LinkedFinance - new website

1huge1

Would it be fair to say that a loan at 12% will work out at c.a. 6% after linkedfinance has taken its cut and you have paid tax on it? I know it depends what tax band someone is in but would it be in and around this?

at9qu5vp0wcix7

The low interest rates would be acceptable if there was some form of collateral/guarantee, other than 'you have my word'. But without that, the interest rates do not reflect the risk IMO.

Katawalah

Mila Calm Ax wrote: »

From the comments earlier in the thread, it appears that it is loans which LF deemed too much of a risk. That may well mean a higher interest rate, but a higher default rate accordingly. This is all hypothetical of course, it may well be a better alternative. There are better options for people who are interested in returns on their investment, and not t-shirts.

Yes, I saw this comment in an earlier message. However, this just seems hearsay to me as there was no link to some article or statement. I assume that we can also assess by ourself the quality of the loan (based on balance sheet, Q/A, good shape of the company, etc.) and decide if it's worth taking the risk or not.

sceach16 wrote: »

I looked at it and decided No. Too few loans and too few lenders. While returns are going down with Linked, it is because there are more lenders attracted by the site.

If there are too few lenders on Grid, then it becomes an opportunity for the lenders to get a higher rate or return, as it was with the early stage of LF.

scheister wrote: »

Grid finance is very miss and sometimes hit. I have 2 loans on the page atm both took at least 2 attempts to get enough money. Also unlike linked finance or mintos very few loans. Might have a max 4 loans available at a time. Only positive points is a lower deposit limit and from what i can see no limit on withdrawals

Thank you for your input. I will give it a try anyway and see for myself. If more and more lenders are starting to be dissatisfied with LF, maybe it will allow Grid to have enough lenders and attract more borrowers as well.

Supply and demand and all that stuff.

Katawalah

Wheety wrote: »

I think the days of getting 15% are gone. But I got 13.2% last night, if the loan is accepted. The only appeal I see of those 1 year loans is that you will be getting bigger chunks of money back to reinvest than if it was over the 3 years.

€50 at 8.5% over 1 year returns €4.36. At the end of the year you have made €2.33 interest.

€50 at 13.2% over 3 years will return just €1.69 a week and will return €10.82 interest over 3 years.

So I suppose the higher monthly return is attractive for reinvesting.

Interesting point about the 1 year loan. I didn't think about it and it make them more attractive to me now. I also like the idea to tie my money for only 1 year instead of 3, as the interests paid in the last year are very low.

I think the only strategy to keep the interest rates high for us is to bid only once per loan and at the last minute.

I see that most lenders bid 15% at an early stage when there's still plenty of availability for the loan (for example 30% funded). (This worked well when there were plenty of 40K loans and less lenders. But it doesn't work well now.)

Then, all the other lenders kick in and outbid the first lenders, who bid again at a lower rate, then again etc. This just creates rates to go down, as everybody is bidding lower to stay in the game and pushing others out of it.

Actually by doing this, some members are not only bidding against the others but also against themselves. I see some members have bid 7 times 100€ slowly reducing the rates as they were outbid, and finally get the same rate as all the others get when you bid at the last minute. Others bid only once or twice, but with a chunk of 1000€, which means 5% of a 20K loan.

I think if we only bid once at the last minute, we could easily gain a few points. But that's just my own 2 cents ;-)

Wheety

Managed to guess correctly for the last 2 loans that closed. Got the highest rate by guessing early and both closed on my rate but I was in before the cut off. :cool:

Wasn't going to go for Colour Savers but took a gamble.

Just wish LinkedFinance put a deadline on the companies accepting or rejecting a loan. I know when it's quite a high rate, they seem to take forever to decide.

Wheety

Katawalah wrote: »

Interesting point about the 1 year loan. I didn't think about it and it make them more attractive to me now. I also like the idea to tie my money for only 1 year instead of 3, as the interests paid in the last year are very low.

Obviously there's a couple of mistakes in there. I meant to say returns monthly for both. Have fixed this now.

I can't think straight at the moment, I'm currently studying, but maybe someone can work out the difference in fees too. If the loan is being paid off quicker, does that mean your fee will be lower too?

sceach16

My understanding of any rate of return (ROR) is that it presumes that the capital returned is reinvested at the same rate.

If at the end of a loan, the interest component is low and capital is element is high, it will not significantly impact the ROR unless rates collapse over the term.

In this context, I year loans at 8.5% are much less attractive than 3 years loans at (say) 12.5%. 3 consecutive 1 years loans at 8.5% would yield 4% less PA or about 2/3 of the 12.5 % loan.

Am I (broadly) correct ?

newacc2015

Mila Calm Ax wrote: »

The low interest rates would be acceptable if there was some form of collateral/guarantee, other than 'you have my word'. But without that, the interest rates do not reflect the risk IMO.

Does any one know what the creditor payout will be in the case of a default eg Revenue first, will linkeded in be at the same level or after a bank has got their pound of flesh?

