What should we do when there is a cash drag?

Emerging popularity and awareness of the p2p sector leads more investors to join. As a result, the demand is increasing and from time to time there are not enough loans available for all of us. What should we do in such a situation? Just relax, breathe and think before you move your funds across Europe. Only because some minor percentage of your funds remains uninvested for some days on your account it’s not the end of the world. First I will show you a simple calculation which should ease your fears, let’s assume you invest with Swaper and/or Robocash: Both platforms currently pay 14%, which means simplified even if 10 percent of your capital would remain on the account for the whole year, you would still yield 12.6 percent. When taking compound interest into account you will be over 13%. Keep in mind that a cash drag mostly is a temporary situation and not sustainable. In the case of robocash I am pretty confident, that the cash drag (which exists for some days) will dissapper once Russian loans will be added. To date it is not clear when this will be the case, but my guesstimation is that this will be imminent. Swaper as well is trying to increase the loan supply and the situation seems to get better from month to month, except for this September.

What if the cash drag remains for an extended period?

Of course then you should do something if the situation persists. There are (still) some lesser-known platforms where you can find interesting offers. I will shortly introduce some to you:

Lenndy with up to 15% and buyback

The loan volume at Lenndy is increasing from month to month and you get secured car loans from 12% (with a duration of 5 months) to 15% (duration of up to 5 years) and many in between for about 13 to 14%. Further there is invoice financing with short durations with yields of 12 to 13 percent (mostly without buyback) and you can invest in business loans with up to 13 percent. Check out if there is a buyback offered, they are marked with a shield sign.

Of course there are reasons why the platform is not as frequented as others: There is no auto invest feature at the moment. New loans are published by emails which is annoying as you get many emails daily. Further you need a paysera account for the time being, but in the next months SEPA should be introduced.

Grupeer offers short term loans with up to 15 percent and buyback

Some weeks ago Grupeer introduced a new product. Since then these type of loans were added several times each week on the platform.You need to get them manually as there is no autoinvest feature. But you should succeed as most of the time some loans are available. The loan volume will be increased on a weekly basis. Even if there are no 2 to 3 month loans with 15 percent yield there are some loans with a duration of up to 6 months and yields of 14 percent. Follow me to Grupeer.

DoFinance offers 14% with buyback and 1% Cashback for new investors

Read this article before you invest, as the functionality of DoFinance is a little bit special. If you decide to invest there, use this link to register to get 1% cashback on your deposits of the first 30 days. If you deposit 25k and more you will automatically get 14% yields, otherwise 12%. There are plenty of loans available.

Mintos offerst the biggest selection

At the moment there are not a lot of 30 day payday loans, but this changes quickly at Mintos. But you get to choose from the biggest variety of loan types. You should find something investible with durations below 2 years easily. If you take into account that a lot of loans are bought back early, the duration of your portfolio decreases automatically. Use this link to get 1 percent cashback on your investments of the first 3 months.

Lenndy with new desing and some changes

Last weekend Lenndy’s revised website went live. Further to a new design (which I like and is better to read then before) some process and handling changes were implemented

What’s new

1) The sites performance and speed was increased
2) Interest starts to accrue after bid, not on completion of the loan
3) Now we can filter the marketplace and our portfolio
4) A lean account statement is available
5) More stats are available

There is more to come

SEPA payments will be live from mid October, so we can send money directly to Lenndy. We can save us the detour through paysera. If we are lucky we should get an autoinvest functionality until the end of 2017. If they then can manage to quit these daily emails for new projects, then I will be really happy.

Credital Verslui, a new loan originator

Simultaneously with the design update a new loan originator “Credital Verslui” has been introduced. Verslui offers business loans to lithunian businesses, which are operative for at least two years. Credital Verslui has been operating since 2016 and has offered more then 600 loans so far. Lenndy will only place loans on the marketplace which already paid at least two installements punctually. There are other due dilligence measures and we receive personal guarantees from Credital Verslui’s owners. What those guarantees are worth we will be finding out only in case where we need to rely on them. What I really like is the fact that Lenndy is in full control of the originators paysera account, where the repayments from the borrowers will be added directly from the borrowers. There is explicitly no buyback guarantee involved with these loans. Buyback is offered at the moment for some invoice financing and car loans (not originated from Credital Verslui, you can see if there is a buyback guarantee when you check out the project and click on collateral).

This is it for the moment, as anytime if there are some questions, just post them here.

Some news from p2p land

Today I have only some news and updates for you.

