Comment on the other P2P companies seems to have dried up on this forum. Only Harmoney is getting regular input. Any thoughts why?
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Comment on the other P2P companies seems to have dried up on this forum. Only Harmoney is getting regular input. Any thoughts why?
No news is good news IMO.
Other than Harmoney I'm also with Squirrel and honestly there isn't much to talk about.
Because the loans are much greater in size than Harmoney I only get a handful of payments each month and due to the reserve fund, they predicatably come in on time each month.
There aren't any risk grades / defaults / double up on fees due to rewrites which is what the majority of discussion re Harmoney is about.
It just ticks along in the background without any input from myself.
That's interesting Finite ... are you able to pinpoit the approx time frame this late fee payment disappeared?
Email from Mark Bardi October 2015
"Yes, we stopped charging borrowers late fees quite a few months ago because the system wasn't working the way we had intended.
We may charge fees again in the future, although we may decide to allocate them to help cover collections costs."
OMG .... Not what one could call! 'Full Disclosure' Open & honest & all that!
Harmoney currently have market share, did pay to be first out of the gates, but as others get their momentum up and mature a little, I'm hoping they'll be good alternatives. It is healthy to have a selection of opposition - hopefully it'll keep them all on their toes! Would hate any cartelling!
However I do get a little bit more of a feel Harmoney is 'Starting' to take a slither more notice of their investors, but then again - I suppose it would save a lot of work for them, if they ensured they pissed off the vast majority of their fractionalised investors, & had most of the loans hoovered up by hearland & the likes!
Have just calculated what I consider the true service fee on my account (fee as a percentage of gross interest received) and find it at 5.86%. Those re-writes certainly make the stated fee of 1.25% unrealistic.
The fee was always stated as being on interest and capital. Have been investing for almost 1 year. Have had over $5000 repaid in interest and principal through rewrites and normal repayments. Have paid just under 1.25% fees a total of about $60. I think it's quite fair for the 15% return I've had so far on my money.
The fees I have paid to Harmoney are a scintilla compared to some greedy stock brokers charging a total of $60 for 1 buy/sell trade; plus the big risk there is of losing capital value of shares very quickly sometimes.
I am very happy about fees v returns I get from P2P lending.
I find that the rewrites give me a second chance to reconsider my investment criteria, I think it's all good.
Has anyone done the calculation =Fees/(P+I)% from their latest dashboard figures and found it to be less than 1.25% ?
I thought they said at one point that if the fee would put you into negative return (due to early repayment), they wont charge it (eg. If the fee exceeds the interest received, they waive the fee). Ive seen repayments within 4 months which would probably result in this.
I had a loan repaid in full 3 days ago, it was 10 days after it was taken out. They took their 1.25%, so I lost some of my principal. This and losing principal on rewrites are two of the things that hold me back from putting large amounts into the platform. (Yes I am a gambler in this regard) The other major thing for me is poor transaction reporting, so much is only available as a summary, no real transaction log.
There should be a penalty on the borrower for repaying early. The penalty could reduce during the loan period. My guess is if they pay within 3 months of taking out the loan the lender loses out. Not enough interest earned to pay the 1.25% and tax.
I dont agree with how harmoney handles the fee on rewrites but if your fee as a % of interest is only.5.86% then that is lower then what lending crowd charge. Here is what lending crowd charge.
"Interest flex
Investors are charged a service fee of 10% of the interest Lending Crowd collects or recovers under any loan agreement. This fee is charged each time interest is paid into an investor's account and will show on an investor's transaction statement as interest flex."
Oh, I do agree completely. I do understand that Harmoney charge their fee based on P&I repaid so no surprises really. I just like to compare the true return on my investment and as Humvee says, 5.86% is still much better than Lending Crowd's flat 10%.Quote:
if your fee as a % of interest is only.5.86% then that is lower then what lending crowd charge. Here is what lending crowd charge.
I would still prefer a higher service rate charged on just interest received rather than the current 1.25% of P&I. By the sounds of it, this could be happening this year.
