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Post by lendingcrowd on May 3, 2018 12:35:33 GMT
Not at all impressed by this move. The outbidding has only been a problem since the cashback offer, which ends shortly. I suspect LC are going to find themselves rather short of lender funds come May. There were few more cash back offers since. I've noticed - as soon as one offer ends, they introduce another one. I didn't look at all of them, but I expect the condition would be "keep this money on platform for a year". So it might never end , and the number of lenders will increase. I expected this move. LC wants to grow and the only way to compete with FC is to lower the rates. It is very obvious that LC putting a lot of effort into promoting automated 6% and and 5.6% accounts. The next move will probably be similar to FC - to end manual investments. We'll see, but for now I will accept new rates and carry on with LC as usual, except becoming more selective if the loan flow increases. df - thank you for your message. Our cashback offers do usually have a 12 month lock-in period before investors can withdraw the funds that earned the bonus. We have no immediate plans to remove the Self Select Account/ISA options for investors, as we recognise that a proportion of our investors want the choice of who to lend to.
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Post by lendingcrowd on May 3, 2018 12:39:13 GMT
Also - would the LC rep care to comment on what financial incentives are offered to the big hitters? By big hitters, I'm talking about those who make large bids at the lowest interest rates, then attempt to sell the loans straightaway on the secondary market. If I did that under my miniscule-hitter-terms-and-conditions, I'd be making a loss of 0.5% per loan invested in, partly mitigated by a few days' worth of interest, but still loss-making. If the playing field is not level, I'd at least prefer the degree of slope to be transparent. Do these big hitters also get preferentially pushed to the front of the selling queue on the secondary markets, I wonder? rzys - thank you for your message. There are no financial incentives offered to any investors on the website, except for the investor cashback offers that we run from time to time which are open to all investors except for employees, directors or representatives of Edinburgh Alternative Finance Ltd. We also run promotions aimed at new investors only. There is no prioritisation of any investor over any others on the secondary market – everyone is treated the same.
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Post by lendingcrowd on May 3, 2018 12:40:28 GMT
Unless things have changed significantly since my time with LC, this is going to make very little difference to the overall interest rate paid by borrowers. That has always been dictated by the rate placed by the BH investors, as the large proportions of loans they hold bias the average towards their figures. If LC want to reduce borrowing rates they will have to lower the starting rate of each band, not the top rate. Perhaps we will soon see a grand announcement that LC are reintroducing the 4% spread/band - by lowering that base! Of course, they have previously lowered the rate by allocating unrealistic banding in the first place! What it will do is compress the differential between retail investors and underwriters, thus obviating the opportunity for shopping around for better rates on the SM (LE), removing some "interest" challenge of the platform - maybe that's a sign of a maturing system, as it only works for minimal loan parts and they don't want to encourage small holdings? TheDriver - Although you are no longer a lender with us, we wish to make it clear to our investors that we have no plans to reduce the minimum interest rate for each risk band. We assign risk bands to loans based on extensive due diligence by our in-house Credit Team. We are happy to have investments of all sizes on the platform and our minimum Self Select investment remains at £20.
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Post by lendingcrowd on May 3, 2018 12:41:23 GMT
I assume it will depend on whether underwrites be willing to go for lower rates or not? Since the start of the year there seems to be a significant increase in late payments/in arrears issues. Appears to be the same trend for FC , looking at comments on their board. Q1 + April has seen a poor/slow period for the UK economy and maybe not surprising if SME's are having cash flow issues. Even if not all these loans eventually default ( and I hope not !) it must be getting the underwriters a bit anxious about there long term returns. In normal circumstances a higher perceived future risk should mean lenders , including the big ones actually looking for higher rates . In theory anyway . albermarle - thank you for your message. There have been borrowers that have had payment issues in the first 4 months of the year, but we are pleased that a large proportion of these are now back on track with their payments, and we have received acceptable proposals in other cases. As with all crowdlending platforms (and investments generally), diversification remains the key to ensuring that any defaults/bad debts have a minimal impact on your portfolio return.