Swaper

With Swaper it always looks like there are no loans available. That’s not entirely true as new loans are added everday, but they get sucked in by the autoinvests. My money is always nearly completely invested. Within 4 to 6 weeks loans from a new country should be added to the platform and will increase the supply. I am not allowed to say which one at the moment. It won’t be Denmark, as they are looking for  staff there first. Denmark will follow after next. Visit Swaper.

Saving Stream will be named Lendy 

As I mentioned before Lendy ltd is the operator of Saving Stream. Now the platform will adopt the same name. Rumours say that the FCA made this one of some mandatory conditions for Saving Stream to obtain fully authorised status. There are no other changes at the moment, but maybe we will be confused by Lendy and Lenndy, the lithunian platform 😉

Twino to offer payment guarantee loans

Twino has announced to offer loans with a payment guarantee in the near future, an invention by Twino. These loans will always pay on due date, this will give some planning security to investors. That’s nice, but these loans are no invention by Twino. Omaraha uses this procedure on their secured loans and Lenndy on their buyback loans. Maybe Twino did not know that, or didn’t look so hard 😉

Estateguru is getting on my nerves, but the supply increases

Not really official news, but I have to get rid off it 😉 There is room for improvement for Estateguru in terms of investor communication. It takes days to get answers (if any) to emails and it looks like that late payers are handled with kid gloves . There are borrowers that pay their interest installment always late and it seems like as Estateguru is tolerating that. In the end I have to admit, that there is no default to date and all borrowers have paid up. As investor I cannot complain with the supply of new loans in the last 2 weeks. Nearly daily new loans are coming in and sometimes more then one per day. This is fantastic and hopefully sustainable.

Lenndy with some new features

Some weeks ago I introduced Lenndy to you. In the meantime some new features were implemented, which I would like to bring closer to you.

A new Loan Originator

Simplefin is a new and dew-fresh Loan Originator from Lithunia, which recently finances it’s projects through Lenndy . There were six invoices (some smaller) funded very quickly. According to Lenny new originators will follow as well.

No secondary market, but the possibility to sell a loan

Lenndy has no secondary market available yet, but allows investors to sell a loan if they want to liquidate. Please be remindet that this is not cheap, it costs 5 percent of the loan’s residual value. What is interesting is: the loans are bought by institutional investors with a 5 percent disount. If you are interested in buying such loans with discount, you need to get in contact with Lenndy by email. You will then get such offers per email. You can see the sell button in your portfolio view.

Lenndy Club with additional one percent of interest

At the Lenndy front page you see that there is a Lenndy Club. If you would like to join the club, you need to contact Lenndy directly. There are some conditions. Lenndy sends offers of new loans to you which you need to close with your bid if you would like to receive the bonus interest. Example: 7k loan, which is already funded with 1k, to get the additional interest, you need to bid 6k to completely fund the loan. For me personally this is too much, but this has to decide every investor for himself.

A look at actual figures

By comparison to my post from 12th February, Lenndy has managed to grow nicely during the last month as you can see in the following picture:

290 new Investors, 500k more volume and 68 new projects. Not a bad result for this young platform.  At the moment some projects on Lenndy need funding. One of them is a 165k mortgage loan with a duration of 12 months and 12 percent interest rate (plus buyback). Follow me to register at Lenndy

 

 

 

 

 

 

Lenndy – my experience and further information

After I published my first article about Lenndy, I was able in the meantime to charge my account with some Euros and invest them my first projects.  Gladly I share my further experiences.

Overview

As I described earlier the identification procedure is outsourced to the payment service provider Paysera. I recommend firstly to open a paysera account (at least level 3) and afterwards to link it with your Lenndy Account. To fund your account klick on your name in the logged in area und you will see “top up account” and klick on it.  Next you will be connected with paysera and can define the amount which you want to pay in to your account. Then you will see the payment details and can create a wirement to paysera in your ebanking. Your money should be in your Lenndy account the next working day the latest (you won’t get notified by email).

What types of loans are available and what about interest rates?

Below diagram shows nicely that there are four loan types available at Lenndy at the moment: Invoice Finaning, Car Loans, Mortgages and Business Loans. The latter did not come to my attention on the platform so far.  The most popular and most available loans seem to be Invoices and secured Car Loans.

Types of loans and functionality of Lenndy

A closer look on the stats shows that Lenndy is a real young platform. There were loans brokered in the amount of approximately 740’000 Euro and 104 projects funded (figure subject to change daily):

Some basic figures

Somewhat astonishing seems the number of 1’115 investors to date, which is rather high in my understanding. Probably most of them just registered and check the platform out and watch from the sidelines.

