Peer to Peer lending in NZ

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12 posts

Geek

#1758097 7-Apr-2017 12:50

kebhow: I decided to put in $ 500 on Harmoney after browsing the site and read all the experiences in this thread so far. So far have invested 4 x $ 25 in grade B and C loans.

My one question is, if I put $ 25 on a 36 months loan, provided it's not rewritten, will I get repaid the principal of $ 25/36 every month (plus interest less fees and tax) ?

That's correct

BRad1984

1 post

Wannabe Geek

#1767538 19-Apr-2017 19:44

Hello everyone.

Regarding someone defaulting on their repayments and the lender not receiving the remainder of the moneys owed.

Being a lender, can one claim this as a loss, and get a tax refund on tax paid on the interest from the loan that defaulted?

Or is this just wishful thinking

mattwnz

16857 posts

Uber Geek

#1768180 21-Apr-2017 01:52

Interesting thread, and some good tips. I am not sure if it is covered here, but is there anyway to cash out quickly if you had to? It is just that some of the loans are for quite a long period. It appears that borrowers can repay the loan back early, and loans can get rewritten which also effectively also appears to pay you back early. But can you not sell the loan to someone else to another lender to take on? eg Some form of secondary market. If Harmoney doesn't do this, do any of the others?

The other thing I have noticed is that there is a lack of borrowers, and the loans I have seen when I have checked it are all C grade and below, for things such as holidays. I am guessing that the auto-lend feature means that many loans are being fulfilled as soon as they appear. There don't seem to be a large number of loans being given out from the stats.

ANglEAUT

1238 posts

Uber Geek

Trusted

#1768181 21-Apr-2017 02:04

@mattwnz: ... I am guessing that the auto-lend feature means that many loans are being fulfilled as soon as they appear. ...

Lately, that is the only way that I have found loans on Harmoney.

https://www.harmoney.co.nz/investors/marketplace-statistics lists genric stats for Harmoney and has one graph for "auto-lend volume", but it does not have a graph for auto-lends vs. manual selection of loans. Then again, I'm guessing we are all going to let the machines do this one particular job for us. ;-)

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

cristiancr

12 posts

Geek

#1768320 21-Apr-2017 10:03

mattwnz:

Interesting thread, and some good tips. I am not sure if it is covered here, but is there anyway to cash out quickly if you had to? It is just that some of the loans are for quite a long period. It appears that borrowers can repay the loan back early, and loans can get rewritten which also effectively also appears to pay you back early. But can you not sell the loan to someone else to another lender to take on? eg Some form of secondary market. If Harmoney doesn't do this, do any of the others?

Squirrel Money has a secondary market which allows you to sell an existing investment on the marketplace. Read about it at https://www.squirrelmoney.co.nz/blog/technology/the-secondary-market-is-now-live/

sonyxperiageek

2761 posts

Uber Geek

Trusted

#1769905 24-Apr-2017 16:51

How's everybody's investments going in Harmoney? I put in $500 and after two months, it's gotten me around $5 gross interest, with less than $2 of fees, bringing that to a grand net interest of around $3 so far. Haven't had any late payments so far and I've invested in A B and C grade loans. All of my funds are being loaned out through Auto Lend as there is just not enough borrowers like someone said unless you get lucky and check at just the right time, or it's an E grade loan etc.

So far I think it's going good, I've also not invested many into the 60 month loans, just the 36 month loans which is set automatically in my Auto Lend. The interest rates are definitely better than the bank.

Just a question: Does the personal RAR only show up after the year has ended? I'm guessing so as it is realised Annual return rate.

Sony

mattwnz

16857 posts

Uber Geek

#1769918 24-Apr-2017 17:21

sonyxperiageek:

How's everybody's investments going in Harmoney? I put in $500 and after two months, it's gotten me around $5 gross interest, with less than $2 of fees, bringing that to a grand net interest of around $3 so far. Haven't had any late payments so far and I've invested in A B and C grade loans. All of my funds are being loaned out through Auto Lend as there is just not enough borrowers like someone said unless you get lucky and check at just the right time, or it's an E grade loan etc.

So far I think it's going good, I've also not invested many into the 60 month loans, just the 36 month loans which is set automatically in my Auto Lend. The interest rates are definitely better than the bank.

Just a question: Does the personal RAR only show up after the year has ended? I'm guessing so as it is realised Annual return rate.

I am wondering if it is worth the hassle and risk, for what look like quite small returns. If you had put that same money into a term deposit at 4% for 36 months, you would have made a gross interest of $3.34 before tax after two months, and that is usually compounding interest. So your returns look quite low considering the type of lending it is. I guess you have to start small though.

Sam91

612 posts

Ultimate Geek

#1769921 24-Apr-2017 17:24

sonyxperiageek:

Just a question: Does the personal RAR only show up after the year has ended? I'm guessing so as it is realised Annual return rate.

When I first signed up I was wondering when my RAR would show up as well. The response I received from Harmoney is below.

