For the past six months my repayments have been near to the same. I deliberately target 36 month terms and low repayment percentages, which leads to higher cash flow and more of my loans being topped up.
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May be of interest to many here.. Heartland bank restructuring and listing on ASX. And they own a decent chunk of Harmoney.. https://www.nzherald.co.nz/business/...ectid=12099133
HARMONEY NARROWS LOSS AS FEE INCOME SURGES
Harmoney has posted a March year loss of $1.9 mln, down from $6.5 million the previous year. The licensed peer-to-peer lender recorded a near doubling of revenue, which consists almost entirely of fees, to $26.2 million from $14 mln. Expenses rose 34% to just over $28 mln. Accumulated losses reached $28.737 mln at March 31, with Harmoney having share capital of $32.8 mln. Having gone live in September 2014, Harmoney's website says it has matched borrowers and lenders for loans worth $750 mln. Meanwhile Squirrel Money, another P2P lender, narrowed its March year loss 13% to $492,379 with revenue up 84% to $393,733.
Source: interest.co.nz
Good volume over the last few weeks
Not sure I agree with some of the grading though. For example this one
Attachment 9833
eeek 30% of income on repayments !
renting - 50 odd - 30% income on debt and one default to boot - how can this be classified as a C1
Am coming up a year in a few weeks time. RAR 14.75%, running at 14.3% writing off any debt having arrears beyond 60 days - although am only projecting 10.5% based on HM annual default by grade estimates upon full term.
Best performing grade as at today is F = 23.3%, worst A = 8.7% followed by E at 11%. Expect that to change as loans mature.
My overall risk vs reward graph (plots total interest income, against principal written off or in arrears; by number of successful interest payments made), is looking okay - although E grade is showing the effects of some poor risk selections early on in my portfolio.
Attachment 9840
Attachment 9841
Been lending for 40 months now, I switched away from E an F grades from September 2015 due to heavy losses, the low point of my RAR graph, then began concentrating in the mid-range zones and it's served me well. Latest RAR 14.06% being 422 pips above the platform.
Attachment 9842
I know things here in NZ are very different to America, however I found the following article littered with potential warning signs of the future. Perhaps of some value to loan selection strategies:
https://www.nytimes.com/2018/08/05/b...americans.html
There are also some major concerns in Australia at the moment regarding out-of-control Credit Card debt. Where is all this heading?
Great going!
I still think there are worthwhile loans in grade E , just being very selective. Last year I had 25% grade E or F and some of those wouldn't touch with a bargepole today. Other then certain risk pockets, am relatively happy barring a complete financial meltdown,
One thing I know for sure, from November to Mid January I'll tighten up my lending criteria and stick with the B & C grade stuff. My only loans still in arrears (and looking like they are well on their way to write-down) are E grades issued in Early December.
Interesting summary of the various P2P platforms in NZ at present
www.interest.co.nz/personal-finance/95115/gareth-vaughan-conducts-stocktake-just-how-involved-retail-investors-are-nz
Thank for the link @Wsp.
Article timing makes me wonder if Gareth is a reader of this forum thread given the chatter from a few weeks back. If so, @Gareth, thanks for doing the legwork on this. If not; thanks anyway.
Thanks Wsp. Wholesale support for P2P is killing it? Unless they substantially reduce funding of Harmoney it will surely remain a tiny niche investment opportunity unless of course there is some other radical change like acquisition of finance companies. Maybe we are just too tight to meet market interest rates!