Good comments... Always remember there is a price to pay for Security... or not Security... The main difference between Harmoney & Lending Crowd!
As others have stated > Harmoney's 1.25% is on both Principle & Interest where Lending Crowds 10% is only on the Interest!
Yes - but the calculation mlt322 has done has shown in his case the fee is the same as it would have been if he was charged 5.86% of interest payments only - so it is a fair comparision
Dont get me wrong I think how harmoney calculates their fee particularly around rewrites lacks transparency and honesty and creates a conflict of interest or a "moral hazard" depending on how you look at it. All i'm saying is the final result is not as bad as what I expected it to be or what other P2P providers openly tell you it will be on their platform.
I take it that you all completed their survey recently asking for opinions?
as mentioned in an earlier post, my spreedsheet works out what the effective service fee is for me due to the re-writes. At the moment it is 2.66% instead of the stated 1.25%. MLT32 and many of the above posters are correct that to compare to Lending Crowd, we should just take the service fee as a percentage of the interest received. Mine is 4.68% which is cheaper than lending crowd's 10%
Yes, one is supposedly secured and the other is not. But then that risk is taken care off by the different interest rates.
I am also invested in Lending Crowd but in a much smaller way than in Harmoney. I guess time will tell which is a better investment. It will have to be at least 18 months. Of course, the real test will come when the economy goes down the drain and I hope we do not have to experience that!
I thought I'd ask your collective opinion about possibly starting a new thread. I've noticed a few issues with the Harmoney system, some might call them bugs. I mention them to Harmoney, but I wondered if you thought it was worth having a separate thread to highlight these issues to other users. Or just mention them here, or not at all?
The latest issue I've seen is a loan in an order that is sitting at 0%, and the order was done a few days ago. The loan is no longer in the investment list. I'm pretty sure it wasn't at 0% when I first invested, so it looks like the loan/application has been stopped, but Harmoney have my money locked up and I can't invest it elsewhere as the loan in the order is still "In Funding".
I had this issue a week or two ago, although mine was stuck at 98% but showing fully funded. It took several days and much back and forth between myself and a few Harmoney people to get it resolved. They said it was because the loan was a rewrite and then turned down by the borrower they had to wait while the refunds flowed around (Not their exact words, just my recollection). They said they were going to address the problem with a change, I guess that hasn't happened yet, or if it has then it was done incorrectly.
I have my doubts about their explanation of the problem, it just didn't sound right to me.
Their IT systems have been a shambles right from the start - hence new management in that department. But it's still woeful.
Have you noticed as you arrive at the login screen there is a message that says "You have successfully logged in"? - Doesn't give one much confidence!
Yes I have seen that one, and;
- % differences between the full site and the mobile site. My guess is one rounds down, the other up.
- Navigation on the mobile site is terrible, back button takes you right out of the screen you are in to the top menu, instead of just the screen you are on, so when viewing a loan I am constantly kicked back because I use the back button all the time. (ok so thats a me thing)
- There seems to be a real slowness in getting loan repayments to show in your account, I can tell when a loan payment has been received because the remaining payment count goes down about a day before the cash arrives. Right now I have 3 repayments doing this, and another due at the same time that is not doing this.
- Lack of a full transaction history, I grab what I can automatically every day, but it is messy and makes it hard to reconcile things.
I find their website to be lacking in so many aspects, perhaps I have picky because of my background (IT for 30 years).
I have not had any problems with their web site now for several months. I don't know much about IT but I was aware of quite a few shortfalls in the earlier months but now it seems to be ticking along nicely. Lately I have been taking out loans only in A B and C grades and I have noticed a decrease in my arrears and also, for some reason loans being paid off seems to have slowed right down. Maybe lack of funds ex Xmas?? All in all I am quite happy with my investment and my service fees so far are not much over the 1.25% which is a lot better than Lending Crowd.
Ooops, That 1.25% was on total received, as a % of interest only it is 7.3% which is still better than Lending Crowd but not by much.