Harmoney:

The RAR figure for accounts update 90 days from when the first investments were made. This is done on the 23rd of each month thereafter.

sonyxperiageek

2761 posts

Uber Geek

Trusted

#1769925 24-Apr-2017 17:41

mattwnz:

sonyxperiageek:

How's everybody's investments going in Harmoney? I put in $500 and after two months, it's gotten me around $5 gross interest, with less than $2 of fees, bringing that to a grand net interest of around $3 so far. Haven't had any late payments so far and I've invested in A B and C grade loans. All of my funds are being loaned out through Auto Lend as there is just not enough borrowers like someone said unless you get lucky and check at just the right time, or it's an E grade loan etc.

So far I think it's going good, I've also not invested many into the 60 month loans, just the 36 month loans which is set automatically in my Auto Lend. The interest rates are definitely better than the bank.

Just a question: Does the personal RAR only show up after the year has ended? I'm guessing so as it is realised Annual return rate.

I am wondering if it is worth the hassle and risk, for what look like quite small returns. If you had put that same money into a term deposit at 4% for 36 months, you would have made a gross interest of $3.34 before tax after two months, and that is usually compounding interest. So your returns look quite low considering the type of lending it is. I guess you have to start small though.

The returns are a bit small now because it probably doesn't even come to two months on all my loans. In other words, I only put in one or two notes in per loan ($25 for a note) and so that $500 wasn't lended immediately to loans on the first day, it gradually lended out my money every day. Judging by the interest rate throughout my loans, I should be getting an average of around 10-12%, so still better than banks' term deposits.

Sony

KiwiSurfer

687 posts

Ultimate Geek

Lifetime subscriber

#1769984 24-Apr-2017 19:20

cr250bromo:

I tried for a loan on Harmoney, my credit score (on credit simple) is 789 and no judgements against my name when checking with all 3 agencies. However, the quoted interest rate was around 33% - I could draw the money out on a credit card as a cash advance much cheaper than that. Also my credit history shows I applied for the loan even though I never took it up. Z---- would not use again.

My understanding is that your credit history will include all applications including the unsuccessful ones.

ANglEAUT

1238 posts

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Trusted

#1770026 24-Apr-2017 22:08

sonyxperiageek: ... Judging by the interest rate throughout my loans, I should be getting an average of around 10-12%, so still better than banks' term deposits.

That's pretty much inline with the RAR values for the platform as per their stats page. This still sounds better than any bank rat that I've seen advertised.

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

sonyxperiageek

2761 posts

Uber Geek

Trusted

#1770050 25-Apr-2017 00:42

IcI:

sonyxperiageek: ... Judging by the interest rate throughout my loans, I should be getting an average of around 10-12%, so still better than banks' term deposits.

That's pretty much inline with the RAR values for the platform as per their stats page. This still sounds better than any bank rat that I've seen advertised.

Yep, I won't know officially until the 90 days have come but definitely better than the bank.

Sony

mattrix

193 posts

Master Geek
Inactive user

#1774072 2-May-2017 10:23

I use auto-lend to just do 'A' rated loans only.
I then have my own auto-lend that buys loans depending on their grade and my overall $$ % invested in that grade.

I have it currently set-to:

'A' : 100% (always buy)
'B' : 30%
'C,D' : 30%
'E,F' : 10%

My current RAR is 11.68% with 15K invested.

Been using it for about a year.
Slowly putting more $$ into it each pay (so not touching my "main savings").
I only invest $25 in each loan.

I used to have more complicated rules but found just spreading the risk over the grades seems to work best for me.

mattrix

193 posts

Master Geek
Inactive user

#1774085 2-May-2017 10:29

I also noticed that the more $$$ you have invested, the less likely you are to get auto-lend loans.

I also notice that the marketplace only shows some loans available.
They also hide loans, and then show them again at different times.

I'm not sure why they do this.
Maybe to give everyone a better chance of getting a loan?
Or, they are trying to push "crappier" loans at higher view times (oh, only C loans - might as well buy that while I'm here).

sonyxperiageek

2761 posts

Uber Geek

Trusted

#1774169 2-May-2017 11:55

mattrix:

I use auto-lend to just do 'A' rated loans only.
I then have my own auto-lend that buys loans depending on their grade and my overall $$ % invested in that grade.

I have it currently set-to:

'A' : 100% (always buy)
'B' : 30%
'C,D' : 30%
'E,F' : 10%

My current RAR is 11.68% with 15K invested.

Been using it for about a year.
Slowly putting more $$ into it each pay (so not touching my "main savings").
I only invest $25 in each loan.

I used to have more complicated rules but found just spreading the risk over the grades seems to work best for me.

Have you thought about when you will stop auto lending, so that once your last 3 year or 6 year loan is paid back, you can take out the cash etc.?

And how did you figure out that the more money you invest the less likely it auto-lends for you? I have noticed that there are lesser and lesser loans available out there, so people not borrowing as much? Not too sure.

Sony

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