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Post by Ace on Sept 28, 2022 16:05:53 GMT
Is hardly fair to compare a 1 year fix with a 60 notice account. The 1 year fix also locks you in so that you can't benefit from further rises, unlike Loanpad. maybe, but it isn't really a 60 day notice account - and I know I am preaching to the converted, but... the risk is very real that a) you cant get your money after 60 days and b) your capital isn't 100% safe, hence the premium, and I just don't think the current premium is enough to price in that risk at 4.8%. Each to their own. I agree with your points, and totally respect that some may decide that the Premium offered by Loanpad over an FSCS protected account is not sufficient for the risk, I just thought it was a bit unfair to compare with 1 year rates. With a quick search, the closest and best I could find was 2.5% with FSCS protection for a 6 months notice account. I personally would prefer Loanpad's unprotected 4.8% with 60 days notice (30 days if using the rolling withdrawal technique), but completely accept that it won't suit all.
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Post by df on Sept 28, 2022 18:12:42 GMT
Loanpad announce further rate rises: As from 01 November 2022 Classic / ISA Classic 3.40% Premium / ISA Premium 4.60% As from 01 December 2022 Classic / ISA Classic 3.60% Premium / ISA Premium 4.80% That's more like it. We'll done Loanpad. Yep, the increase schedule sounds reasonable. I'will be cancelling my scheduled withdrawals for the time being.
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Post by df on Sept 28, 2022 19:14:02 GMT
maybe, but it isn't really a 60 day notice account - and I know I am preaching to the converted, but... the risk is very real that a) you cant get your money after 60 days and b) your capital isn't 100% safe, hence the premium, and I just don't think the current premium is enough to price in that risk at 4.8%. Each to their own. I agree with your points, and totally respect that some may decide that the Premium offered by Loanpad over an FSCS protected account is not sufficient for the risk, I just thought it was a bit unfair to compare with 1 year rates. With a quick search, the closest and best I could find was 2.5% with FSCS protection for a 6 months notice account. I personally would prefer Loanpad's unprotected 4.8% with 60 days notice (30 days if using the rolling withdrawal technique), but completely accept that it won't suit all. The closest 60 days I found is Zopa at 2.05%, so today LP's 4.3% is ok for what it is. 4.8% comes in December. In Dec 6 months notice 2.5% with FSCS protection is likely to look like a joke as well as LP's 4.8%. Going for 1 year fixed or even 6 month won't be a wise move until it is obvious that BoE rates are not going to go up in near future.
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firedog
Member of DD Central
Posts: 368
Likes: 465
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Post by firedog on Nov 18, 2022 11:24:06 GMT
That's Loanpad's rates edging up again – to 5% on 60-day notice account (3.8% on 'Classic') by Feb 1 2023.
In more detail:
Current
Classic / ISA Classic 3.4%
Premium / ISA Premium 4.6%
1 December
Classic / ISA Classic 3.6%
Premium / ISA Premium 4.8%
1 January 2023
Classic / ISA Classic 3.7%
Premium / ISA Premium 4.9%
1 February
Classic / ISA Classic 3.8%
Premium / ISA Premium 5%
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Post by df on Nov 18, 2022 17:35:22 GMT
That's Loanpad's rates edging up again – to 5% on 60-day notice account (3.8% on 'Classic') by Feb 1 2023. In more detail: CurrentClassic / ISA Classic 3.4% Premium / ISA Premium 4.6% 1 DecemberClassic / ISA Classic 3.6% Premium / ISA Premium 4.8% 1 January 2023Classic / ISA Classic 3.7% Premium / ISA Premium 4.9% 1 FebruaryClassic / ISA Classic 3.8% Premium / ISA Premium 5% Considering the low risk the 60-day rates look reasonable to me and I like that they announce the increases in advance. I think I will be increasing my investment next week if banks don't come up with any new offers on IA.
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Post by Badly Drawn Stickman on Nov 19, 2022 12:46:54 GMT
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Post by Ace on Jan 24, 2023 11:35:04 GMT
Loanpad have announced another rate rise from 9th Feb. This time its only the Classic accounts that will have a further increase. 9 February Classic / ISA Classic 4% Premium / ISA Premium 5%
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Post by davefoz on Jan 25, 2023 7:00:44 GMT
Loanpad have announced another rate rise from 9th Feb. This time its only the Classic accounts that will have a further increase. 9 February Classic / ISA Classic 4% Premium / ISA Premium 5% Vs Kroo FCS protected at 3.03%
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Post by biscuitbri on Jan 27, 2023 15:14:48 GMT
At the risk of exposing my financial expertise, or lack of, do the new rates only reflect the increased risk due to the increased cost to the borrowers and their tenants etc ?
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Post by Badly Drawn Stickman on Jan 27, 2023 15:49:18 GMT
At the risk of exposing my financial expertise, or lack of, do the new rates only reflect the increased risk due to the increased cost to the borrowers and their tenants etc ? I think it simply reflects the minimum they thin k necessary to keep funds on the platform.