Attachment 7898
Have a look at these odd interest rates vs the grade
That is very odd, wonder what is going on?
Over a day now since I raised my issue with them and no response. But they have been doing something, as my order says it has two loans in it with an annual average interest rate of 0.6%!!! But the three original loans still appear in the order. It's just that one has not been filled. So I'm guessing they're doing some manually butchery of the data to make it sort of about right. Fingers crossed.
I took a photo of Loan LAI-00055155 11/2/16 @ 8.47am .... because, at the time it struck me as surely a Harmoney error ... i wonder did anyone here invest in it ... if so has the income figure been altered? ...
The loan showed monthly income after tax as $22,333.33. (can't see why they'd need to borrow 25,375)
single person aged 20-29
Didn't put anything into that one, I have seen similar things before though. As a general rule if their income seems way higher than what I consider likely then I won't touch it (figuring either they gamed the system and are lying, or there is a bug in the harmoney system, either way it makes me uneasy).
Hi, how many loans repaid early?
Harmoney has some very serious structural conflicts of interest due to various policy it has created/adopted.
Some policy shouldn't be allowed and will end up in court and trail-by-media sooner than later.
I believe the Harmoney will not survive unless it adapts to a win-win-win approach with its various policy. Re-writes being the worst issue atm.
Investors will eventually boycott the funding of re-written loans and/or a competitor will emerge which does all the good things Harmoney does, but without the bad things like double dipping on fees charged to its investors and manipulating borrowers for more fees and debt.
A new crowd funded P2P operator might be able look after the interest of investors and borrowers better rather than a corporate backed P2P like Harmoney.
Any thoughts on that? If anyone seconds this idea let me know and we'll get going on this new project.
Unfortunately the current competition to Harmoney does not offer High enough returns. If the competition did it would attract huge amounts of investment and close down Harmoney rather quickly. Harmony loans should be secured like other P2P's do. No fee on early repayments. Maybe no early repayments should be allowed or have a penalty early payment fee to the borrower for cutting the loan short.
Imagine if there was a socially and ethically responsible P2P lending operator in NZ which actually delivered the returns it advertised without a one sided penalty to the investor if the borrower takes up the offer from harmoney to get some more debt.
Harmoney has done a great job in some ways, but there is room and serious need for improvement.
Why did my last post appear then disappear? Lucky i still have most of it in copy paste....
OTE=Whippeedo;608138]Hi, 2 write offs from how many loans do you have in total?[/QUOTE]
Im only posting from phone so its hard to get exact stats at the moment but that was quite an old post. I now have 18 loans written off.
And 111 loans in arrears. Along with 108 loans repaid early. Total is over 1000
RAR as at 23/01/16 was just over 18%.
A new RAR should be published 23rd of this month
If you want ill post my grade distribution graph next time im posting from a computer.
It is kinda fun if we weren't get screwed on early repayment. That's classic corp greed right there
HI, whats your secret to such a low default rate? You are the most confident one I've seen post.
Be cool to know how much the fees cost, and who much interest was lost by the loans which were early re payers I reckon?
That is the cream we are missing out on....The difference between the advertising return and the real return.
Big gap in returns created by a bloody bad policy of Harmoney.
Current RAR = 13.31%.... I do have to keep myself 'in check' with reality, that if i was not in Harmoney the $$'s would be getting just about 2.75% in the High Street banks! Then I tell myself whatever the re-writes do, the return is still close to 5 times better!
Thanks humvee
Im only posting from phone so its hard to get exact stats at the moment but that was quite an old post. I now have 18 loans written off.
And 111 loans in arrears. Along with 108 loans repaid early. Total is over 1000
RAR as at 23/01/16 was just over 18%.
A new RAR should be published 23rd of this month
If you want ill post my grade distribution graph next time im posting from a computer.[/QUOTE]
To date I still only have 3 defaults. These loans were taken in my first month of investing.
Even though sorting through loans is time consuming, I feel that the extra effort I put in pays off in the long run.