Nody

newacc2015 wrote: »

Does any one know what the creditor payout will be in the case of a default eg Revenue first, will linkeded in be at the same level or after a bank has got their pound of flesh?

Unsecured debt holders; last in the line which in practice means pretty much zero chance to get anything (there was a reason they filed for bankruptcy after all).

Strettie11

Some stats on linked finance autobids at start of every loan

Loan Type AutoBid Funding Average Rate Average Bid
Consumer € 5,060 13.5% € 187
Manufacturing € 6,680 13.5% € 208
Young Business € 3,750 13.6% € 156
Knowledge € 6,880 13.2% € 200

traprunner

I have a loan that was due to have a repayment yesterday but was not. Is it normal for repayments on weekends to be processed after the time?

traprunner

It's OK. The repayment is just after coming through.

spudwould

traprunner wrote: »

It's OK. The repayment is just after coming through.

Any repayments that are sue on the weekend or Bank Holidays are paid the next working day

m320325

Has anyone seen the questions on the Easons loan? do you know if there's any connection between these 2 companies?

Wheety

I don't see them. It must be for VIPs only

sceach16

m320325 wrote: »

Has anyone seen the questions on the Easons loan? do you know if there's any connection between these 2 companies?

There is response in the Q/A. The Validation segment is blank on my browser. You should note this is not a loan to Easons but to a franchisee trading as Custcare Ltd.

scheister

was randomly looking at the site and noticed the Marquee AV loan was closing in an hour and still had loans at 13.4% are live so took at stab and offered 50 @13% thinking i should be safe. Just about got in. 1 bid got in at 13.1% so looks like it was some final hour

1huge1

Put 12.5% on that two days ago, looks to be accepted now unless they cancel their loan application.

Cute Hoor

scheister wrote: »

was randomly looking at the site and noticed the Marquee AV loan was closing in an hour and still had loans at 13.4% are live so took at stab and offered 50 @13% thinking i should be safe. Just about got in. 1 bid got in at 13.1% so looks like it was some final hour

€6,000 (20% of the amount sought) bid in the last minute

Welruc

Cute Hoor wrote: »

€6,000 (20% of the amount sought) bid in the last minute

How do you know this? Were you just watching or is there a way of telling what time bids are placed?

at9qu5vp0wcix7

deuceswild wrote: »

How do you know this? Were you just watching or is there a way of telling what time bids are placed?

The very first column tells you when a bid was placed. It isn't available on the mobile version of the website.

Cute Hoor

deuceswild wrote: »

How do you know this? Were you just watching or is there a way of telling what time bids are placed?

I was watching, when the loan finishes and you refresh the screen ('Loan Offers' screen for that particular loan) you can see all the bids, successful and unsuccessful

sceach16

A lot of people happy at this level. Not for me....at this stage I am trying to lock in at higher rates for 3 years while spreading risk. Difficult !:D

Wheety

Can someone clear something up for me? I probably should have looked into this before investing in the loans on LinkedFinance but how do you pay tax on the interest? I'm a full time, PRSI paying, employee.

Do I log into my online account with Revenue and declare the extra income? Am I right in thinking that 2015 income should be declared by October '16? If a loan defaults can you take the loss from interest earned?

Squall Leonhart

Wheety wrote: »

Can someone clear something up for me? I probably should have looked into this before investing in the loans on LinkedFinance but how do you pay tax on the interest? I'm a full time, PRSI paying, employee.

Do I log into my online account with Revenue and declare the extra income? Am I right in thinking that 2015 income should be declared by October '16? If a loan defaults can you take the loss from interest earned?

Strettie posted a reply to a similar question I had posed a while back on this thread;

http://www.boards.ie/vbulletin/showpost.php?p=99235472&postcount=246

Hopefully that helps some.

newacc2015

sceach16 wrote: »

A lot of people happy at this level. Not for me....at this stage I am trying to lock in at higher rates for 3 years while spreading risk. Difficult !:D

I imagine 8.5% is probably less than a bank loan. At least the bank will have first lien on the assets in the case of a default.

Mintos has loans at 15% interest with LTV of 50% and I imagine you will have first lien on the assets of the company, as most companies on Mintos dont have bank loans, hence turning to non-bank lenders

Wheety

Squall Leonhart wrote: »

Strettie posted a reply to a similar question I had posed a while back on this thread;

http://www.boards.ie/vbulletin/showpost.php?p=99235472&postcount=246

Hopefully that helps some.

Thanks. And would Mintos be the same? Is it money earned in the state?

scheister

Wheety wrote: »

Thanks. And would Mintos be the same? Is it money earned in the state?

Mintos would be the same. its all seen as income not subject to tax at source. So you would be taxable on interest received in the year.

tomwaits48

i'll ask a blunt question....can I declare the interest earned on my own revenue on-line without the other half knowing I've been lashing loads of savings into linkedfinance?! (we are jointly assessed)

Strettie11

Tomwaits48,

They always find out :-)