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Eleving/Mogo, Pending Payments

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  • Angus

    Hi Peter,

    Im sure mintos will reply later but for now:

    - If the loan has been signalled by the LO as "Finished: Bought back" but the payment hasnt yet reached Mintos it will show up in pending payments. ´The LO then has up top 7 days to pay the amount before the accrual of late payment interest. 

    - As for why the buyback - Could be any number of reasons. I will just say that quite often (some LOs more than others) when rates go down LOs will buy back higher rate loans and issue new and different loans at the lower rates. Makes good business sense for the LO. here I have to single out Everest as an LO that issued 15% loans in May last year and instead of buying back honoured the "high" rate until the end of each loan. Other LOs once COVID market rate jump had finished bought back the high interest loans.

    Cheers,

     

    Angus 

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  • Angus

    Hi again Peter,

    Its not really a case of Short term or Long term loans. Short term loans of 30 days or less can become 8 months long and long term loans can be bought back as soon as rates drop / first repayment is missed / new funding sources (ie a bond) are available. 

    All this is very necessary to have in mind if you are paying a premium on the secondary market. 

    To give some examples from my portfolio:

    - I have Creditstar 13% loans from my first day here that after two years are at 50% of their value (Creditstar Estomia has an accelerated principal repayment in the early years) but pay steadily each month

    - I have Expresscredit loans from day 1 at 12-14%, a variety, that have only seen 20% of their principal repaid due to the long 60mth repayment terms. They generate interest withoiut really affecting the principal.

    - Mogo / Eleving - Ive some of these loans still (its not one of my favourites due no interest on delayed payments) and most were adquired 1 year ago during the COVID liquidity squeeze with significant discounts. 12% with -5% discounts. Of approx 2K invested I have around 300€ left. 

    - Mozipo - I took a big chunk of 14% loans during Covid, today theyve all been bought back. Some 12% loans left but nothing over 12.1%. Thankfully I have a large enough portfolio that I saw the pattern on day one of the buybacks and shifted the rest of the 13%+ on the secondary market at +1.5%... 

    For your particular situation. If you took high interest loans, without paying a premium, ie Primary market, then you´ve had good interest rates for a few months / a year. Short term loans will track the market and every month you will only be able to re invest where the market is... If its gone down maybe you are trading 13% short term after 30 days for 11% short term.... In this case perhaps 6 mths at 12% in a long term loan that gets "bought back" is better. Of course if the ST market goes from 11% to 13% and youve taken long term 12%... Then you´ve missed the occasion. 

    SO....

    Invest at the target rate you are happy with... After a couple of years or more here 12% is a reasonable target. In my case, for example, I balance 14% Creamfinance short term Spain loans with 10% Everest 24mth loans to get my 12% average. 

    Its all subjective and no one knows where the market will go tomorrow.... More investors = more liquidity and lower rates, More LO´s = More supply than demand. 

    If you want a market beating 10% per annum Mintos will give that easily. Me, I invest a little more time and hit 12,5-13% but that is a time vs benefit question and depends on your investment portfolio size.

    Pleased to have been of some assistence and Happy investing!

    Angus

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  • Peter

    Thanks Angus,

    that would explain the "pending payments". Hope the repayment will take place without delay.

    It is not the first time Eleving/Mogo does this trick. The lesson for me is that it does not pay to sign up for longer-term loans. Will stick to short-term only in future.

    Regards,

    Peter

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