Why is there suddenly a new investment in my investments list, dated back to 11.11.2016, although it wasn't there on the 11.11.2016 or the days after, for that matter, and with no score (or score of “None” in the details)??

This investment is the following:
L16387733 11.11.2016 Olenka 6 months 25 %

Besides this looking very shady - an investment agreement showing up all of a sudden in my list but dating a few days back - it is also in violation of the investment terms, since I don't allow investment nor define loan interest for requests with no score.

Hi,

I also have a loan on the 11th without a score. My investment in this loan was 3,80. The duration is 3 years while I am not investing in longer term loans.

There is also a contract for this loan..

Edit: looking through all my investments this turns out to be happening for almost a year (January 2016). Some of the loans involved do not match my investment terms.

Regards,
Patrick

In terms of investments with no score, this is the first time it happened to me.

Mine is 10€ for 6 months, but regardless… why no score? And why did it suddenly appear in the middle of my list but dated back 4 days ago when 2 days ago it wasn't even there for sure?

I check my contracts and this investment is dated 11.11.2016 in my investments list, but shows in my contracts list dated 14.11.2016!! Wait! What?

Also, the interest rate in the investments list (as quoted in the first post) says 25%, but when I open the contract it says 20%… And the thing is, I don't even define loan interests ANYWHERE, I repeat ANYWHERE, with 25% OR 20% for 6 months loans!!!

This is just outrageous!

I expect an explanation from Omaraha soon and I want this investment voided immediately and my money returned to my virtual balance account!

I found similar contract once and OR explanation was, that these are refinanced loans.

Investments without a score are refinanced loans. It means you already had investment for the same borrower and this loan was refinanced. You can find original investment if you check your finished investments, filter by borrowers name.
To make refinancing happen borrower had to pay all in debt interest and late payment penalties. Unpaid principal was moved to the new scoreless investment and interest did not change.

I already saw there was a first loan to the same borrower issued back on 28.06.2016.

I understand that you don't include the score when it's a refinanced loan, although by principle this should be done, specially when a user has issues with payments related to a previous loan, his score should be reevaluated and stated in the new loan agreement for risk assessment and management.

In order to object further, I will state the 2 loans in question, namely:

# Loan A (first loan)
Score: 760
Period: 1 month
Date: 28.06.2016
Loan Interest: 20.00% (Total 25.00%)

# Loan B (new loan, refinance)
Score: None
Period: 6 months
Date: 11.11.2016 (Contract 14.11.2016)
Loan Interest: 20.00% (Total 25.00%)

Regarding these loans, there are 3 things that are wrong and I cannot accept:

1) Loan and Contract dates

You approve and issue a new loan on 11.11.2016, but only 3 days later you have the actual contracts with the lenders.

For sake of trust and process transparency, you shouldn't issue a new loan, dating a few days or weeks or months back even. If you find and reserve the funds to refinance a loan on the 14.11.2016, this loan should be issued only from that day onwards and not the other way around. Also things could change between the 2 dates (like interest rates or available funds for a specific market) and then it's hard to determine what should be considered and when.

2) Different Loan periods with same interest rates

The first loan to this borrower “Loan A” was for a period of 1 month, the second loan “Loan B” is for a period of 6 months and still you assume the same interest rates for 2 total different periods.

The interest rates I define for “Short-term loan up to 3 months” are different from the interest rates I define for “6 months” loans. You cannot assume that the risk is the same and if you change the period, the interest rates should apply according to the investment terms for different periods. Otherwise this could create a loophole, where a borrower asks for a first loan for a shorter period (where the interest rates are lower) and then asks to refinance and pay on a longer period but still with the lower interest rates.

For example currently I define a loan interest of 20.80% (total 26%) for a 760 score short term loan (1 month) but for a period of 6 months the loan interest for the same score is 25.60% (total 32%).

3) New loan issued without current defined interest rates

The new refinanced loan assumes the same interest rates I defined 4,5 months ago, namely 20% (total 25%) although now (4,5 months later) the loan interest I would accept for this specific refinanced loan are 25.6% (total 32%).

You cannot just assume the interest rates don't change throughout time. Imagine a user asking for a 1 year loan and 9 months later the borrowers has issues with payments and gets refinanced and you just give him the same interest rates today the same as 9 months ago although the market interest rate has increased 10% or 20% for example! It's insane!

—

For all these reasons I do not consider this loan agreement valid and deem it in violation of my investment terms. I would consent to refinance this borrower, if the current interest rates defined were applied (25.60%, total 32%) according to the new define period of 6 months (and not 1 month) for at least score of 760 (although given the payment issues, the score should be reassessed which would make it even lower).

If this is not rectified I have to request this contract (L16387733) be voided immediately and the funds returned to my virtual balance, also immediately.

Firstly, I believe refinancing is addressed in general terms which you have accepted and secondly, your other option right before the refinancing is that the loan goes bust and you loose the accrued interest and currently get back approximately 80% of principal. Refinancing is a better option in my mind although it doesnt guarantee proper payments in the future, it will guarantee the accrued interest, which together with buyback pretty much will currently guarantee (at least in Estonia) that you will not lose anything on the loan.

I do not oppose to refinancing, but that's why I wrote:

falonso
I would consent to refinance this borrower, if the current interest rates defined were applied (25.60%, total 32%) according to the new define period of 6 months (and not 1 month) for at least score of 760 (although given the payment issues, the score should be reassessed which would make it even lower).

So that's not the issue. The issue I highlighted in the 3 topics in my previous post:
- Loan and Contract dates
- Different Loan periods with same interest rates
- New loan issued without current defined interest rates

falonso
So that's not the issue. The issue I highlighted in the 3 topics in my previous post:
- Loan and Contract dates
- Different Loan periods with same interest rates
- New loan issued without current defined interest rates

If borrower signs refinancing then he/she has 72 hours to pay in debt interest and late payment penalties. If money arrives then contract will be activated. That's why refinancing contract can appear up to 3 days later.
Refinancing is part of debt handling process and is only offered to borrowers who have previously paid, but now find them in tough situation. Each refinancing request is analyzed thoroughly and situation where borrower uses this to get better interest for longer period can't occur.
We undestand that some investors expect higher interest if contract is made longer, but refinancing main goal is to help borrower start paying again by decreasing monthly payment and we think increasing interest is not very helpful.
Contract is made only slightly longer, we are not going to make 6 month contract to 60 months and only about 2-3 refinancing contracts are issued per month.
Omaraha will continue offering refinancing and we hope our investors understand and trust our decisions.

Ok, thanks for the explanation. For me it is all clear now.

The only downside for me is that I am only participating in rather short term loans (1 year) to be able to withdraw all funds in max 1 year time. But this isn't really possible for a few refinanced loans. If I stop investing today then it will take me 3 years to get all funds back. This is a little unexpected for me. Luckily the amount of money involved is really small so if there are not too many of these kind of loans it is ok for me.