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This is rather interesting as an investment. A P2P company is licensed in New Zealand and has four institutional banks providing $100m in backing. It has literally opened this week. I'm going to try it out and see how things work out.
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Sep 19, 2014 05:37
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| # ¿ May 1, 2024 23:44 |
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I'm on the New Zealand P2P lender Harmoney. I received my first payment on a note today. An A grade loan paying early. I've earned my first cent of gross interest.
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Oct 10, 2014 21:08
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It's taken 6 weeks from starting to roll in money to starting to see some return. I've only received a bit over $9 so it's not enough to buy another note yet. That will be the next milestone for the next 2-3 weeks. Of course I've had one note that was temporarily in arrears (for about 2 days), and another C grade note that has been in arrears for 4 days. I'm also likely to pass the 100 note milestone in the next week. I realised recently that each note provides cashflow. I can see cashflow increasing significantly as the compound interest effect allows buying more notes. Does that lead to significantly higher interest received over time?
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Nov 4, 2014 23:53
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April posted:I can vouch for this. I have deposited enough over the years to pay for 852 notes, but I currently have 1314 open notes. My monthly interest when I had about 841 open notes (closest record I have to 852) was $181.84, and now it is $254.99. All of this is quite interesting to me. When I starting thinking about the notes being similar to annuities in function (except for default of course) that I realised it's the number and monthly income from the notes that's a big deal. I ran a simulation of the performance of 36 and 60 month notes to see what the cashflow would be like and it is rather exceptional. It needs to be with the risk of default though. However I can see how banks and finance companies can turn consider profits, including looking at the performance of Visa and American Express. I only started putting some money in in September as the P2P loan company in New Zealand only started operating that week. The cash flow has started and I'm halfway to having enough money to buy an additional note. Saint Fu posted:
That's still good performance despite the number of defaults. Spending the time through the day to pick up the notes you're after is important. I'm finding it works for me so far as I spend a lot of time in the office so logging in isn't an issue. Something else that's noticeable from your graph is that as you increased your investment from $1000 to $3000 there's a distinct increase in the gradient of the total value. Devian666 fucked around with this message at 09:31 on Nov 6, 2014 |
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Nov 6, 2014 01:26
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I had one note paid off in full after it was issued. That was weird so I reinvested that. Today the inflow of cash went over $26 so I have put another $25 into funding which will fund my first additional note. The exponential take off in cash flow starts from now for me.
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Nov 17, 2014 20:20
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Just got enough cash flow to get a second note. The annualised return is sitting around 17% for the first 80 notes that I got. Despite some late payments no one has run off with the loan money so far.
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Dec 2, 2014 23:35
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I'm used to slow payers or bad debts with my business. I've had a few go into arrears and then catch up. The site I'm with in New Zealand changes late fees and passes them on. So being a bit late then catching up adds profit.
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Dec 4, 2014 20:40
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Definately recommend something other than p2p lending as people are paying me more than credit card rates for loans. 0% APR as suggested is much better and will give you a chance to knock back some of the debt before interest kicks in.
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Mar 14, 2015 03:22
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Six months in and I've added a bit of money to my account and stuck to loaning $25 for each loan. The calculation on the site says my gross interest is 17.26% pa allowing for default rate. This morning I crossed the threshold of paying my first $100 in tax (tax rate is about 28%). There's some decent income but I'll be more interested to see what happens as some defaults occur.
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Mar 19, 2015 21:19
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I had my first bad debt note in the last month. Someone managing to go broke less than 9 months after the peer to peer service was launched must have been a dire situation.
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Jun 24, 2015 03:58
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mrmcd posted:I've stopped even caring about individual defaults at this point. I basically just check in every now and then to make sure the rate is under 5%. Once you get several hundred notes being reinvested through AI, the impact of any one $25 slice isn't a problem. I've got around 380+ notes. One note become a bad debt isn't a big deal. The net monthly income is around $125/month. I've checked the individual slow payers and they're mostly just a payment behind although there's one that I think is just keeping up with the interest payments. Versus about 26 notes worth of loans where they repaid early.
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Jun 24, 2015 22:05
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lord1234 posted:God I wish I could get in on this in TX. I've tried to understand how to do the investing thing and it just doesn't make sense to me. Am I stupid for not spending more time trying to understand it? Specifically P2P lending or investing in general?
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Jun 25, 2015 22:12
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I will likely stop putting in more money if my country goes into a downturn (which is looking likely at the moment) as this is all unsecured personal debt. If a lot of people lose jobs then defaults will be driven up, as has happened with other P2P lending sites. The other limit is if it is not possible to reinvest money due to their being insufficient loans that meet my lending policy. When I refer to money invested I mean total principal so that would include reinvested interest. My total principal is $10,480 after 9 months and I've ramped up slowly over that time putting $10k in. That is after fees, tax and bad debts. I started out pretty slowly as well but I won't have a good picture of performance until I've been in as long as April. The risk reward balance you have to figure out for yourself and what you can tollerate. Some people don't think it's worthwhile, some do.
