LinkedFinance - new website

Dream123

benjamin d wrote: »

I thought so alright. Though I have noticed in the last few months that often there are only 6-8 loans up at a given time where there used to be up to 13 or 14.

I notice they have removed the 'total bids to date' counter that used to appear on the site

I think this counted rejected bids under the old auction approach as well but I used to watch as a measure how much activity was happening

In my view (not exactly scientific) there seemed to be a bit of a jump in activity when they switched to the fixed rate approach but I don't think this has been sustained

Welruc

Quick question for you guys.

I currently have 1600 invested at an average of 11.5% and i am looking to what the account will be worth in 4 years.

Assuming that none of the loans default :cool: and i reinvest all returns with an additional €100 per month.

Anyone have a formula to work this out or can give a ball park figure?

sceach16

deuceswild wrote: »

Quick question for you guys.

I currently have 1600 invested at an average of 11.5% and i am looking to what the account will be worth in 4 years.

Assuming that none of the loans default :cool: and i reinvest all returns with an additional €100 per month.

Anyone have a formula to work this out or can give a ball park figure?

Sorry....too complicated for me!

Nody

deuceswild wrote: »

Quick question for you guys.

I currently have 1600 invested at an average of 11.5% and i am looking to what the account will be worth in 4 years.

Assuming that none of the loans default :cool: and i reinvest all returns with an additional €100 per month.

Anyone have a formula to work this out or can give a ball park figure?

8,645.56 EUR assuming zero default and that you can find 11.5% loans directly before talking taxes is what I get plugging into a normal compound calculator. Keep in mind that's the value after 4 years so you'd have 8,645.56 EUR outstanding in loans and zero in your wallet with the full loan duration left before you recover all the money (which would mean the net amount after another 3 years of waiting would be higher assuming no defaults due to more interest coming in). In reality it would be lower between defaults, delays in interest payments, not all interest paid on the first day every month etc. but as a ball park figure there you go; oh and of that amount 6,400 EUR is your own deposited money.

Welruc

Nody wrote: »

8,645.56 EUR assuming zero default and that you can find 11.5% loans directly before talking taxes is what I get plugging into a normal compound calculator. Keep in mind that's the value after 4 years so you'd have 8,645.56 EUR outstanding in loans and zero in your wallet with the full loan duration left before you recover all the money (which would mean the net amount after another 3 years of waiting would be higher assuming no defaults due to more interest coming in). In reality it would be lower between defaults, delays in interest payments, not all interest paid on the first day every month etc. but as a ball park figure there you go; oh and of that amount 6,400 EUR is your own deposited money.

Thanks for the reply, but this doesn't take into account the money paid back each month also being reinvested

benjamin d

deuceswild wrote: »

Thanks for the reply, but this doesn't take into account the money paid back each month also being reinvested

I'm pretty sure it does.

What it doesn't take into account is your bids sitting for 2-7 days before being accepted as loans, thereby earning nothing, and any money under 50 sitting as available cash.
At least 50 euro will probably be earning no interest at any give time.

Welruc

benjamin d wrote: »

I'm pretty sure it does.

What it doesn't take into account is your bids sitting for 2-7 days before being accepted as loans, thereby earning nothing, and any money under 50 sitting as available cash.
At least 50 euro will probably be earning no interest at any give time.

No it adds the interest returned at the end of each month but not the principal.

The first month would return roughly €13/€14 interest and €50 of the principal.

I think that the above calculator for say the first month it is adding €113 (€100 deposited with interest €13 interest) but it should be adding €163 to include the principal that is also returned.

benjamin d

deuceswild wrote: »

No it adds the interest returned at the end of each month but not the principal.

The first month would return roughly €13/€14 interest and €50 of the principal.

I think that the above calculator for say the first month it is adding €113 (€100 deposited with interest €13 interest) but it should be adding €163 to include the principal that is also returned.

But it's assuming that the principal is staying invested/is automatically reinvested at 11.5%, when in reality the principal repaid would sit for a time earning 0% interest.

The extra €50 you're referring to in the first month is not entered as new money, it's still part of the principal.

Nody

deuceswild wrote: »

Thanks for the reply, but this doesn't take into account the money paid back each month also being reinvested

Actually it does; it's set as a monthly accumulator which means it calculates interest on monthly basis and that interest becomes eligible for interest the next month. It does not matter if you invest 1600 EUR and get it back monthly or if it sits there for three years giving 11.5% every month from a calculation perspective; it's all the same for accumulation purposes. What's not accounted for and as called out is the fact you're not going to be sitting 100% invested 24/7 as it assumes nor the fact that at the end of the period you'll not have that much in cash but in outstanding loans of various durations.