My first investments

I was able to invest in some of the projects so far. I invested in Invoices to get a feeling about them. With the Invoices I find two things interesting 1) the duration of 10 months and  2) there are monthly interest payments. I haven’t seen that before.

Onward I have invested in secured car loans with buyback. At the moment there are durations from 5 to 60 months available and the interest rates vary from 12 to 14 percent. I don’t dread longer durations as I guess that there will be some defaults and the loans will be bought back before maturity. Buyback will be executed after 90 days of non payment by the borrower, but during this period the monthly installements are repaid by the loan originator on the due date. This is nice, as we for sure know when the cash flows occur. After 90 days the residual of the loan and the accrued interest is bought back by the loan originator.

There are detailled information (especially for the car loans) available for th e projects. You can see a picture of the car and get at detailed description of the borrower and a lot more.

After a project was funded 100 percent, the money will be transferred to the loan originator. You will be notified by email about this event. After the payment to the loan originator your money is earning interest. During bidding no interest is accrued.

Conclusion

Personally I like Lenndy really good to date. Time will tell how the platform developes. I am also eager to see how the default rates from loans without buyback will be. The identification process through paysera is annoying to some extent, but manageable. Furthermore maybe I can use paysera for other purposes as for wirement and foreign exchanges. They offer a cheap visa credit card (45 cent a month only).

 

 

 

 

Lenndy – a new and interesting platform with buyback

Today I am going to introduce Lenndy to you, a lithunian p2p platform which offers buyback on most loans. Lenndy has been developped since spring 2015 and went live in September 2016 with the first loan offer. The process to open an investor account is somewhat different then what we are used to. Therefor I will describe the procedure below a little bit closer.

Identification process through Paysera

The opening of a Lenndy account is quick and easy, but then it is not finished. The Lenndy account needs to be linked with your paysera account as paysera is fullfilling the identification process for Lenndy. Paysera is a currency forwarding and exchange service and to some extent comparable to Currenyfair and Transferwise. You can create the link and the paysera registration directly in your Lenndy account, just hit the activate account button. Or you first create directly a paysera account and link it when it is confirmed. I suggest doing it directly at the paysera website, as my browser hung up itself a few times when I was trying it through my Lenndy account. The login area at Lenndy can be seen on below picture (at that stage you are refered to as anynomous user).

Account view before paysera activation

With a click on the orange activate button you can link your Lenndy account with paysera. I suggest doing that only after you registered directly with paysera. You will need at least a level 3 verified account at paysera in order to activate your Lenndy investor account. Follow this link to create a paysera account and choose in the settings to authenticate a level 3 account. For that you will need to verify your mobile phone number (you will be sent a sms code) and upload an idendification document. This will be photographed out of the browser, you don’t have the possibility to upload something from your personal computer. This step contains also to make a selfie of your face holding the ID document. To finalize you have to fill out a short KYC questionnaire, this takes only a minute or two. It does not matter in which order you perform the steps (see below). You just need to finish them all to get verified.

Steps to Level 3 at paysera

After that paysera verfieds the documents and enables level 3 if everything is okay. Otherwise you will be informed what did not match the criterias. I received the answer that my selfie was not ok, that it is a different person holding my document into the camera. I contacted the support and explained that this is me and they rechecked and gave green light. I uploaded everything in the evening, and in the next morning at 10 o’clock I was able to proceed and link my accounts.

Enough administrative and let’s take a look at buyback

Lots of loans are equipped with buyback (and up to 14% interest). You can see if there is a buyback when you look at the picture on the right side (black Garantija stamp). The buyback works as following: If a monthly installement is not paid on due date by the borrower, the loan originator will pay the same day. The loan originator will pay two monthly installements and after 90 days (given the borrower did not meet his obligations in the meantime) the residual principal plus accrued interest will be bought back. So there is no need to wait 60 days or so as on other platforms to get your loan bought back. I like this way of handling it and you exactly know when you are going to get paid. On the other hand it makes it difficult to impossible to figure out if the borrower paid or the loan originator.

conclusion

My first impression of the platform and the support staff is positive (I will ignore the detour through paysera). The interest rate level is appealing and I like how the buyback is equipped and handled. I will give an update in the coming days as I then already should have made my first investments.

If you have any questions do not hesitate to contact me through posting or search for the contact form in the header.