General loan question

[Value Collector]

Sounds a good deal, better than term deposit rates.

heaps better, There is a bit more risk, but so far no rate setter investor has ever lost a single cent.

Even if the losses to rise above what the provision fund could handle and you had to write of 3% of your loans, the extra interest you earn more than compensates that risk.

 

[luutzu]

My simple rule with lending to friends and family, is never lend more than you could afford to gift them.

Treat is as a gift in your mind, and if the money comes back its a bonus, but never become some ones bank, there is only one serial borrower in my circle, and I told him years ago I wasn't a bank, and I don't lend people money and except for one time that was an actual emergency, he has never asked again, I think he knows he will get a lecture and not the funds, lol.

And if he does it over a family barbie, sizzling them lamb cutlets and veal... he's really going to get it.

No, not the fund, but a full PhD in animal agriculture, health and financial management.

So no friends then?

 

[luutzu]

Interest rates fluctuate, because its like a market for loans.

As of right now

1 Month - 4.0%
1 year - 4.9%
3 year - 8.0%
5 year - 9.2%
Green loans - 6.4%

Loans are paid back with monthly principle and interest payments, and you can set it to automatically reinvest those repayments as they come in new loans at the market rate.

Once you set up you account you simply B-pay funds in, and allocate they into the loan market of your choice, You can invest as little as $10.

If a borrower fails to pay either principle of interest, your loan gets paid from the provision fund, which currently holds about $10 Million in reserves, and they seem to manage the provision fund well, its funded by a fee that the borrowers pay.

Those rates are per annum right?

So if a person lend, does their fund earn interest right away or sits on RateSetter's account until someone borrows it.

I'm assuming interest starts the moment the fund is transferred. That mean there's a pool of borrowers then.

So we're to assumed that there are always more borrowers than lenders on the books. With borrowers only getting the fund if there are lenders that matches their rate?


I probably should look into it to question... but it doesn't make sense to me. Will come back with it.

 

[Value Collector]

Those rates are per annum right?

So if a person lend, does their fund earn interest right away or sits on RateSetter's account until someone borrows it.

I'm assuming interest starts the moment the fund is transferred. That mean there's a pool of borrowers then.

So we're to assumed that there are always more borrowers than lenders on the books. With borrowers only getting the fund if there are lenders that matches their rate?


I probably should look into it to question... but it doesn't make sense to me. Will come back with it.

Yes rates are per annum.

You transfer your funds in via bpay, funds appear in your holding account the next day, and then you pick which market you want to lend in and what interest rate you want to lend at, and it sits there until a borrower takes it.

Borrowers pop up through out the day, and take the loans. If you put your funds in the market at about around where the market is, you will generally be matched that day, or it may take a couple of days if you select a higher rate.

Generally there is always lenders funds sitting there because, some people set unrealistic interest rates, so it’s just up to the borrower to take money when some one offers an interest Rate they are happy with.

Try it, you can start with $10

 

[Value Collector]

And if he does it over a family barbie, sizzling them lamb cutlets and veal... he's really going to get it.

No, not the fund, but a full PhD in animal agriculture, health and financial management.

So no friends then?

I actually don’t talk about veganism unless someone asks me a question, it is a touchy subject, probably more so than religion, often just saying your vegan offends people, lol.

But, people can’t help but ask questions, so I generally just wait and answer them.