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Post by df on May 3, 2018 21:20:13 GMT
There were few more cash back offers since. I've noticed - as soon as one offer ends, they introduce another one. I didn't look at all of them, but I expect the condition would be "keep this money on platform for a year". So it might never end , and the number of lenders will increase. I expected this move. LC wants to grow and the only way to compete with FC is to lower the rates. It is very obvious that LC putting a lot of effort into promoting automated 6% and and 5.6% accounts. The next move will probably be similar to FC - to end manual investments. We'll see, but for now I will accept new rates and carry on with LC as usual, except becoming more selective if the loan flow increases. df - thank you for your message. Our cashback offers do usually have a 12 month lock-in period before investors can withdraw the funds that earned the bonus. We have no immediate plans to remove the Self Select Account/ISA options for investors, as we recognise that a proportion of our investors want the choice of who to lend to. Thank you for clarifying this. For me it means that I have no immediate plans to withdraw from LC. Reducing the higher margins makes sense - in the past few months I wasn't able to get anything near the top rate, recently one small loan went down to the bottom rate and I guess many bidders got nothing. So far I've had good experience with LC - 214 loans, only 2 defaults, 0.5% exposure and 9.7% actual return. My total assets keep increasing.
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Post by albermarle on May 7, 2018 18:36:00 GMT
Since the start of the year there seems to be a significant increase in late payments/in arrears issues. Appears to be the same trend for FC , looking at comments on their board. Q1 + April has seen a poor/slow period for the UK economy and maybe not surprising if SME's are having cash flow issues. Even if not all these loans eventually default ( and I hope not !) it must be getting the underwriters a bit anxious about there long term returns. In normal circumstances a higher perceived future risk should mean lenders , including the big ones actually looking for higher rates . In theory anyway . albermarle - thank you for your message. There have been borrowers that have had payment issues in the first 4 months of the year, but we are pleased that a large proportion of these are now back on track with their payments, and we have received acceptable proposals in other cases. As with all crowdlending platforms (and investments generally), diversification remains the key to ensuring that any defaults/bad debts have a minimal impact on your portfolio return. Some more Lender Updates today about missed payments , so I can not agree with your comments . Hopefully some will get back on track as the economy improves from a poor start to 2018 but the trend seems to be for an increasing number of borrower issues.
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Post by df on May 7, 2018 19:48:48 GMT
albermarle - thank you for your message. There have been borrowers that have had payment issues in the first 4 months of the year, but we are pleased that a large proportion of these are now back on track with their payments, and we have received acceptable proposals in other cases. As with all crowdlending platforms (and investments generally), diversification remains the key to ensuring that any defaults/bad debts have a minimal impact on your portfolio return. Some more Lender Updates today about missed payments , so I can not agree with your comments . Hopefully some will get back on track as the economy improves from a poor start to 2018 but the trend seems to be for an increasing number of borrower issues. This usually coincides with the growing loan book.
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Post by albermarle on May 24, 2018 20:31:39 GMT
The messages about late payers/ in arrears seems to be still increasing at a greater rate than can be accounted for by a recently increasing loan book .
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elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
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Post by elliotn on Jul 16, 2018 1:39:34 GMT
df - thank you for your message. Our cashback offers do usually have a 12 month lock-in period before investors can withdraw the funds that earned the bonus. We have no immediate plans to remove the Self Select Account/ISA options for investors, as we recognise that a proportion of our investors want the choice of who to lend to. Thank you for clarifying this. For me it means that I have no immediate plans to withdraw from LC. Reducing the higher margins makes sense - in the past few months I wasn't able to get anything near the top rate, recently one small loan went down to the bottom rate and I guess many bidders got nothing. So far I've had good experience with LC - 214 loans, only 2 defaults, 0.5% exposure and 9.7% actual return. My total assets keep increasing.
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