Squirrel Money P2P

[Colgar]

I'm starting to like the idea of Squirrel over Harmoney.

I've had some big returns from Harmoney (over 10% after tax), but I've got a number of issues with it... The interface is a bit rubbish - I have no idea whats going on with my investments.

Bit late to the discussion but I tried joining and couldn't get the verification process to work. Tried about 4 different times with the license and webcam but no dice.

Haven't tried again since.

[Lewylewylewy]

Bit late to the discussion but I tried joining and couldn't get the verification process to work. Tried about 4 different times with the license and webcam but no dice.

Haven't tried again since.

Use a different browser - that's what I had to do

[JB@Squirrel]

Cool, do you have a subscription to email me when changes are implemented?

also, how's the secondary market work in Squirrel? I imagine that if you are investing in loans and there's a loan that's been reliably paid off for months, that would be more attractive... But if you have repayment protection, it wouldn't matter so much. Is the advantage for investors that the loan periods are shorter on the secondary market or have I misunderstood what that's about?

WE've already built the Secondary Market. Its just a matter of getting it licensed next year. The purpose of the Secondary Market is to allow investors to invest in longer-term loans (5 YEARS) knowing there is ability to liquidate their investments if they need to.

Essentially an investor can click "Sell my Loan" and we then automatically put the loan back into the market clearing mechanism to be resold. Providing the loan can be matched (rate, amount, term) then it will be cleared out and funds returned to the investor. We intend to go a step further and put some of our capital into a liquidity mechanism that can be used to immediately payout investors in certain emergency circumstances.

Its all designed to help give Investors more flexibility and to address the natural term mis-match that will occur in our business.

[Mickey]

Even with the explanation in an earlier post from the Ops Manager - I'm still finding the 2% fee rather ambiguous. I've just checked the Terms and Conditions on the site and it states the following:

"Service Fee means the fee payable by the Investor and deducted from interest payments made by the Borrower under the Loan Agreement equal to 2% of the outstanding Loan balance per annum as amended from time to time;"

This clearly states that the Investor is responsible for paying a fee. If this is not the case (as per above) - then the T's and C's need to be amended as I'm not prepared to sign up to Squirrel while it is worded this way.

I see that JB is a visitor to this site and so perhaps an authoritative statement from Squirrel could be provided here regarding this.

[JB@Squirrel]

Hi Mickey

I know this is a bit of a pain on the wording and something we've debated and continue to debate with our lawyers.

As for Authoritative statement here goes ...

The Borrower interest rate is determined by taking the investor rate plus a risk premium (specific to the riskiness of the loan that is paid into the reserve fund) and our platform margin of 2.00% per annum.

The 2.00% margin along with a risk levy are deducted from the gross borrower repayment each month and the balance paid to the investor. Both are a % of the loan outstanding and deducted prior to paying the investor.

The rate an investor signs up for when they invest is the interest rate they receive. There are no deductions from this. Currently this is sitting between 8.00% and 9.00%.

We have a number of improvements we're putting around this over the next month to simplify our bidding processes and I'll look to further tidy this disclosure up at the same time.

Hope this clarifies.

Cheers, JB

[Mickey]

Hi Mickey

I know this is a bit of a pain on the wording and something we've debated and continue to debate with our lawyers.

As for Authoritative statement here goes ...

The Borrower interest rate is determined by taking the investor rate plus a risk premium (specific to the riskiness of the loan that is paid into the reserve fund) and our platform margin of 2.00% per annum.

The 2.00% margin along with a risk levy are deducted from the gross borrower repayment each month and the balance paid to the investor. Both are a % of the loan outstanding and deducted prior to paying the investor.

The rate an investor signs up for when they invest is the interest rate they receive. There are no deductions from this. Currently this is sitting between 8.00% and 9.00%.

We have a number of improvements we're putting around this over the next month to simplify our bidding processes and I'll look to further tidy this disclosure up at the same time.

Hope this clarifies.

