Harmoney

[whitt]

Does anybody who has used Harmoney long term know if they update the "expected default rate" at any point? Surely by now they will have some actual default rates they could use to update ones quoted in Marketplace

[rsmckee]

Just a fair update here - all my 'defaults' are now active and up to date - so I will say that it appears that harmony puts in effort to keep defaults to a minimum. Good point from Whitt as I would also like to know if the 'projected' default ratio is updated.

[Harvey Specter]

Does anybody who has used Harmoney long term know if they update the "expected default rate" at any point? Surely by now they will have some actual default rates they could use to update ones quoted in Marketplace

Its only been gong a year (not quite?) and the shortest loans are 3 years. From the US sites, they expect most of the defaults to be in the first year but until you have actual data, they cant just extrapolate the same rate of default or assume a drop off. Having said that, it would be interesting to know how it is tracking to their models.

[humvee]

Does anybody who has used Harmoney long term know if they update the "expected default rate" at any point? Surely by now they will have some actual default rates they could use to update ones quoted in Marketplace

Has anyone got any defaults yet - i mean actual defaults not just long term arrears?
If so there are a few things i would be interested to know.

What grade were they?

How many months in did they default?

Did they make any repayments before they defaulted.

How far in arrears does a loan need to be before harmoney considers them a default?

[Puggy]

Has anyone got any defaults yet - i mean actual defaults not just long term arrears?

Not yet, but I've currently got two in arrears, one E3 which was Issued on 07-04-2015 and never had a single payment, and an E2 Issued on 02-04-2015 which had a couple of payments before going into Arrears. So my oldest is in arrears for at least 4 months worth of payments.

Biggest issue for me is that there's no communications about what action is being taken. Might be nice to have some sort of 'Debt Recovery' type status that says 'Contacting Debtor' or 'Payment Plan Arranged' or something...

[axe]

21 Loans so far so only a small sample. No defaults. A couple of loans in and out of arrears.
People seem more likely to pay their loans off as there are no penalties for doing so ( I think this is a great thing) than default.

[Corleone]

I have read this with great interest (excuse pun). Seems the soon to be released squirrel P2P model will iron out some of the negatives mentioned in this thread. I'll be following both closely. An added incentive for these is I am a registered non resident so tax on the interest would be much less.

was interested reading Roger's earlier post regarding 12 month bankruptcies for under 40K... I wonder how many student loan borrowers will see this is a more viable alternative than years of debt.

[Harvey Specter]

I have read this with great interest (excuse pun). Seems the soon to be released squirrel P2P model will iron out some of the negatives mentioned in this thread.

They're interest rates are going to be much lower. They are suggesting in the 7-9% range from memory. And while the insurance sounds good, you are paying for it by reduced interest income and if the fund drops to zero, they can withhold some of your interest to build it back up again so it is just socialising losses (which isn't necessarily a bad thing).

[unhuman]

^Yes agreed. The ability to onsell loans to third parts (something Harmoney I believe hinted at but haven't announced anything further towards) and secured loans is what I am interested in.

[axe]

So correct me if I'm wrong, but if you wanted to borrow a small amount, say $1000 - I agree to a three year loan but I can pay it off at any time without penalty? So basically its payday lending disguised as a long term loan in order to avoid the payday regulatory problems?

https://www.harmoney.com/how-it-works/borrower-faq (exert below)
CAN I MAKE REPAYMENTS EARLY?


Yes, you can make early repayments, or even pay off the entirety of your loan early without charge. Interest is accrued on your loan daily, based on the outstanding balance; therefore paying your loan in advance means you will incur less interest.