Originally Posted by
myles
I would suggest caution on accepting a reduced rate (via increased fees, reduced rates etc) within the Harmoney lending model (does not apply to others). The risks are higher with Harmoney. These are unsecured loans (that is why the default rates are high)! If there is an upward shift in interest rates or some other significant shift/shock to the economy the effect will be felt here more than elsewhere. That is why the rates are higher here - the risk is higher. If fees increase or rates reduce, alternative investment options would likely be a better choice.
As an example: The difference between wholesale and retail is currently a little over 3%, take that 3% away from the returned interest rate of A grade loans and then compare that to a fully secured term deposit
Be careful what you wish for...