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Jul 29, 2015 00:39
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ohgodwhat posted:How likely do you think it is that Lending Club is even around in two decades or so? Pretty difficult to say. I think there's a reasonable chance that some p2p sites will cease to exist. Some might survive and some might become the next big thing. Although this is where don't invest your entire life savings in p2p lending is important. e: However the flip side of p2p lending may be how many of the traditional banks will continue to exist in their current form with the rise of p2p lending. http://www.lendingmemo.com/wells-fargo-peer-to-peer-lending/ Devian666 fucked around with this message at 03:19 on Jul 31, 2015 |
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Jul 30, 2015 02:13
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pathetic little tramp posted:So fun fact, I just decided to finally give this a shot as I have a really good salary these days, but I'm maybe moving to Kentucky soon. I did some reading about requirements and apparently to join Lending Club in Kentucky you must be an accredited investor. What this means, according to the commonwealth of Kentucky and the United States of America, is that I must have a net worth of over a million dollars (not including the value of my home). OR, I can just have a salary of > 200,000$ and have collected this salary for the past 2 years. It's as if the US hates capitalism.
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Aug 8, 2015 03:51
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April posted:Some quick napkin math shows that over the past 3 years, I am earning an average of about 2% of my total notes in bonus notes every month - meaning, since I have about 1800 notes right now, if I leave it alone, I will have about 1836 notes in a month. I'm lazy so I put $45k with no extra money being added into my compounding interest app. 20 years at 18% net interest hits $1.6m. When I first started looking at p2p lending this is something that I asked about. When I did a financial simulation of the returns I found a similar result. Two factors seem to be at play: the revenue from the loans being amortised (front loaded interest) and the return of loan principle which you can reinvest for more front loaded interest. You result stacks up in my excel spreadsheet but I've been meaning to do a more detailed internal rate of return calculation. I might get around to that in January when I have more free time. e: The thing is there are some other factors that break predictions. Obviously the $1.6m above is based on $25 face value of notes but the average value will be somewhere over half of the face value. In addition to that whenever you add money to p2p lending it will take 5 years before the rate of increase in notes will settle down. At New Zealand p2p interest rates money put into 3 year notes will turn into 3 times the number of notes, and additional money put into 5 year notes will turn into 4.5 times the number of notes in 5 years. Then after that the net number of notes will be the new notes - notes that are fully repaid. The thing is 4.5 times the number of 5 year notes will produce 4.5 times the cash flow (but that does have compounding interest reinvested). The interest received is only based on the actual principle invested, but $25 at 12% compounding for 5 years yields $45 (an 81% gain versus 4.5 times the cash flow). It's this aspect that I want to analyse more as it seems to be where banks benefit from amortisation. e2: What I suspect I will find is a higher effective interest rate but I need to look at the mechanics of it. Devian666 fucked around with this message at 23:05 on Sep 22, 2015 |
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Sep 22, 2015 20:52
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mrmcd posted:Yeah anything that returns 18% yoy for 20 years without periods of dramatic, terrifying losses is going to be bid up to returns much less than 18% eventually. The real rate for April's returns are likely to be less as that's just based on raw notes so the return will be more like 9-13%. There is the other issue of ending up with so much money that it's difficult to reinvest in LC which will force investors to withdraw money to put in other investments, or to take on more risky investments.
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Sep 22, 2015 23:34
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I spent some time on Friday building a spreadsheet to analyse notes in more detail. The p2p notes pay out the the listed interest on the principle. When you put new money into notes it does boost the new number of notes until the 3 or 5 year term of the notes has run it's course. So you do have higher cash flow for that period of time. That's about all I found out.
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Sep 27, 2015 05:43
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My returns took a few hits after write offs but otherwise the gross income is alright. After tax I'm netting about 9.6% and have changed strategy to move away from most of the D-F credit grades.
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Mar 7, 2016 23:11
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The chart is platform generated based on realised annual return. It's calculated on a daily basis using their internal db records. I barely keep monthly data so I couldn't generate something with this much detail.
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Mar 8, 2016 22:03
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My return after tax is a bit over 9%. That is a bit more consistent now that NZ's main P2P lender has been established for a few years now.
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May 11, 2017 23:42
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| # ¿ May 1, 2024 23:44 |
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Is the drop in returns tied to an increased default rate? Or are there significant arrears that have been building up?
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May 12, 2017 02:09
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