ShoulderChip

Hi quick one, and apologies as it surely has been asked before.

They allow four free withdrawals a year.

Is this four in 2016, four in 2017 etc.

Of if I withdraw today will a 365 day counter start and I can only do three more before this day next year? As opposed to five were it the calendar year way?

Dream123

ShoulderChip wrote: »

Hi quick one, and apologies as it surely has been asked before.

They allow four free withdrawals a year.

Is this four in 2016, four in 2017 etc.

Of if I withdraw today will a 365 day counter start and I can only do three more before this day next year? As opposed to five were it the calendar year way?

I asked a similar question here a while back and the answer I got was 4 per calendar year - so while I made 4 withdrawals in the 2nd half of 2016 I expect to be able to make one for free in January as the clock starts again on 01/01/17

manafana

just heads up to anyone on Mintos good few current guaranteed loans going at 1% discount atm.

sceach16

Funding Circle --"You can earn a current estimated return of 7.1%* per year

The current estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans today. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. "

Copied from their website.....Note return is after bad debts and charges but before tax.

BUT U MUST BE A UK RESIDENT TO LEND (Sorry!)

Nabber

How often do live loans come about?

sceach16

Nabber wrote: »

How often do live loans come about?

Fairly often, as in a lot today but generally 5+ pw. Depends on the rating and duration. "A" loans for 12 months could be filled every 20 minutes ( OK slight exageration) but depends on circumstances.

manafana

one issues now is autobid is killing any of the good loans (or supposed ones anyway) I don't get why they didnt bring in just maximum rates on loans and allow bidding. SOme lenders could have easily got lower rates.

Hard to get involved now as autobid isn't something i like given my distrust of the LF ratings.

sceach16

I am looking forward to the Q4 report on bad loans which I presume will incorporate the changes suggested by Strettie and others!

sceach16

BGRSB limited payment due today has not arrived in my account. Other payments have.

Email from Linked after posting

"I am writing to you in relation to the above loan. The borrower, BGRSB Limited t/a Just Desserts, was not in a position to make it's most recent loan repayment. This will mean that we will not be able to transfer your repayment for this loan on the due date 11/01/2017.
We have been in contact with BGRSB's owners, Brian and Bernie Campbell, who have explained that the business has faced recent difficulties which they are currently dealing with.
They remain fully committed to repaying their Linked Finance loan and will be reverting back with a repayment proposal while these difficulties are being addressed.
I will contact you once again in early February with a further update."

sceach16

I have three non paying loans. All are cafe's/fast food and all are borrowers who wanted a 36 month loan to expand....all stopped paying about 12 months later. Draw your own conclusions about this sector.

FinanceDublin

sceach16 wrote: »

I have three non paying loans. All are cafe's/fast food and all are borrowers who wanted a 36 month loan to expand....all stopped paying about 12 months later. Draw your own conclusions about this sector.

Yeah. The only loan I'm nervous about is a cafe I invested in for a 36 month loan about 6 months ago. A lot of very similar competitors in the space (doughnuts) opened up around the same month, and the market is now oversaturated. If I got to even a 24 month return on it, I'd be happy I guess. Have 16 active loans, most now coming to maturity in 2017, and have stacked it such that my last reinvestments were in Oct-Dec for 12 month max. Intend to withdraw every quarter from here on. Autobid takes the bit of fun out of it.

sceach16

sceach16 wrote: »

I am looking forward to the Q4 report on bad loans which I presume will incorporate the changes suggested by Strettie and others!

Friday the 13th! Still waiting........:mad::mad::rolleyes:;)


It came late today Friday 13 !!!!

tadcan

So this is my third year on the site, hard to believe. The first few loans are coming to term, its a pity I have to wrap it up.

FinanceDublin

tadcan wrote: »

So this is my third year on the site, hard to believe. The first few loans are coming to term, its a pity I have to wrap it up.

Yep, same as. Imagine I was fairly early on it relative to most. Think my first small test loans are one or two payments away from conclusion, nice to see all three businesses doing well. It's just the way of these things I guess. When I saw autobid first being introduced, I didn't pay much attention as I thought "not for me".....but it quickly became apparent that many of the more attractive (to me) loans were impossible without autobid, and that sadly did two key things:

1. Took the element of fun out of trying to nail the best percentage (I can understand that from the other side of the table, it gives added certainty on the rate, so that alone isn't the deal breaker but....)
2. That combined with no real ability to scrutinise. Most loans aren't open long enough to do a Q and A and you're effectively bidding blind. I really don't like that.

