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  1. #1171
    Senior Member
    Join Date
    Sep 2015
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    Norf Eyelynd
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    783

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    With Inflation running at 6+% ( cough cough ) and most LC loans offering about 10% minus 25% flex, these days..... After Tax the true return is now almost zero.

    As funds now get repaid - I too am withdrawing every cent and investing elsewhere.

    Do not get me wrong, I really really like LC and they have served me very very well for 6 years, but perhaps now with changing external financial variables, for me their time with re-investing is finished for now.

  2. #1172
    Member
    Join Date
    Sep 2019
    Posts
    53

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    It's a valid viewpoint. Everyone will have their own strategies, and different "tipping points".

    For me, inflation is one factor when considering return on investment, but just as important is "where else would I put my money". Inflation might be 6% (those of us who pay rates, buy building materials, employ tradespeople and shop at supermarkets will know it has been at least that for a while!), but it doesn't mean that bank term deposits have caught up: TD rates are still very very low.
    Managed funds returns have been good, but only partly impacted by inflation - I wouldn't say their returns have dramatically increased in the past 2 years. So while I do have money in managed funds as part of my diverse portfolio (same with NZ property), I feel that P2P still has a part to play in that portfolio.

    I think a good loan of around 11-12% with 10% going to LC is still a very productive investment. Anything below 10% at 25% fee, or below 8% at 10% fee, is not worthwhile for me, I do agree on that.

    I treat P2P like those managed funds actually: where in funds, you split between conservative, medium and risky, I do the same with loans. Each has a return in line with the risk. I have to say the risks with LC are a lot lower than what they were with Harmoney.

  3. #1173
    Junior Member
    Join Date
    Dec 2021
    Location
    Picton (currently)
    Posts
    5

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    I'm generally very happy with LC.

    The unsecured loans are however a concern to me as my areas rate in unsecured loans stands at 9-10% with 90% Cx loans and 4 Cx loans written off already. I'm not taking them since 2-3 month anymore until I'm down to 1% of my total invest from currently 5.1%. Then I'll maybe get into a few handpicked ones of B3s max and with 10% flex only.
    Another concern is the upper limit of $20,000 for them. I find that limit ways too high, I would probably accept an upper limit of $5,000-$10,000

  4. #1174
    Senior Member
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    Sep 2015
    Location
    Norf Eyelynd
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    783

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    New RAR's out today @ LC.

    Both the wife's and mine have lowered and morphed into the same rate now @ 11.81%

    This was expected to happen, 6 months back now.

  5. #1175
    Junior Member
    Join Date
    Jan 2017
    Posts
    19

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    Agree totally. LC has been great, and it's recovery rates are best in class (globally - I invest P2P in several places around the world). It has always stunk that they shut off the auto invest program that was available for a while but otherwise top notch. But as Samee pointed out - the returns are basically zero after tax, inflation and risk!.
    The question is where is elsewhere? This far out the risk curve is a young persons game!
    Savers of the world we are being wrung out then hung out to dry!

    Quote Originally Posted by Saamee View Post
    With Inflation running at 6+% ( cough cough ) and most LC loans offering about 10% minus 25% flex, these days..... After Tax the true return is now almost zero.

    As funds now get repaid - I too am withdrawing every cent and investing elsewhere.

    Do not get me wrong, I really really like LC and they have served me very very well for 6 years, but perhaps now with changing external financial variables, for me their time with re-investing is finished for now.

  6. #1176
    Senior Member
    Join Date
    Sep 2015
    Location
    Norf Eyelynd
    Posts
    783

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    I recently have become concerned many current \ future Borrowers will get approved \ take out a loan with NO intention of repaying anything..... Ever.

    As interest rates rise, Mandates force people out of employment, Businesses struggle with cash flow - I fear loans being taken out by individuals ( with or without security ) with a cavalier attitude to the future.

    I hope I am wrong..... very very wrong...... but!

  7. #1177
    Junior Member
    Join Date
    Jun 2021
    Location
    thames
    Posts
    14

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    Quote Originally Posted by Saamee View Post
    I recently have become concerned many current \ future Borrowers will get approved \ take out a loan with NO intention of repaying anything..... Ever.

    As interest rates rise, Mandates force people out of employment, Businesses struggle with cash flow - I fear loans being taken out by individuals ( with or without security ) with a cavalier attitude to the future.

    I hope I am wrong..... very very wrong...... but!
    I think you're being a bit pessimistic. I have 99 active loans on LC. None written off, 1 in collection. 71 closed paid off. They do checks before approving a loan I'm sure. In fact they would be required to do so by law. Will that stop every maverick? No. But I'm confident history has shown that they are very good at filtering out those cavaliers. Stick to smaller investments over a large number of loans and you can't really go wrong.

  8. #1178
    Senior Member
    Join Date
    Aug 2021
    Location
    Auckland
    Posts
    702

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    Just curious for anyone out there that still has p2p loans outstanding. Can anyone talk to the interest income as a % of your loan you have been getting and how that has changed over the last 2 years? IE has it come down over the last two years, bottom out and starting to rise again? Or was it fixed at the time it was leant out and remained stable?

  9. #1179
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    Sep 2015
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    Norf Eyelynd
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    783

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    Quote Originally Posted by Fiordland Moose View Post
    Just curious for anyone out there that still has p2p loans outstanding. Can anyone talk to the interest income as a % of your loan you have been getting and how that has changed over the last 2 years? IE has it come down over the last two years, bottom out and starting to rise again? Or was it fixed at the time it was leant out and remained stable?
    Every loan you invest in at LC the Initial Interest rate is the set and locked in rate for the whole duration of that loan ( be it 3 years or 5 years )

    In the last 3 years the rates offered to borrower and thus lender have been coming down as competitor rates have also come down.

    At some point I would expect LC's loan interest rates to start to rise again in the current environment - not sure when though!

  10. #1180
    Member
    Join Date
    Sep 2019
    Posts
    53

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    Quote Originally Posted by Fiordland Moose View Post
    Just curious for anyone out there that still has p2p loans outstanding. Can anyone talk to the interest income as a % of your loan you have been getting and how that has changed over the last 2 years? IE has it come down over the last two years, bottom out and starting to rise again? Or was it fixed at the time it was leant out and remained stable?
    Just to confirm and add to what Saamee said, LC used to offer 4 categories of loans (A1, A2, B1, B2) right up to Nov 2020. When I joined in Sept-2019, it went from the lowest A1 at 6.89% to the highest B2 at 18.20%. They later revised these rates downwards from 6.49% to 16.99%.
    In Nov 2020, they changed to the current model A1-S to C3-U with rates going from 5.03% to 20.26%.

    I have a feeling there were more loans in the 14-15% region in the old rating system (A1 to B2) than there are now. It certainly is quite rare now to come across a loan over 16%. If anything, my average % has gone down over the past 2 years. But this might be personal: I might have favoured higher risk loans in my early years.

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