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Thread: Harmoney

  1. #4071
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    Quote Originally Posted by Saamee View Post
    So what do you think is the largest 'Threat' to our investments in P2P within NZ?
    The first document I linked to has some detail.

    I'll put my money on Interest Rates as the biggest 'Threat' to P2P investments.

  2. #4072
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    Quote Originally Posted by myles View Post
    The first document I linked to has some detail.

    I'll put my money on Interest Rates as the biggest 'Threat' to P2P investments.
    Government Loan shark legislation

    Other competitors – ie moola, gem etc. 'Threat' to P2P investments.


    Interesting read is the "Consumer-Credit-Behavioural-Economics-Case-Study-2012-Final.pdf" google it. As you read - tell me harmoney is not trying the same psychology tricks with their homepage landing page.
    Last edited by IntheRearWithTheGear; 18-01-2019 at 10:32 AM. Reason: too early in the morning.

  3. #4073
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    Quote Originally Posted by IntheRearWithTheGear View Post
    Interesting read is the "Consumer-Credit-Behavioural-Economics-Case-Study-2012-Final.pdf"
    Great read. Outlines the problems and some possible directions to take to correct (though all trials/considerations seem to fail!). Education at school level may be of value, but how do you compete with parents setting bad behavioural examples?

    It doesn't make any reference to where things are heading though

    Link to document here
    Last edited by myles; 18-01-2019 at 11:06 AM. Reason: Link

  4. #4074
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    Quote Originally Posted by myles View Post
    I'll put my money on Interest Rates as the biggest 'Threat' to P2P investments.
    Just to clarify this with two basic examples:


    • If interest rates rise, mortgagees come under stress resulting in stress on P2P repayments etc.
    • If interest rates fall, P2P loan churn will increase as rates will need to fall to match or number of borrowers will decline. [all three are bad for P2P investors]


    Interest Rates change will no doubt affect other aspects as well.

    The drivers for Interest Rate change are the real threats - what they are/will be - who knows

  5. #4075
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    I invest in B-E with 29% D rated and 18% E rated. Looking at the chart attached of loans issued/arrears and charge offs it would appear E rated loans have a better risk reward than D rated.
    Attached Images Attached Images

  6. #4076
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    Quote Originally Posted by Paddles View Post
    it would appear E rated loans have a better risk reward than D rated.
    ?

    Charge off rate for D: 11369743 / 154763275 * 100 = 7.35% (Interest rate ~ 25.55%)
    Charge off rate for E: 6586033 / 57642825 * 100 = 11.43% (Interest rate ~ 27.84%)

    This is my current return (but it will be different for everyone - minimum tax rate):

    returns.jpg

  7. #4077
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    Thanks Myles.

    I'm thinking that if I am selective with lending criteria for E rated loans I can mitigate the charge offs to some extent?
    i.e. Home owners, with min 3+ years current employer and payment to income >10%?

  8. #4078
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    Quote Originally Posted by Paddles View Post
    I'm thinking that if I am selective with lending criteria for E rated loans I can mitigate the charge offs to some extent?
    If you haven't seen it, grab the summary.pdf document from the linked post.

    A group of us put it together with shared data - it might help you make some selective loan choices.

  9. #4079
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    Quote Originally Posted by myles View Post
    If you haven't seen it, grab the summary.pdf document from the linked post.

    A group of us put it together with shared data - it might help you make some selective loan choices.
    That's awesome, thank you!

  10. #4080
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    Quote Originally Posted by Paddles View Post
    Thanks Myles.

    I'm thinking that if I am selective with lending criteria for E rated loans I can mitigate the charge offs to some extent?
    i.e. Home owners, with min 3+ years current employer and payment to income >10%?
    In my (admittedly anecdotal and not data-driven) experience, just avoiding E's for buying cars (and especially boats) will eliminate a disproportionately large number of charge-offs. For what it's worth I'm at 14% RAR and I've been in for almost three years now. I don't touch F's, however.
    Last edited by CageyB; 28-01-2019 at 04:47 PM.

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