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09-01-2017, 03:58 PM
#1851
Member
Originally Posted by Saamee
Hey Guys, Thanks for the alternative way of thinking and looking at this....
I would still rather have Zero losses though!!
Xero is down about 50% for me... No thanks!
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11-01-2017, 09:11 AM
#1852
Member
The post Xmas defaults are now coming thru. My arrears have jumped by 20% almost instantly this week. Hopefully this is normal for time or of year and settled back down.
Also I note the autolend issue with the changed criteria from weeks ago still exists. The last autolend loan I had filled was still back in mid Dec so I have been doing them manually now since I refuse to change my autolend rules .
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12-01-2017, 02:02 PM
#1853
Member
Payment protect - not good for us investors if there are early repayments
Just a note to those who are not aware.
Harmoney takes its cut of the payment protect fees up front. Should the borrower repays the loan early, they are entitled to a refund of their fees. That refund (including Harmoney's portion) comes from us investors. So you probably are out of pocket with early repayments.
Time will tell if it still works out okay for us investors in the long run. It all depends on how many payments are waived and how much is the percentage of early repayments.
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12-01-2017, 03:46 PM
#1854
Junior Member
eeekk i dont think i will be doing any more PP loans then
I presume that PP loans can be increased by paying off and redrawing a larger amount?
If so is the PP fee renegotiated?
Last edited by Robuste; 12-01-2017 at 04:01 PM.
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12-01-2017, 08:00 PM
#1855
Member
Originally Posted by nztyke
As it was a rhetorical question you know the answer already; Harmoney as a much greater risk/reward ratio than the others. if you are going to lend money unsecured at usurious rates to people (D,E,F) who have to resort to this kind of funding there are going to be significant write offs. I agree with Art and CR111, it's the big picture you have to bear in mind: it's a numbers game.
For the record my write offs are
A 0 out of 266
B 0 out of 329
C 0 out of 245
D 2 out of 126
E 8 out of 87
F 2 out of 26
My annualised returns over a two year period are A 9.7%, B 12.2%, C 16.0% D 17.0%, E 13.7%, F 20.5%, Overall 12.2% This is quite a lot better than LC and I am not in Squirrel
Excellent post. risk v total return.
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13-01-2017, 08:04 PM
#1856
Member
Originally Posted by nztyke
For the record my write offs are
A 0 out of 266
B 0 out of 329
C 0 out of 245
D 2 out of 126
E 8 out of 87
F 2 out of 26
My annualised returns over a two year period are A 9.7%, B 12.2%, C 16.0% D 17.0%, E 13.7%, F 20.5%, Overall 12.2% This is quite a lot better than LC and I am not in Squirrel
Are you taking into account TAX?
You state E is 13.7% anualised return for you.
But you are in fact paying Income Tax on the 30 -38% interest you receive for E grade loans.
The IRD is screwing us retail investors!
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14-01-2017, 08:21 AM
#1857
Member
Originally Posted by Finite
Are you taking into account TAX?
You state E is 13.7% anualised return for you.
But you are in fact paying Income Tax on the 30 -38% interest you receive for E grade loans.
The IRD is screwing us retail investors!
The returns quoted are before tax. Tax is paid on all forms of interest income so its impact is neutral except of course the question of deductibility of service charges and write offs.
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14-01-2017, 12:23 PM
#1858
Member
Originally Posted by Cool Bear
Just a note to those who are not aware.
Harmoney takes its cut of the payment protect fees up front. Should the borrower repays the loan early, they are entitled to a refund of their fees. That refund (including Harmoney's portion) comes from us investors. So you probably are out of pocket with early repayments.
Time will tell if it still works out okay for us investors in the long run. It all depends on how many payments are waived and how much is the percentage of early repayments.
As I understand it; Payment protect is paid by the borrower and becomes additional to the lender's principal outstanding e.g. $25 note becomes say $26.23
From the dashboard, subtracting ones "Loan investments funded" from the "Borrower Principal amount", shows the Total P/P added.
If for example one had $100 p/p outstanding and all the loans went full term and repaid then there would be an additional $100 in ones cash balance.
Along the way early repayments will cause an adjustment to both lender and borrower rebates.
I currently have about $90 in P/P capital and to date with some early repayments, have $1.50 lender rebate and about -$8.50 borrower rebates with no principal waivers yet.
So my outstanding P/P balance is about $83. Now hypothetically if all the p/p the loans went full term with no waivers or early repayments, I would make $83 extra profit??!!
On my spreadsheet I also counter the p/p $ capital against my write-off $ value. So in time I would like to consider that the p/p value will cancel out the written off amount.
Last edited by permutation; 14-01-2017 at 12:25 PM.
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14-01-2017, 12:53 PM
#1859
Member
more about PP
Originally Posted by permutation
As I understand it; Payment protect is paid by the borrower and becomes additional to the lender's principal outstanding e.g. $25 note becomes say $26.23
From the dashboard, subtracting ones "Loan investments funded" from the "Borrower Principal amount", shows the Total P/P added.
If for example one had $100 p/p outstanding and all the loans went full term and repaid then there would be an additional $100 in ones cash balance.
Along the way early repayments will cause an adjustment to both lender and borrower rebates.
I currently have about $90 in P/P capital and to date with some early repayments, have $1.50 lender rebate and about -$8.50 borrower rebates with no principal waivers yet.
So my outstanding P/P balance is about $83. Now hypothetically if all the p/p the loans went full term with no waivers or early repayments, I would make $83 extra profit??!!
On my spreadsheet I also counter the p/p $ capital against my write-off $ value. So in time I would like to consider that the p/p value will cancel out the written off amount.
You made $1.50 from the loans that were repaid early. But you have to pay the borrower $8.50 meaning you are out of pocket by $7. That is the point I was making in my earlier post.. If those loans had gone to maturity, your $1.50 will be much more and the borrower's $8.50 will be $0. So, for early repayment we lose out.
There is a writeup somewhere in harmoney site but I cannot find it. Harmoney takes 15% and 20% up front for commission and fees. For early repayment, they do not refund the two. But for rewrites, they refund one and not the other. However, the borrower gets the unused portion of the PP back for both early repayments and rewrites. Meaning that the difference comes from us.
I am not saying that we will definitely lose out. It just depends on how much PP loans were repaid early or rewritten and of course how much waivers there are.
Btw, my figures are: I earned $9+ for lenders rebate for the early repayments/rewrites and I paid out $95+ to the borrowers for those loans. No waivers so far too. In the perfect world of no more early repayments/rewrites and no waivers for the remaining PP loans, I will eventually be about $1800 better off in 5 years. I do hope that it will be at least half of that. But we will only know in 5 years time.
Of course, we also get a little more in interest as the loan o/s is higher than what we loan out.
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14-01-2017, 01:01 PM
#1860
Member
Originally Posted by Cool Bear
You made $1.50 from the loans that were repaid early. But you have to pay the borrower $8.50 meaning you are out of pocket by $7. That is the point I was making in my earlier post.. If those loans had gone to maturity, your $1.50 will be much more and the borrower's $8.50 will be $0. So, for early repayment we lose out.
I don't think I'm out of pocket, the -$8.50 comes from the total outstanding p/p's which are added onto the principal from the borrowers.
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