Clicky

  • Welcome to P2P Lending / NFT Lending Forum.
 

ETH.LOAN

News:

This was the original Lend Academy peer-to-peer lending forum, since forensically restored by deBanked and now reintroduced to eth.loan.

To restore access to your user account, email [email protected]. We apologize for errors you may experience during the recovery.

Main Menu
NEW LOANS:   | 804.eth 2.500 Ξ | remoraid.eth 0.299 Ξ | remoraid.eth 0.299 Ξ | ALL

Why not buy notes with a premium???

Started by Peter, October 11, 2017, 11:00:00 PM

Previous topic - Next topic

jcurry6664

I've been investing with LC for a while, and just recently started to think about trading notes on Folio.

I was thinking of buying 60 month notes with 12 - 18 payments left, filtering them to ensure they have never been late and have not dropped credit rate.  My thought is that if they haven't defaulted in the first 4 years and their credit is stable, there is a high probably they will pay off the loan.

The one question I have is why do I see so much advice to not pay a premium.  My thoughts are the premium gets rolled into the yield to maturity, so if I can get a higher yield, I should still be ahead.  What am I missing?


TravelingPennies

Yes, that makes sense.  I wonder how often that happens deep into the loan. Thanks.


Treerachat


muflafler

It's true you can lose the premium paid if a note pays off early, but is it more important to try to minimize a 3% loss from a prepayment, or a 100% loss from a default?


NEW LOANS:   | 804.eth 2.500 Ξ | remoraid.eth 0.299 Ξ | remoraid.eth 0.299 Ξ | ALL