Harmoney

[JohnMac]

Hay, im no whizz and i enjoyed trying to find information about secant. If a person pays you back early is that not a good thing ? as the payments upto that date have an interest component calculated out to the end of loan. Once you get your money back you can lend it out again. As the interest is preloaded to the front of the loan.

I spent a considerable amount of time corresponding with Harmoney regarding the Secant method vs the traditional method of calculating interest and the Secant method resulted in less interest. Harmoneys argument was that the borrower was allowed to pay the loan off early or in erratic periods which was why the interest was less. The traditional method presumed the loan would be paid off weekly or monthly etc. I wasn't happy with their explanation and asked the finance watchdog to confirm that this was acceptable. And as I said they were happy with it. I still don't understand Secant. Harmoney did supply me with an example of a Secant loan so I was able to compare the two methods together. Note that I was comparing the loans as if they would last their full 36 month or 60 month period. I agree that if the borrower paid the loan off quicker a significant amount of interest would be paid but then again that applies to both methods.

[Darchie]

I googled that Secant method & it is indeed confusing .. i couldn't find anything much i could relate to!
That example harmoney supplied might be worth me also asking for! By looks this method does make quite a difference to amount of interest earned over larger principal amounts and years!

[JohnMac]

I googled that Secant method & it is indeed confusing .. i couldn't find anything much i could relate to!
That example harmoney supplied might be worth me also asking for! By looks this method does make quite a difference to amount of interest earned over larger principal amounts and years!

More than happy to send it to you but not sure that Harmoney would be happy with me if I did or if there is any privacy issues. If you ask Mark Bardi to send the same example he sent me I am sure he won't mind ( I am sure he will know who I am, I don't think there has been too many people causing a fuss about their Secant method) . I must admit I did not try too hard to understand the Secant method as it appeared to be more focussed on statistics that finance.

[777]

Did lack of diversification concern you?

Well I had 160 loans and to date 4 "write offs". I have 2 in arrears but both are paying each month and simply behind so not too concerned about them yet.
Gradually divesting and down to 60 loans.

Same diversification as someone with $4000 with 160 loans with $25/loan.

[Harvey Specter]

Hay, im no whizz and i enjoyed trying to find information about secant. If a person pays you back early is that not a good thing ? as the payments upto that date have an interest component calculated out to the end of loan. Once you get your money back you can lend it out again. As the interest is preloaded to the front of the loan.

The fact interest is preloaded is irrelevant as you continually reinvest your money, you are getting interest on they full amount you have invested. There is no early repayment or prepaid interest on early repayment.

However, defaults are more likely to happen in the first year. So what churn results in is all your bad loans default, and all your good loans repaying so you reinvest that money into more loans, some of which will default. So churn increases your chance of hitting a bad loan as you are not harvesting the good loan for the full 3-5 years.

[RMJH]

RAR updated and has increased.

Mine is also up but not much as the average so my RAR is now below average. I seem to have been overly hurt by write-offs so clearly not diversified enough.

Based on my experience, don't play this game unless you invest more than $10k. Put s you into the next fee group too. If you are below this, top up before the fee increase in July or withdraw. I may have been a bit hasty given in was only trialling and more to invest but I seem to have been on the unlucky side on average.

Has anyone got 6 figure s invested and In private negotiations for an even lower fee?

Yes but I don't have a problem with the fees. When you look at other managed investments you can pay a lot more for a lot less legwork. I want this market to grow so I can invest more with less effort and get good information to refine use of filters and diversification. Competition will trim fees in due course if they prove to be excessive.

[kiwi_on_OE]

I googled that Secant method & it is indeed confusing .. i couldn't find anything much i could relate to!
That example harmoney supplied might be worth me also asking for! By looks this method does make quite a difference to amount of interest earned over larger principal amounts and years!

I previously missed this chat about the interest calculations etc. From what I see Secant is a method for determining the interest rate paid from the amounts that have been paid, not vice versa.

Harmoney state in a more than one of their documents eg. the Investor Agreement, that interest is calculated daily on the outstanding balance of a loan account and is payable monthly in arrears.

So if you look at the monthly statements they send out you should be able to see, and confirm, loan balances, all the loan repayments, interest accruals etc. You won't be able to go back for the whole of the loan, but you should be able to see, and confirm, what has happened since Dec last year.

I would be very interested to see the balances, payments, interest etc. for this loan since Dec if the numbers don't match.

[kiwi_on_OE]

Anyone heard any rumours of Harmoney cutting interest rates? I see an F4 loan, 60174, at a rate of 39.61%. But I thought F4s were 39.98%, F3s at 39.61%?

[Saamee]

Anyone heard any rumours of Harmoney cutting interest rates? I see an F4 loan, 60174, at a rate of 39.61%. But I thought F4s were 39.98%, F3s at 39.61%?

Current Borrower Rates = HARMONEY RATES @ MAR 16.jpg


Previous Borrower Rates = Attachment 8067


Just guessing, another Harmoney system error?

[Darchie]

Looks like this F4 has been given the F3 interest rate ... Wonder if Harmoney will be looking into fixing this error?