I analyse each loan as to what I feel is a comfortable "repayment v Income" commitment by the borrower. I then try to get an impression of the borrower through the comments they write therefore I never invest in a loan that has "NONE" in the comments section.
Many of the loans I take are for debt consolidation or home improvements, with a spattering for education, weddings and some holidays.
My composition of Loans is 72% A-C : 17,25,30% and 14,10,4% in D, E and F grades. Arrears currently running at 4.20% of Active Loans.
Permutation, I had not considered working out the Arrears / Active Loans ( Outstanding Principal ) ratio - good idea. Out of 243 loans ( mainly B's ) currently 0.005%... Currently no loan defaults to date in 8 months.
Good morning @Rapeedo & @Saamee
Monica Mathis, GM of Harmoney here. Myself and my team would like to extend the offer to come in and meet us to take the Harmoney Tour. We would love to take the opportunity to show you around our business and let you know how things are done here. Monica.Mathis@Harmoney.co.nz
Saamee, the arrears I mentioned, 4.20%, in my previous post are numbers of Loans v Active numbers of loans i.e. average of 4.2 loans per 100 loans are currently in arrears, not the $ amount.
One calculation that I do have on my spreadsheet is the (Interest earned v Outstanding Principal) of my arrears; which currently stands at 10.57% but is variable as the arrears composition changes daily.
All of my arrears currently have had some payment made by the borrowers, it gives me confidence that they will keep paying. I noticed that 2 of the 3 defaults I have had in E,F grades had no payments at all for about 5 months and suddenly "boom" they were Charged off.
I have just over 300 loans A-D grade and no defaults in 11 months.
Welcome Monica
Its good to see someone from harmoney about in the forum.
I was wondering if you could tell us if there are any improvements on the way for the information and ease of access of the information in the dashboard and reports as well as exports.
For example I want to go back and see the full details, notes and descriptions for Charged off loans. The only way for me to do this is to get the loan ID - try and guess what date the order for the loan might have been places (this guess can often be out by one or 2 days) then go to the original orders and open each order to see if the loan ID is in there if its not I have to go pack out - and it takes me back to the 1st page of orders - not where I was at, find the next order and go into that one then repeat until I find the correct order. Also It would be useful to be able to see the date a loan was charged off - currently the appears to be no way to see this
Thanks
Harmoney monthly RAR updated today..... I saw a 0.5% rise! :)
For those who are interested I have been with Harmoney for a full year now and this is how it panned out.
Loans: 492, (36 months 489, 60 months 3)
Average Loan $191
By Grade: A 42%, B 31%, C 16%, D 5%, E 4%, F 2%
Charged Off: 2 (0.4%)
Repaid Early: 100 (20.3) Reduced gross return by approx. 0.8%
RAR per Harmoney 12.41%
Gross Return by my calculation 11.59%
The early repayment "penalty" can be a pain but if it was shown as an estimated reduction in return on the order summary page in the same way as the expected annual default rate is shown, it would give more transparency. Remember primary function is to make a return for its shareholders.
it can be fairly time consuming have to monitor the site at least once a day; this is not a problem for me but I can see that it could be a chore for some.
Overall I am very happy with this investment, it sure beats the less the 4% received from the bank.
Today my RAR crossed the 14% mark! :cool:
You therefore pay your individual PIR tax on this 11.59% return?
How much time per week does it take you to monitor?
How easy is it to re-invest your interest and principal repayments into new loans? Or does your cash sit not earning in between loans?
Why are you investing here as opposed to the sharemarket which averages 10-11%?
Mine went up - but only by 0.1% - so currently its still lower then it was the 1st month the rar was published
Attachment 7900
I do ask also is there a way of sorting within reports to list up all loans that are in the process of being paid ... as in paid by borrower but still in harmoneys process system & yet to be paid to investor ... be good if these showed as a colour... just like the yellow is for arrears & grey is for paid off ... this would be a REAL HELP as a heads up!
I posted a reply to humvee re suppost of requests ... then went back to edit a typo & the whole lot vanished!
