Exactly :)
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I personally like to invest in $500 chunks. If I need to sell my loans, I can do so $500 at a time as opposed to pulling out a whole $50k. Also if i get an early repayment, it's easier to reinvest $500 than it is to reinvest $50k
Yes... I'm somewhere in between :) There are always early repayments coming ( which is good = choices ) however I viewed the SM $50 ( or 1% ) Fee charged and decided to invest in larger loan parcels ( 20K to 25K ). For me this meant if I need to buy a new car - sell the 1 x loan and break fee is just 0.0025%....
Just comes down to personal choices.....
This SM website is worth checking in with everyday!! Loan Shield Value
>> https://www.squirrelmoney.co.nz/look...er-your-money/ <<
How long does it generally take for loans to get filled? I have a $5K order in at one step below the other "bids" presently. Also, are all the loans generally 5 years? 2 and 3 years seem pretty dead.
Thanks, and are most loans in the 5 year range?
Thanks, their platform seems pretty dead to me.
There are 7 new loans ($150k) coming to market soon
Is anyone Actively getting into any loans currently at Squirrel?
I've been watching for 3 weeks now and Loans available always show ZERO for any term length!
I also see the Investors Funds for 5 Year loans @ 9% grow and grow till it's now at 123K
Are my observations correct and things have ground to a sudden halt @ SM??
I had managed to get around $7K put to work early last week but don't really understand the platform mechanics. I think I bought someone else's loans and was able to skip the queue by "matching them".
Their overnight account credit is killing them too, it is pointless to add money and then have it sit there doing nothing for weeks for anything come up. Nor do they have email notification of loans coming on market or requiring matching. Investors have very little knowledge about timeframes with them.
With LC funding is credited near instantly and with their notification emails I can invest in loans instantly too. Such simple things.
Only 1 out of 4 investment orders (for 3 yrs) that I put in 2 weeks ago has been taken. As far as we can see, there are no loans there right now needing financing. All we can do is wait really.
Just check the potential and qualified borrower amounts, as well as other investor bids.
Then you can decide whether to deposit more funds, hold your current level of investments, or withdraw funds
With 156K of Investor funds waiting for 5 Year loans..... and only 41K of Qualified Borrowers.... It gonna take a wee while for folks to get Invested!!
Attachment 8890
There's $130k of Qualified Borrowers. I personally always create an Investment Order for each term.
It takes me about the same time to invest $500 in SM as does in LC (unless you are in front of the computer 24/7 which I'm not).
Attachment 8891
Just got a loan at 8.95%. I put in a lower bid at 8.85%
still almost $150k of bids for 5 years, so not adding any further funds
As of 1.00pm today there are 172K of Investors funds waiting for 5 Year loans @9%!
OK the penny has just dropped....
Now with 218K of investor funds sitting waiting on 5 year terms - I've never see this much before.
It must be following their recent Road Show around NZ and the success that it has created with new Investors.
Literally they have been Flooded with New Money.
Attachment 8915
Still got into a loan at 8.95% this morning
Potential Borrowers are now over $1.5m which is the highest I've seen it. It's great to see.
Attachment 8938
Good to see the 'looong' queue of 5YR term Investors has whittled away over the last week or so.
Put some $$'s in Thursday and they got matched up Friday day time ( back to normal maybe now! ? )
There is $42,000 Awaiting Funding over at Squirrel Money
Attachment 9056
I see that borrowers with lower credit ratings can pay 16.95% to 17.95% interest on Squirrel. Has anyone out there invested in a loan and received a higher rate than 9%?
The SM Reserve Fund dropped by 33K overnight!
Coverage Ratio also dropped from 2.49% to 2.1%
A rather large Write Off!
Attachment 9067 Attachment 9068
Woah that is a big write off. Wonder if it was one loan or many?
Hey Emerald,
The way the platform works is that we pay investors a set maximum rate by term (that we can change depending on supply and demand) but which we haven't moved since soon after launch. So for 5 years that is 9.00%. Investors can bid below that level to get their money invested faster.
With an unsecured 5 year E grade loan at 16.95% the difference is the risk premium which is paid into the reserve fund which then takes the credit risk. As such your return doesn't change depending on risk grade. In the event the reserve fund was depleted then we can haircut investor interest to replenish it thus socialising the loss by reducing investor returns. This maximises diversification but keeps investing simple.
Cheers, JB
Hey RGR,
Remember that consumer finance loans typically pay back way faster than term. You also have the secondary market so can sell your loans at any point of time. To date 5 year loans have sold very quickly especially when at close to 9.00% due to strong investor demand.
