I noticed today that MoneyThing had introduced premiums and discounts onto the secondary market. I had one loan that I had been trying to sell for a good few months and wanted to try it out.
My first questions were:
- How does it work?
- What is the maximum discount?
- When I sell, does the buyer pay accrued interest?
How does it work?
Here is how it looks for potential buyers:
For buyers, it shows all of the current offers, starting with the biggest discount at the top. To sell, I go to the ‘my loans’ then just click the ‘sell’ button from the table:
This opens up a box to set the price and discount/ premium:
What is the maximum discount?
When you click the ‘Offer price: at par’ drop-down it lets you set a discount right down to 75% of the original price:
Does it work?
I set the sale price to 94.5% – a 5.5% discount. It was 0.5% cheaper than the largest discount at the time.
This ended up selling within 2 or 3 minutes. It had previously been on the market for many months, maybe even a year. This is a great benefit to people who need to access their money early for some reason, and are willing to take a cut to their capital repayment for the privilege.
When I sell, does the buyer pay accrued interest?
I sold £150 at 94.5%, so would have expected £141.75 for the capital alone. If it was with accrued interest for the last 10 days, I would expect a little over £142
In reality I received 141.76 over a couple of sales, so it was probably just a rounding error of the capital alone. No accrued interest!