Peer to Peer lending in NZ

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Forums › Finance and wealth management › Peer to Peer lending in NZ

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#1565766 4-Jun-2016 18:55

Cool! The person who was over 90-days in default on my only $1,000 loan on Harmoney has paid the arrears in full. Long may they continue.

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Kiwifruta

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#1565781 4-Jun-2016 19:26

Are credit checks done? Are you told the full name of the borrower?

Skillie

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#1565799 4-Jun-2016 20:17

Kiwifruta: Are credit checks done? Are you told the full name of the borrower?

From their website - https://www.harmoney.co.nz/how-it-works/investor-faq

HOW DOES HARMONEY ASSESS THE CREDIT RISK OF BORROWERS?

All loan applications undergo a thorough assessment to discern the borrower's creditworthiness.  While we cannot disclose the full detail of the assessment process, it includes factors such as an assessment of income and financial records to determine their ability to meet monthly payments; any previous failure to meet financial commitments; consistency between the information provided and that recovered from background checks; and checks for credit history issues including prior defaults or insolvencies. Harmoney then uses the result of this assessment to determine whether the loan application will be successful, and if so, which credit grade and interest rate will apply.

WILL I KNOW WHO THE BORROWERS ARE?

No. You will be provided with demographic information about borrowers, such as their residential and employment status, but you will not have access to any identifying information about them.

rphenix

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#1565808 4-Jun-2016 20:52

I see a lot of posts about Harmoney - any others other than tripp used Squirrel? It seems like Squirrel could be the safer option if your risk adverse?

Linuxluver

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#1565809 4-Jun-2016 20:56

Kiwifruta: Are credit checks done? Are you told the full name of the borrower?

The qualification process is outlined on the site, IIRC.

No.....you don't know who the borrower is.

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rphenix

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#1565813 4-Jun-2016 21:02

slingynz:

http://www.sharetrader.co.nz/forumdisplay.php?33-Peer-to-Peer-%28P2P%29-Companies

Great link thanks.

Linuxluver

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#1565905 4-Jun-2016 23:57

rphenix:

slingynz:

http://www.sharetrader.co.nz/forumdisplay.php?33-Peer-to-Peer-%28P2P%29-Companies

Great link thanks.

That site won't accept a gmail address as valid for registration. I've used nothing else for the past 10 years.

They want an "ISP email address".

I don't have one as far as I know....(and don't want one).

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Send money globally for less with Wise - one free transfer up to NZ$900 (affiliate link).

Sam91

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#1600282 28-Jul-2016 16:18

I read through this thread when it was first posted. I've finally taken the plunge and signed up to Harmoney. I'm a student, so my investment is pretty small. I've generally followed the advice given in this thread. I should've put more effort in and gone purely for 36 month loans. I've ended up with lots of 60 month loans. I have only invested in one note per loan, which seems like the smartest move.

I'd be interested to see other's risk grades, here are mine:

Will post how my loans are going in a few months time.

howdystranger

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#1600337 28-Jul-2016 20:27

I've been doing very minor investing in Harmoney (~$1,000) and enjoying it so far.

I looked at Squirrel Money, but couldn't be bothered with having to bid down interest rates (that's my understanding of how it works at least). I prefer the model on Harmoney where they calculate the risk/return and you can take it or leave it.

My only qualm is that the people who can least afford the loans are paying the most interest. Seems fundamentally unethical to exploit poor people... but I guess the whole financial sector balances risk/reward and in the process exploits people. If only there was a way to give cheap credit to people who needed it and could be trusted...

Linuxluver

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#1600340 28-Jul-2016 20:50

Sam91:

I read through this thread when it was first posted. I've finally taken the plunge and signed up to Harmoney. I'm a student, so my investment is pretty small. I've generally followed the advice given in this thread. I should've put more effort in and gone purely for 36 month loans. I've ended up with lots of 60 month loans. I have only invested in one note per loan, which seems like the smartest move.