Cheers, JB

Thanks JB - appreciate you taking the time to respond

[humvee]

This Was Just sent out in the Squirrel News letter today

https://www.squirrelmoney.co.nz/market-place/



This here is old - but I had not found it before today


https://www.squirrelmoney.co.nz/cred...eport-month-1/

its interesting to see that only 10.5% of their loans are secured

[JB@Squirrel]

Hi Humvee,

The secured loans are now up to 17% of the book. 90% of the book are A or B grade. Also 44% of the borrowers own their own home even if we haven't taken security. (We only take security if the loan is over $30k.) And there are currently no arrears on the book (as at today) which although a young book is good after Christmas. We'll post another Credit update to the web site shortly.

[JB@Squirrel]

Feedback Please

We've got a few changes we are wanting to put through in March that I want to check with you guys.

1. We're going to pay interest on the Call account. Funds are sitting inside a Trust so will only attract bank type interest rates. We're thinking 3% on balances up to $100,000. That way you get bank type interest even when your funds aren't invested.

2. The ability to set up a regular/automatic withdrawal. It will only be a simple one - for example you can set up to withdrawal $600 per month. It will go through provided there is sufficient funds in your Call Account. That way investors can set up their investments to provide regular income.

3. More information on what is in the pipeline. We're conscious there's not enough visibility of the loans coming through and what's going to be available as well as what other bids are sitting in the system. We're going to provide a lot more information so investors can better target loans coming through and get a better sense of how quickly they can invest.

4. Limited secondary market. You'll be able to sell a loan back to the platform at face-value provided we can match it with an investor happy with the remaining term and rate. This is already built but we are waiting on the FMA to approve. Would this be a big deal if we get it over the line?

Next Up

What other features would be useful / valuable for you?

[humvee]

Feedback Please

We've got a few changes we are wanting to put through in March that I want to check with you guys.

1. We're going to pay interest on the Call account. Funds are sitting inside a Trust so will only attract bank type interest rates. We're thinking 3% on balances up to $100,000. That way you get bank type interest even when your funds aren't invested.

2. The ability to set up a regular/automatic withdrawal. It will only be a simple one - for example you can set up to withdrawal $600 per month. It will go through provided there is sufficient funds in your Call Account. That way investors can set up their investments to provide regular income.

3. More information on what is in the pipeline. We're conscious there's not enough visibility of the loans coming through and what's going to be available as well as what other bids are sitting in the system. We're going to provide a lot more information so investors can better target loans coming through and get a better sense of how quickly they can invest.

4. Limited secondary market. You'll be able to sell a loan back to the platform at face-value provided we can match it with an investor happy with the remaining term and rate. This is already built but we are waiting on the FMA to approve. Would this be a big deal if we get it over the line?

Next Up

What other features would be useful / valuable for you?

1) Can you confirm if you do this that money that is tied up in orders waiting to be filled will also earn interest? if so this will help.

Although I would still like you to consider implementing my earlier suggestion to you(via email). The issue is orders partially for 2 and 3 years can take along time to be filled while waiting for this to happen the money is sitting idle what makes it worse if you investing across all loan terms you need to have orders in place for all 3 terms and 3X as much money idle.

What I would like to do is if say I have $1000 in my call account I would like to be able to place 3 orders for $1000 - once the 1st order is filled(or allocated/pending) the other 2 orders go on hold and I get an email so I could potentially deposit more money activating the orders again

Eg if I have $1000 in my call account I might place orders for the following

$1000@8% for 2 years
and
$1000@8.5% for 3 years
and
$1000@9% for 5 years

I realize there is a risk I could miss out on a loan if 2 loans meeting my requirement become available at once causing one of my orders to go on hold but that is a risk i will take - The current problem is returns is being dragged down by idle money tied up in orders - at times Ive had twice as much money tied up in orders as I actually had in investments - right now its still at around 50%. even at 50% this turns a 9% return into a 6% return so is quite a drag on the return

2) this is a good idea - but not something i will use in the foreseeable future

3) Yes - Squirrel Money does offer the least information about the loans of all 4 P2P platforms in NZ

4) I might use this feature and it would be good to know its an option. I might more likely be buyer rather then seller


For me by far the the biggest improvement would be what I have suggested for #1