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Post by Ace on Jan 27, 2023 16:00:01 GMT
At the risk of exposing my financial expertise, or lack of, do the new rates only reflect the increased risk due to the increased cost to the borrowers and their tenants etc ? There must be "some" increase in risk to lenders as the burden on the borrowers increases. However, with at least a 50% LTV margin on every loan, there is plenty of scope for Loanpad to be able to react once a borrower stops paying before the risk of a capital loss arises. So I don't see a material increase in the risk for lenders. The rise in rates to lenders is simply an attempt to keep the products competitive. It's clear that the rapid platform growth has stalled since the margin between FSCS protected accounts and Loanpad has narrowed. Whether the Loanpad risk is higher that the difference between 4% and instant access FSCS accounts, or 5% and 60 day notice FSCS accounts, is the decision that lenders have to make. Personally, I expect that Loanpad rates will have to creep higher to enable them to return to their previous growth rates. Loanpad have been increasing rates to borrowers for some time now, so they have scope to go higher to lenders. I also expect that FSCS rates are likely to head down again soon (though may creep a bit higher before that). So, the differential should then increase again. I'm taking the longer view rather than go to the bother of constantly switching the funds around. And we haven't yet got to the point were comparable FSCS accounts are high enough to tempt me away.
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Post by df on Jan 27, 2023 18:14:25 GMT
Loanpad have announced another rate rise from 9th Feb. This time its only the Classic accounts that will have a further increase. 9 February Classic / ISA Classic 4% Premium / ISA Premium 5% Vs Kroo FCS protected at 3.03% It is predicted that BoE will raise the rate to 4% on 2nd Feb. If that's what is going to happen we are very likely to see a few IA offers above 3% from FSCS protected market in near future. No need to mention that some with small allowances or negligible withdrawal restrictions are already offering rates above 3%. Unprotected investment at 4% is hardly encouraging.
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Post by df on Jan 27, 2023 19:01:34 GMT
At the risk of exposing my financial expertise, or lack of, do the new rates only reflect the increased risk due to the increased cost to the borrowers and their tenants etc ? There must be "some" increase in risk to lenders as the burden on the borrowers increases. However, with at least a 50% LTV margin on every loan, there is plenty of scope for Loanpad to be able to react once a borrower stops paying before the risk of a capital loss arises. So I don't see a material increase in the risk for lenders. The rise in rates to lenders is simply an attempt to keep the products competitive. It's clear that the rapid platform growth has stalled since the margin between FSCS protected accounts and Loanpad has narrowed. Whether the Loanpad risk is higher that the difference between 4% and instant access FSCS accounts, or 5% and 60 day notice FSCS accounts, is the decision that lenders have to make. Personally, I expect that Loanpad rates will have to creep higher to enable them to return to their previous growth rates. Loanpad have been increasing rates to borrowers for some time now, so they have scope to go higher to lenders. I also expect that FSCS rates are likely to head down again soon (though may creep a bit higher before that). So, the differential should then increase again. I'm taking the longer view rather than go to the bother of constantly switching the funds around. And we haven't yet got to the point were comparable FSCS accounts are high enough to tempt me away. It's too much work to calculate the exact figure, I'm moving my funds frequently, but at a glance my current position with banks/BSs is somewhere between 3.5% and 4%. I have some funds in Premium, but it soon might get to the point when I'll stop cancelling my scheduled withdrawals.
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Post by Ace on Jan 27, 2023 19:09:37 GMT
There must be "some" increase in risk to lenders as the burden on the borrowers increases. However, with at least a 50% LTV margin on every loan, there is plenty of scope for Loanpad to be able to react once a borrower stops paying before the risk of a capital loss arises. So I don't see a material increase in the risk for lenders. The rise in rates to lenders is simply an attempt to keep the products competitive. It's clear that the rapid platform growth has stalled since the margin between FSCS protected accounts and Loanpad has narrowed. Whether the Loanpad risk is higher that the difference between 4% and instant access FSCS accounts, or 5% and 60 day notice FSCS accounts, is the decision that lenders have to make. Personally, I expect that Loanpad rates will have to creep higher to enable them to return to their previous growth rates. Loanpad have been increasing rates to borrowers for some time now, so they have scope to go higher to lenders. I also expect that FSCS rates are likely to head down again soon (though may creep a bit higher before that). So, the differential should then increase again. I'm taking the longer view rather than go to the bother of constantly switching the funds around. And we haven't yet got to the point were comparable FSCS accounts are high enough to tempt me away. It's too much work to calculate the exact figure, I'm moving my funds frequently, but at a glance my current position with banks/BSs is somewhere between 3.5% and 4%. I have some funds in Premium, but it soon might get to the point when I'll stop cancelling my scheduled withdrawals. Yep, it's getting close for me too, but I'm lazier than you. It takes a lot of effort to achieve that 3.5 to 4%, compared with almost no effort on Loanpad. Also, don't forget that the Loanpad accounts are up to 4.08% and 5.13% annual equivalents when interest is reinvested.
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a0010402
Member of DD Central
Posts: 111
Likes: 64
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Post by a0010402 on Jan 27, 2023 20:50:06 GMT
Inertia.
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