I'd be interested to see other's risk grades, here are mine:

Will post how my loans are going in a few months time.

You'll find that re-writes will see your principal repaid from time to time. You should see about $80-$85 in gross returns across the year, actual returns will be less taxes and fees. Hopefully you won't get any / many defaults.

I've tended to avoid F grade and most E grade loans. But occasionally sign up for one or two because the interest is so high. I have arrears on one large loan I made early on....but so far the person lets it go 3 months and then pays up...so my interest on that loan is actually (so far) better than it should be. :-)

My RAR is improving steadily. My gross interest is for the last 8 months, but not always for the same principal amount. I have added funds a couple of times.

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linw

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#1600353 28-Jul-2016 21:19

Interesting info. Thanks for that.

Linuxluver

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#1600355 28-Jul-2016 21:30

linw:

Interesting info. Thanks for that.

You're welcome. My current goal is to see what I have to invest to get a clear return of $100 / month after fees and taxes and any losses.

But for the moment, I'm just ploughing returns back into new loans. Not quite at the $100 / month clear level yet.

The return is definitely better than a term deposit.....but more risky (in small chunks)...as you'd expect.

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tchart

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#1600364 28-Jul-2016 21:43

Linuxluver:

linw:

Interesting info. Thanks for that.

You're welcome. My current goal is to see what I have to invest to get a clear return of $100 / month after fees and taxes and any losses.

But for the moment, I'm just ploughing returns back into new loans. Not quite at the $100 / month clear level yet.

The return is definitely better than a term deposit.....but more risky (in small chunks)...as you'd expect.

If you "plough" the returns back into new loans, does that count as income? Or only when you draw it down into your bank account?

logo

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#1600366 28-Jul-2016 21:55

Linuxluver:

You'll find that re-writes will see your principal repaid from time to time. You should see about $80-$85 in gross returns across the year, actual returns will be less taxes and fees. Hopefully you won't get any / many defaults.

I've tended to avoid F grade and most E grade loans. But occasionally sign up for one or two because the interest is so high. I have arrears on one large loan I made early on....but so far the person lets it go 3 months and then pays up...so my interest on that loan is actually (so far) better than it should be. :-)

My RAR is improving steadily. My gross interest is for the last 8 months, but not always for the same principal amount. I have added funds a couple of times.

Your RAR seems a bit low but it's reflective of your risk grade (A) - here's mine.

Only invested $1k and have been pulling it out as unless I got big it's not worth the hassle. The biggest issues I have are:

- The constant rewrites means I have to check on a regular basis and reinvest my cash available

- Liquidity - I can't cash in the investment quickly (even at a loss)

- Couldn't find enough borrowers that met my criteria

I've been playing around with matched betting lately. Despite what you read on the net, there are limited opportunities in NZ, there's a lot of work involved, there are still risks (mainly human error), and the returns drop rapidly once you run out of sites to sign up to. But it's fun!

Linuxluver

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#1600368 28-Jul-2016 21:56

tchart:

Linuxluver:

linw:

Interesting info. Thanks for that.

You're welcome. My current goal is to see what I have to invest to get a clear return of $100 / month after fees and taxes and any losses.

But for the moment, I'm just ploughing returns back into new loans. Not quite at the $100 / month clear level yet.

The return is definitely better than a term deposit.....but more risky (in small chunks)...as you'd expect.

If you "plough" the returns back into new loans, does that count as income? Or only when you draw it down into your bank account?

All interest is income as far as I can tell. They charge fees and deduct withholding tax. I invest what's left.....about half. So the actual return after fees and taxes is about 50% of the gross return....and my RAR is just under 12%. So I'm getting almost a 6% net return in the hand. As you can see from my rating profile I tend to be on the conservative side.

The bank will give me 3.?%return...and I have to pay taxes out of that....so this is much better, though no one is winning lotto here.

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I've been on Geekzone over 16 years..... Time flies....

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