Other recent contributors got me looking a little deeper into how the SM Reserve fund works....
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Other recent contributors got me looking a little deeper into how the SM Reserve fund works....
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I didn't get a chance to come back and post how I got on with selling the loans (been to busy) In the end it took 9 day to liquidate ~$12,000.
5 year loans under $500 went fast
There were some delays on 2 & 3 year loans
There were more delays on the loans with balances between $501-$999
So while the process worked OK for me - not great - but OK I think the market (and ability to sell) would break should interest rates rise from when the loans were written, I also think anyone lending below the max interest rate is going to have trouble if they need to sell
I sold a couple of loans the other week as a test and they were snapped up the same day (at the same as the top market interest rate). However, I do agree that this service will not work very well if (when) interest rates rise. I would hope that Squirrel are aware of this and are working on the ability for the loans to be sold at a price other than face value, in a similar fashion to the bond market.
Anyone else notice it looks like Squirrel have just taken some serious 'End of Year' Write Off's.
The Reserve Fund has fallen from approx 220K to 200K and the Fund Coverage is now just 3.55% ( it was around 4% )
Squirrel have also now chosen to stop showing the amount of $$ Loans Write Off's on the website.
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Technically the fund could vary in % depending on the economic cycle. 1.9% might be fine at this point but what about during a recession where returns half and defaults double.
http://www.lendingmemo.com/p2p-lendi...n-performance/
Anyone using the Squirrel app? How do you find it?
Search on the App Store/Google Play Store.
It had a few bugs when I first use it, I'm currently just sticking to the mobile website as it's sufficient for me.