Cheers, JB
You guys are fast! It was one loan of $33,000 secured over a house where his business has gone under and took the house out too! It was a C grade. It had been in arrears for a while so good to write it off. We'll still look to recover what we can.
In the early days we're going to have swings like this, but they'll decrease and the reserves will grow faster.
The book is now at $10m so we are reserving around $16,000 per month.
In the first 6 months after launch (our first two cohorts) we had most of the write-offs. This is the biggest single write-off but the arrears rate is stable and declining as that part of the book runs off. We know the intimate details of each write-off as there has only been 6 totalling $100,000. We review every default against policy to identify policy/process weaknesses and then close the gaps. More recent cohorts are performing very well with next to no arrears and no surprises.
Defaults tend to spike around 12 months. Earlier then that is usually fraud related and we're not seeing any recent defaults which is good. Our arrears rate is very low at 1.70% overall and 2.80% on the older book.
What's working really well for us now (as we've evolved and learned and adapted) is that 100% of bank data comes to us electronically, we have comprehensive credit reporting, multiple credit bureaus, and tighter policy around self-employed and some migrant segments based on what we've observed in the book. We are constantly looking at ways to improve our credit decisions and are looking to publish more data to the web site.
Cheers, JB
Love the engagement JB. Thumbs up from me.
Had a loan repay in full yesterday about 9 months into a 3 year term. Was able to reinvest immediately so no worries. It actually makes sense to me that people borrowing in this way would knock the loan on the head as circumstances allowed. Main thing is to get the rate of interest on the money invested and be able to roll it on to someone else when someone repays.
A further 51,000 awaiting funding at 9% for 5 years at the moment according to the portal
There is now 93k for 5 years awaiting funding if anyone is interested.
360K currently waiting for investing in 5 Year loans....
5 Year lending appears to have slowed right down since the end of the last quarter at SM
Has anybody been getting serious funding into 5 Year loans recently apart from rats and mice single figures?
My Interest and Capital payments from SM are now going into Finance Direct ( Lending Crowd's parent )
Interesting that Squirrel issues loan to borrowers at fixed listed rates (average 12.56% according to the site currently), takes its 2% cut, deducts its 2% shield buffer, but then also keeps the Investor rate difference (loan bought first by squirrel at 9%, then onsold to investor at 8.5%, due to lack of sufficient loans causing investors to undercut each other). Isn't this a hidden unadvertised fees on loan, or have I misunderstood this model?
Free market in the ability investors have to undercut each other and jump the Q. But if you are Squirrel, and you buy a $100,000 loan at 9% for 5 years and sell it a microsecond later to 10 investors at 8.5%, you are reaping 0.5% on the life of the loan with no money down. In my understanding it is called Fee, not Free Market... but maybe that's not what Squirrel is doing... Or is it? :eek2:
Wow, you're saying Squirrel is bidding for loans on its own platform? That would be highly unethical...
And yes I am having trouble putting money to work now.
@beacon SM has got to make money somehow. SM is a business with employees, rent, etc to pay as well as a platform to maintain and marketing expenses and the list goes on. I'm personally very happy with the returns, much better than the 3% I would get from bank term deposits.
Squirrel Money has just passed the $2mil mark of Potential Borrowers for the first time ever.
Attachment 9252
Well that didn't last very long. 5 hours later and I can't see where $700k has gone! Certainly wasn't picked up by SM lenders.
Attachment 9253
It looks like as more money comes into SM from investors, interest rates you need to bid to get invested come down (logical I guess), shame it doesn't work the other way as more borrowers come onto the platform.
Here I am looking AGAIN for somewhere to invest my money easily.
Sorry Beacon hadn't been on here a while so just picked up your query.
The borrower rates are carded based on their risk (including applied risk premium) and assuming the high end of the investor bid spread. The borrower always gets the advertised rate. The Squirrel margin is also always the same (1% on A grade, 2% on B grade ....) If investors bid down their return we pass the difference to the reserve fund which benefits all investors and covers any potential losses.
At the moment we've had a bit of a surge in investor activity so we have surplus funds in the platform and investors have started to bid rates down a bit. This will be good for growing the reserve fund.
We've got about $1m of borrowers coming through monthly and whilst that is growing, it's only growing slowly. The joys of 100% retail funding and wanting to keep acquisition costs sustainable!
We don't bid on any loans for 24 hours and then we only bid in at the maximum investor rate to settle the loan, so Squirrel never makes any money on the secondary market and the investor return is maximised. We essentially only bid in where there is a shortage of investor funds to get the loan settled. We're not bidding at all at the moment as plenty of investor bidding going on. Hope that clarifies.
We've had a big week of loan settlements this week, so will hopefully clear surplus investor funds over the coming couple of weeks.
