS or P2P in general, seems RS are basing themselves on the Northern Rock Model.
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Post by buggerthebanks on Jul 19, 2017 22:25:36 GMT
As others have commented, had RS not taken the action they have, this would've flattened the provision fund. But is our wider banking system any safer? The Co-operative Bank (for example) has around £30B on deposit, but the FSCS (upon which we rely to safeguard our savings) only has assets of around £4B. That's quite a gap to fill.
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