Anyway AGREE. We need a date repaid in a column on the report page for paid off loans
And
To go back to check a borrowers first request page is a frustrating exercise ... it does need to be better crossed referenced
I do apply a "light"/quick assessment in addition to harmoneys grade.
Eg of the 7 c,d,e,f loans on the market currently I have only invested in 4
Early on(before about xmas) I was not investing in C grade - hence the lower number of C Grade.
I don't invest in A or B grade on harmoney. As part of my diversification strategy I look to other platforms such as Squirrelmoney and Lending Crowd to fill the lower risk lower return space.
That is what I was hoping mine would be looking like. My profile is a bit different (more in E less in F) but much more heavily in the 36m camp. I wonder if the 36m are showing higher write offs?
I would have invested in over 400 loans so lack of diversification shouldn't be the issue.
I dont know - but my theory is 36m could have more rewrites with people borrowing more and moving to 60m so they still have the same repayments.
It looks like you might be right
I just ran some numbers
Out of my total loans
59% are 60 Months
41% are 36 months
27.78% Of my write offs are 60 months
72.22% Of my write offs are 36 months
51.82% of my paid off loans are 60 months
48.18% of my paid off loans are 36 months
How do your numbers compare?
only 20% of my loans are 60m and writeoffs are also 20% and repaid 22%. Inconclusive for me but you seem to be getting a benefit from the longer loans. I have read US data that suggests writeoffs normally happen early in the loan (regardless of 36 or 60m) which bodes well for you.
Just pulled the stats from a smaller and lower preforming (12.05% RAR) portfolio I have access to
Out of total loans
49% are 60 Months
51% are 36 Months
60% Of writen offs are 60 months
40% Of writen offs are 36 months
33% of paid off loans are 60 months
67% of paid off loans are 36 months
Opposite to your other portfolio then. So from our very limited sample, the only way to increase RAR is to invest more! ;)
I assume this smaller one is more conservative (A's and B's) to have a RAR that low?
I have been avoiding 60m loans while there is no secondary market as waiting 5 years to liquidate a holding is too long. As the data is inconclusive (at this point), I will keep doing this.
No It is also c,d,e,f and 50% of the loans in it were also picked by me using the same general methods
Attachment 7901
I would be very interested for others to post the same figures for their portifolio so we had get a better idea if there is truely a difference between 36m and 60m in rewrites and write offs
My Rar has increased to over 14% in the latest update.
Have had 3 charged off loans E,F grades only, out of a total of just under 500 loans in the last 11 months. Rewrites currently are about 25% of the total loans I have invested, and of those loans repaid ~85% were for a 36 month term.
Attachment 7903
Buffett
1. I probably spend on average half an hour a day on it
2.Because I check my account every day surplus cash gets reinvested almost immediately.
3. Its called diversification, Harmoney only represents about 4% of my portfolio, the balance being in stocks, bonds, property and cash. I must admit though that at the moment it is the most fun investment.
When I was in business we had 2000+ customers and I relied on our credit manager and his team to assess the risks (Early in the piece I made some decisions and I was too often taken in by a plausible sob story). I look on Harmoney the same way: credit management is their area of expertise, not mine.
[QUOTE=
I have been avoiding 60m loans while there is no secondary market as waiting 5 years to liquidate a holding is too long. As the data is inconclusive (at this point), I will keep doing this.[/QUOTE]
i agree, when when one gets to a certain age one doesn't want to leave one's executors with assets that are going to take five years to realise; 3 years is bad enough. I for one would greatly appreciate a secondary market facility.
Hi Humvee, I have been in harmoney about 7 to 8 months and have 1603 loans. My figures are next to yours above in green for easy comparison. What is the total number of loans you have in the above?
It does looks like the 60 months are better in terms of less paid off (10.25% vs 14.69%) and less write off (0.526% compared to 0.863%). Maybe I should change my criteria to favour 60 months. But need to analyse more when I have the time as all 10 of the writeoffs are from the first two months I invested so may have to base the writeoff figures on just those 2 months.