Get Some
General => General Chat => Topic started by: toofast on January 31, 2015, 12:11:36 pm
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Came across this after Trademe invested some money into it, and sent me a email about it. Pretty much a peer to peer lending platform for NZ.
Looking at their interest rates (https://www.harmoney.com/how-it-works/interest-rates-fees (https://www.harmoney.com/how-it-works/interest-rates-fees)) it seems like it gives a reasonably decent returns, but its a bit hard to gauge the true meaning of this risk gauge system. Another P2P site seems to have a similar system, but said its down to a proprietary model.
Anyone invested any money with these guys?
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It's interesting.
Start of at 10%, goes up to 40% if they deem you to be a big risk.
But
What are the risks? *
While Harmoney has taken significant measures to minimise risks during the loan application and approval process, they do exist and should be considered. We recommend consulting a financial advisor before making any investment decisions.
The primary risk inherent in peer to peer lending is that investors may not receive all of their monthly principal and interest payments due to loan defaults.
It appears that as an investor, if someone else defaults on their loan, you'll get screwed, and as Harmony are just the platform, it's not their problem.
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I assume that is part of the risk, and part of the hit on your ROR. An A grade loan goes from 0.08% to 0.27% default rate, so I imagine if you diversify your loans well (say across 50 loans) you would be safe.. They also seem to have third party collection agencies, and they offer reduced interest on secured loans, so there is a little bit of backing before someone can bail out on the loan.
My biggest concern is
Harmoney does not attempt to certify the ability of a potential Borrower to service any specific loans. However, Harmoney does make an assessment of the affordability of a loan for a potential Borrower based on the verified financial data provided by the potential Borrower, including income, expenses and debt servicing information.
So I guess you could get screwed over by someone who on paper looks safe, but can't correctly manage the repayment on the loan.
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It's interesting.
Start of at 10%, goes up to 40% if they deem you to be a big risk.
This is great! I can use their chart to grade how well or how poorly someone performs at a game and use it as a standard method to determine game difficulty
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It appears that as an investor, if someone else defaults on their loan, you'll get screwed, and as Harmony are just the platform, it's not their problem.
As an investor you cover yourself on this regard by fractionilsing your investments, you invest $500 (minimum) over multiple loans and whilst you are still likely to come across someone defaulting, your entire investment isn't screwed over but only a margin.
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I ended up making an account to have a look. The information they provide you isn't too bad:
(http://i.imgur.com/hmMipJo.png)
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A torrent tracker for money?
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Would be worth looking into.