I had 15 loans currently open from pre autobid, none of them have gone bad and only one even has the potential to. I have three open since autobid and frankly two of them I wouldn't have touched myself...and I just don't like that at all.

On a closing point, I'm not one of these evangelists of other platforms like Mintos, as it too has clear flaws ("loans aren't what they used to be" "better rates elsewhere", yada yada, you get the same complaints of this ilk on every small loan platform after a while), LinkedFinance sat in a nice little hobbyist niche for me but with all the autobid stuff, a lot of what I saw as the advantages (getting to know the business a small bit, taking your time, learning a bit) have eroded. You could always get better returns elsewhere, that hasn't changed and autobid hasn't substantially disinprpved that: there was more capital coming into LF month on month and the returns would've been squeezed down in a bidder model anyway.... but what worked on LF has kinda stopped working. Pity.

at9qu5vp0wcix7

Nailing the best percentage was an incredible amount of fun, those last few minutes before a loan closed were non-stop excitement

Dream123

FinanceDublin wrote: »

Yep, same as. Imagine I was fairly early on it relative to most. Think my first small test loans are one or two payments away from conclusion, nice to see all three businesses doing well. It's just the way of these things I guess. When I saw autobid first being introduced, I didn't pay much attention as I thought "not for me".....but it quickly became apparent that many of the more attractive (to me) loans were impossible without autobid, and that sadly did two key things:

1. Took the element of fun out of trying to nail the best percentage (I can understand that from the other side of the table, it gives added certainty on the rate, so that alone isn't the deal breaker but....)
2. That combined with no real ability to scrutinise. Most loans aren't open long enough to do a Q and A and you're effectively bidding blind. I really don't like that.

I had 15 loans currently open from pre autobid, none of them have gone bad and only one even has the potential to. I have three open since autobid and frankly two of them I wouldn't have touched myself...and I just don't like that at all.

On a closing point, I'm not one of these evangelists of other platforms like Mintos, as it too has clear flaws ("loans aren't what they used to be" "better rates elsewhere", yada yada, you get the same complaints of this ilk on every small loan platform after a while), LinkedFinance sat in a nice little hobbyist niche for me but with all the autobid stuff, a lot of what I saw as the advantages (getting to know the business a small bit, taking your time, learning a bit) have eroded. You could always get better returns elsewhere, that hasn't changed and autobid hasn't substantially disinprpved that: there was more capital coming into LF month on month and the returns would've been squeezed down in a bidder model anyway.... but what worked on LF has kinda stopped working. Pity.

Good points here

My own experience is similar, linked finance was a good investment early on and an interesting hobby as well. I have also liked going to some of the businesses as a customer knowing that I was supporting as a lender

More recently, quality of loans looks weaker, interest rates lower and I don't like the lack of opportunity to review loans before bidding. I've stopped bidding and intend to withdraw funds as they mature. Since I made that decision I've had a few more loans miss payments so that's just confirmed my decision.

I've made about 250 loan investments and generally the early ones have performed well, the ones made in the last 18 months have higher arrears , I guess part of it may be that I did less research before bidding as time went on so I won't blame linked finance for that entirely

I'm currently dabbling with mintos, still not decided if the higher returns are worth the risk level so I'm keeping it small

scheister

Mila Calm Ax wrote: »

Nailing the best percentage was an incredible amount of fun, those last few minutes before a loan closed were non-stop excitement

here i was thinking i had a strange idea of fun. Think my last 2 pre autobid loans i lost out in the dying seconds of the loan

Dream123

Anyone read the new quarterly report?

Any thoughts?

sceach16

Dream123 wrote: »

Anyone read the new quarterly report?

Any thoughts?

Figs look good at 1% default by value. Linked is new, has doubled loans each year ,,,this is 4th year. Default rate 13 of 706. Q3 was 12 loans as was Q2.....Both on smaller total loans. This looks good.

I have 3 new non/slow payers ...loans 12 months through 36 month term...not included in these stats. Are there others?

In summary, figures look good compared to recent Linked estimates but time will tell. IMO, no loan should go west within 12 months. i do not like this.

The very little investing I am doing is for 12 months. The risk/duration premium for longer loans is unacceptable to me.

at9qu5vp0wcix7

Dream123 wrote: »

Anyone read the new quarterly report?

Any thoughts?

I like the idea of showing default principal as well as default rate.

I think a further breakdown could be useful once more data is available in coming years - default rates by sector, and within that, sector default principal relative to cumulative loans funded for that sector.

That could have an influence on autobid parameters, and perhaps make more people comfortable using it (I personally would remain hesitant to use it).

sceach16

Just bid 100 on a craft brewer ....established 4 years and classified as Y....less than 1 year trading. 15% on a 36 month loan.