Thank you JB. Refreshing to see your engagement and transparency - to educate and clarify ...
Not much going on at Squirrel lately. I've had 3K waiting to be invested for 5 years at 8.75% now for over a week and it's still sitting there. Longer term, there needs to be a better re-investment process than this otherwise surplus cash is just sitting around too long.
I see Squirrel continues to get even more choked up with Investor Funds on offer for 5 Years.
As of this morning 330K for Investment offers as low as 8.45% for 5 Years!
Attachment 9291
http://www.scoop.co.nz/stories/BU171...+November+2017 Interesting Overall picture
Why don't any P2P companies allow opening joint accounts just like a bank does? It would be so convenient for mum and dad investors. Can Mr. JB@Squirrel throw some light on this? Thanks in advance.
Hats off to Squirrel Money for continued attention to Customer Service over Xmas Day and Boxing Day...................
I processed account Withdrawals on BOTH Days and they were actioned same day ( ASB to ASB )
Well Done to Charles and the Team :) Happy New Year to all @ SM.....
So I see there are loan/s on the secondary market for $484. Does anyone know how to bid on this - considering the minimum investment offer must be $500?
I think it is matched with the first one in Q on that rate. Have a Happy New Year, fellow investors....
That's the bidder's Q
Good to sight that the "Reserve Funds Coverage Ratio" has again attained Double the "Expected Loss Rate".
Speaking for myself only - It provides an added feeling of Security.
Attachment 9437
SM took a largish Write Off over night ( 47.5K )
Last night.
Attachment 9491
This morning.
Attachment 9492
You got to love SM's reserve fund doing the job that was set up to do
Exactly :)
I see the Reserve Fund Levy ( which borrowers pay ) is now at a high of 2.05%.
This is positive as it 'fills up' faster.....
RWT Certificates for the 2017 \ 2018 Tax Year have been ready for Downloading from the SM website for a good few days now already :)
Just put on my first bid :)
How long does it generally take to place a 9% order?
I read that JD mentioned 3% interest for on-call funds. Has that been activated?
Have a good chunk in Harmoney am happy with that being locked away medium term. SM appeals provided the secondary market works for liquidity if needed.
I just had $$'s in for 7 Days waiting for 8.9%..... Removed the funds after 7 days had passed and not a chance of getting close to that level.
Currently it is a "Dutch Auction" down to lowest rates I have ever seen ( about 8.45% for 5 Years! )
The P2P Lenders DO Not offer Interest of Your fund held ( otherwise they have to conform more to Banking Regs )
@leesal Given that there is currently $239,506 of bids in the market for 5 years it might take 1-2 weeks.
The beauty with SM is that you create your order and then go to the beach! I personally don't use the HM auto-lending function so I find SM to be a lot less time consuming.
Thanks Guys. Did wonder with that much how long withh 200k+ out
I'll still try top dollar. Its FIFO right? Might be worth painting the house and see if gone through when its dry.
Would be much nicer if all the investors went in at 9%, and waited patiently in line ;)
Nothing. Still bidding for $500 worth at 9%.
Have no idea on whether any loans before mine on 9% have been filled.
The "Recently Funded" figure changes on a regular basis so that means all the orders with lower interest rates are picked up first
It's clear that many of us (myself included) are very happy with about 8.5% interest on 5-year loans. I think there are quite a few reasons:
1. In the context of bank interest rates running at just over 4%, 8.5% is excellent
2. Bidding around this figure greatly increases the rate at which investments are taken up, avoiding money just being squirreled away in Squirrel's bank account (sad no interest for that...)
3. Keeping lender interest rates as low as possible probably decreases borrower defaults and problems -- though defaults matter less to us than to other P2P lenders
4. It stops me feeling I'm committing the sin of usury, and may still go to heaven
--any other reasons, for or against?
Reason against - Race to the bottom.
Is +4.5% an adequate MRP for the inherent riskiness of the debt
@ Saamee - no movement. Filtering a good chunk through Harmoney, not that worried if doesn't get picked up.
I have moved all of my money from Squirrel already due to low return of 8.5%. The reason to open an account with squirrel was the Reserve fund which gave me a sense of safety against loan defaults. I have been able to achieve 12.5% with Harmoney in the last 3 years and it is easier to find loans to lend on their platform.
LC is even better than Harmoney when it comes to returns but it is near impossible to find loans there.
There has been a very low number of loans on HM in the last few weeks and out of those very few loans I wouldn't invest in 90% of them. It makes no sense to me to invest in HM loans at 9% interest rate considering those loans are unsecured, HM charges 15-20% in fees and HM can be very time consuming and time is money.
For the reasons above I'm personally very happy with earning 8.5% return on Squirrel Money.