Harmoney

[Finite]

I think the whole RAR thing is very misleading!

Unless you are a professional investor who can claim write offs as a deductible expense then you are paying tax on a much higher value than your "profit"
In this situation ones return is lower than the calculated RAR.

The IRD needs to get a kick up the ass and hurry up changing the way it views such an investment where there are expected losses of capital and then Harmoney could allow for it in their tax withholding.

[BJ1]

I agree that it is very tricky for the casual lender and it would be good if IRD changed things so that all P2P investors (actually lenders) can claim deductions for loan write offs and not just those for whom the financial arrangement rules apply. After all this is lending as a business for more than just the Heartland type participants.

[Art]

In my view RAR is quite a conservative calculation of return because it does not include any accrued interest. I prefer to calculate my return at the end of each month by dividing the gross interest less fees and write-offs (if any) divided by the balance of investments at the end of the prior month. That way any further capital introduced during the month does not dilute the returns. Still not perfect though because of the delay between Harmoney receiving payments and clearance/posting to our accounts.

As far as the deductibility of charged off amounts is concerned, I believe that on balance my Harmoney investing constitutes a business and therefore I will be claiming charged off amounts (which to date have fortunately been minimal anyway). This was a good article, perhaps previously linked to here http://www.interest.co.nz/opinion/80...rk-p2p-lending

[whitt]

Are payment protect loans worth the hassle? Does anybody lend on loans with this payment protect (shield) or have some actual data?

Harmoney faq suggests the investor returns will be approximately 1% higher if you lend to these loans.

[Art]

Yes I have, I will let you know whether it was worth it in 5 years time! So far I have 139 of these loans, fees received (capitalised) $204.08, rebates (lender) $4.27, no amounts of principal waived (yet!), makes net $199.81. Also am receiving interest on the $199.81 but I have not tried to calculate how much that would be.

I intend to limit payment protect to 10% of my portfolio until I have seen a decent length of history to judge the performance.

[whitt]

Auto lend option for payment protect only has on or off button.
I currently have it turned off as am unsure if I turn it on if only that loan type shows. I would prefer to not filter and choose all loans as payment protect

[Art]

Auto lend option for payment protect only has on or off button.
I currently have it turned off as am unsure if I turn it on if only that loan type shows. I would prefer to not filter and choose all loans as payment protect

When you select yes some will be with payment protect and some will be without. I agree, there should be three options, all with, all without, or with & without.

[whitt]

When you select yes some will be with payment protect and some will be without. I agree, there should be three options, all with, all without, or with & without.

I might turn the payment protect option on in my auto lend then monitor the results. I dont want all my loans this type so will need to carefully watch them to ensure i don't get too many.

Payment protect is unproven and could result in 3 scenarios for default rates which is why I want to limit quantity until more actual data comes:
Option 1- Responsible borrowers sign up for payment protect. As they are more responsible the defaults are lower
Option 2- Higher risk borrowers sign up for payment protect. They can wrongly get complacent thinking they are protected for payments. It only covers things like disability or redundancy not bad debt. Defaults increase
Option 3- It makes no difference on defaults. The good and bad borrowers average out and default is unchanged.

[Saamee]

Talked with Harmoney this arvo about IT issues getting Withdrawals made.

Seems like they already know about the issue.

Random peoples accounts at random times.

Both my Wife's and my accounts will not allow any Withdrawals of any amount today.

Requested a Manual Withdrawal on both accounts.

[Saamee]

Talked with Harmoney this arvo about IT issues getting Withdrawals made.

Seems like they already know about the issue.

Random peoples accounts at random times.

Update >>> Harmoney went thru to the IT Dept. and they fixed the Issues ( on both accounts )

Both my Wife's and my accounts will not allow any Withdrawals of any amount today.


Requested a Manual Withdrawal on both accounts.

Apparentley the Issues is not expected to be seen again once fixed by IT....