The only default I have had so far was from a D5 which was re-written before any repayments had been made. I believe Harmoney was/is more focused on vacuuming application fees.
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This change certainly has the potential for a huge windfall for Harmoney if borrowers rewrite for lower interest rates. Guessing they have in excess of 10,000 active loans, at $500 a piece, $5,000,000.......
Added: Not sure I can see this happening, time will tell. Harmoney would be veerrryyyy busy processing that volume of loan rewrites? As would lenders be having to re-invest!!!
Why would you lend out for 6.99% interest less fees? That's a terrible rate of return!
Hit $10k interest woooooooo
Attachment 9036
Still gonna keep withdrawing to I get down to about $50k and then set up some auto lends
While we lenders will see a drop in interest, it will also affect Harmoney with their lenders fees peg to interest. So, my take is that what they lost in that, they make up in volume. Trying to attract more borrowers and also upping what they can borrow, especially for D, E and F loans. In the short term, the borrowers fees on rewrites will give them a boost too as Myles pointed out.
And I am with RMJH that it is "meeting the market story not a risk re-evaluation".
Let us hope that their default rates are now much more accurate. And that they are not lowering their standards of accepting loans!
Yes agree. Furthermore the length of time it will take to migrate new into old, we won't actually know for 12 mths +.
I think they should begin new analysis alongside old so we know where we're at.
Umm, the 5.94% is quoted per year, and the 15% fee is when received (and with the power of compounding interest etc ) - so its incorrect to subtract 0.15 from 5.94.
A single loan is actually worth 0.03% over the duration of the loan.
10k at 6.99% Interest Rec H fee 15% Aug. 2017 $197.96 $139.71 $58.25 $8.74 Sept. 2017 $197.96 $140.53 $57.44 $8.62 Oct. 2017 $197.96 $141.35 $56.62 $8.49 Nov. 2017 $197.96 $142.17 $55.79 $8.37 Dec. 2017 $197.96 $143.00 $54.97 $8.25 Jan. 2018 $197.96 $143.83 $54.13 $8.12 Feb. 2018 $197.96 $144.67 $53.30 $8.00 Mar. 2018 $197.96 $145.51 $52.45 $7.87 Apr-18 $197.96 $146.36 $51.60 $7.74 May-18 $197.96 $147.21 $50.75 $7.61 Jun-18 $197.96 $148.07 $49.89 $7.48 Jul-18 $197.96 $148.93 $49.03 $7.35 Aug. 2018 $197.96 $149.80 $48.16 $7.22 Sept. 2018 $197.96 $150.67 $47.29 $7.09 Oct. 2018 $197.96 $151.55 $46.41 $6.96 Nov. 2018 $197.96 $152.43 $45.53 $6.83 Dec. 2018 $197.96 $153.32 $44.64 $6.70 Jan. 2019 $197.96 $154.21 $43.75 $6.56 Feb. 2019 $197.96 $155.11 $42.85 $6.43 Mar. 2019 $197.96 $156.02 $41.95 $6.29 Apr-19 $197.96 $156.92 $41.04 $6.16 May-19 $197.96 $157.84 $40.13 $6.02 Jun-19 $197.96 $158.76 $39.21 $5.88 Jul-19 $197.96 $159.68 $38.28 $5.74 Aug. 2019 $197.96 $160.61 $37.35 $5.60 Sept. 2019 $197.96 $161.55 $36.42 $5.46 Oct. 2019 $197.96 $162.49 $35.48 $5.32 Nov. 2019 $197.96 $163.44 $34.53 $5.18 Dec. 2019 $197.96 $164.39 $33.58 $5.04 Jan. 2020 $197.96 $165.35 $32.62 $4.89 Feb. 2020 $197.96 $166.31 $31.66 $4.75 Mar. 2020 $197.96 $167.28 $30.69 $4.60 Apr-20 $197.96 $168.25 $29.71 $4.46 May-20 $197.96 $169.23 $28.73 $4.31 Jun-20 $197.96 $170.22 $27.75 $4.16 Jul-20 $197.96 $171.21 $26.76 $4.01 Aug. 2020 $197.96 $172.21 $25.76 $3.86 Sept. 2020 $197.96 $173.21 $24.76 $3.71 Oct. 2020 $197.96 $174.22 $23.75 $3.56 Nov. 2020 $197.96 $175.23 $22.73 $3.41 Dec. 2020 $197.96 $176.25 $21.71 $3.26 Jan. 2021 $197.96 $177.28 $20.68 $3.10 Feb. 2021 $197.96 $178.31 $19.65 $2.95 Mar. 2021 $197.96 $179.35 $18.61 $2.79 Apr-21 $197.96 $180.40 $17.57 $2.64 May-21 $197.96 $181.45 $16.52 $2.48 Jun-21 $197.96 $182.50 $15.46 $2.32 Jul-21 $197.96 $183.57 $14.40 $2.16 Aug. 2021 $197.96 $184.64 $13.33 $2.00 Sept. 2021 $197.96 $185.71 $12.25 $1.84 Oct. 2021 $197.96 $186.79 $11.17 $1.68 Nov. 2021 $197.96 $187.88 $10.08 $1.51 Dec. 2021 $197.96 $188.98 $8.99 $1.35 Jan. 2022 $197.96 $190.08 $7.89 $1.18 Feb. 2022 $197.96 $191.18 $6.78 $1.02 Mar. 2022 $197.96 $192.30 $5.67 $0.85 Apr-22 $197.96 $193.42 $4.55 $0.68 May-22 $197.96 $194.55 $3.42 $0.51 Jun-22 $197.96 $195.68 $2.29 $0.34 Jul-22 $197.96 $196.82 $1.15 $0.17 $1,877.91 $281.69 xirr 1-Aug-17 10000 -10000 31-Jul-22 $11,596.22 $11,596.22 3% return over 5 years
but then again maybe im wrong ?
This...
As many seem to do here, you have not taken into account reinvestment of return of the principal. Your calculation is not investing 10,000 for the entire time, only for the first month, the second month you are investing 10,000 - 197.96, third month 10,000 - (2 x 197.96) ... last month only 197.96. You have all that capital to reinvest along the way.
If you reinvest, you will be left with the 10,000 still invested at the end, but your monthly return for every month is $58.25 - $8.74 = $49.51 for 60 months - $2,970.60. Which is 29.71% over the 5 years or 5.94% pa.
If you reinvest the interest as well then it will be ... $3,450 which is 6.9% pa... (not including losses due to tax or defaults)
If you don't want to reinvest, then that's a different calculation again, but it wont be 3%.
Beats me why so many new listings at the moment! Why not wait a week?
Due to the competition that they are running on the front of the website perhaps ?
Says to me left hand not speaking to the right hand - ie marketing dept with strategic direction.
Why run a comp when your weeks away from changing the rates - all the new "johns" will be on original rates and may wish to swap - unless thats the plan.
Remind me never to borrow money from you myles - as one of us is going to be disappointed at the end of 5 years.:p