Self select lending

Self-select lending allows to select loans yourself, you choose the loans to invest in, the amounts to lend and the interest rates. The loans are listed in the market, split into new loan applications (primary market) and resale loans (secondary market).

New loans

New loan applications are listed in the primary market. Each loan listing includes loan and borrower information to help investors make lending decisions.

Lending
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To start lending you need to submit and lending bid; the bid includes the amount you want to lend and the interest rate you are offering.

Matching process

Bids are sorted based on the interest rates as an auction - the best bids with the lowest lending interest are matched to the borrower and presented into a loan offer. If the borrower accepts the loan offer, money is transferred from the investors to the borrower.

If your bid is accepted, ensure that at the time your bid is accepted you have sufficient funds in your cash account to match your bid. Once money is tranferred from your account to the borrower, you will now own part of the loan. You will receive a future repayments and earn interest from the loan. You may also be able able to sell your loan part – see Selling a loan on the Secondary market.

If your bid is not accepted, your bid will be closed. You can keep track of the status of your bids on your account page.

How much should I bid?
As an investor you want the highest possible lending rate on a loan. However, as a competitve auction only the best lowest rate are offered to the borrower. You need to balance between bidding low enough to be accepted by the borrower and high enough to give you sufficient return you require on your investment.

Creditmonga aims to provide the information to aid your lending decisions. Review this information before deciding to trade a loan. Cut off interet rate Creditmonga - info on similar loans

Resale loans

You can buy and sell loans on the resale market. Trading loans on the resale market allows you to:
• cash in on your loans before the loan term,
• buy loans to build your portfolio quicker.
• rebalance and diversify your portfolio quicker
Buying a loan may be quicker than lending new loan applications. Once the buyer and seller are matched, the sale is finalised and settled immediately. For new lending, settlement only occurs once a borrower accepts a loan offer.

Trading loans
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Both buyers and sellers can initiate a trade. A buyer can place a bid to buy a loan showing the amount and interest rate the buyer is looking for. A seller can also place a sell offer showing the amount on sale and the interest rate on offer.

Matching process
The buyers and sellers are matched based on the interest rate. The buyer’s bid rate is the interest rate the buyer is seeking from the loan. The seller’s offer rate is the interest rate seller is offering to a buyer. A buyer is matched to highest offers rate higher than the buyer's bid rate. A seller is matched to the lowest bids lower than seller's offer - will be matched to the lowest rate. The transaction will take place at the middle between the seller’s offer rate and the buyer’s bid rate.

Buying a loan
When you submit a bid to buy, you will specify Bid Amount: the loan balance you want to buy.
Bid Rate: the interest you want to received from the loan. This is not necessarily the interest that the borrower is paying on the loan. [see for more detail]
. On submitting a bid to buy, we search the market for matching sellers. If there are no matching sellers, your bid is kept open for any future matching sellers.

How much should I bid?
As an investor you want the highest possible lending rate on a loan. However, as a competitive auction, the sellers will be looking for the lowest rates and you may be competing with other bids. You will therefore need to balance between bidding low enough to be considered by the seller and high enough to give you a sufficient return on your investment.

Selling a loan
When you submit a sell offer, you will specify Offer Amount: the outstanding loan balance you want to sell.
Offer Rate: the interest will offer the buyer. This is normally the interest you receive on the loan, however you can set this to lower or if set to higher. [see for more detail] can sell a loan submitting a sale offer. You can sell any loan you hold subject to some restrictions on late or defaulted loans [see details]. On submitting a sale offer, we automatically search the market for matching buyers. If there are no matching buyers, your offer will be placed on the market and available for all investors to see.

How much should I sell
The rate you offer directly impacts the amount you will receive on selling your loan. The lower your offer the higher the amount you receive. As a seller you want to offer the lowest possible rate. However, buyers are looking for the highest offers rates so you will be competing with other sellers. You will therefore need to balance between offering high enough to be considered by buyers and low enough to give you a sufficient amount for your loan.

You may also consider:
• How quickly you want to sell the loan. You may offer a higher rate to achieve a quicker sale.
• How much other sellers are offering for similar loans.
• Underlying borrower rate – this is the rate the borrower is paying on the loan. This rate is used as a guide and buyers are unlikely to accept rates that are significantly lower than what the borrower is paying.

Creditmonga provides information on loans on the market to help you form a balanced view of loans. Use this information to help with your trading decisions. The information includes:
Loans details – terms and conditions,
Borrower detail –
Underlying borrower rate
Similar loans
Investors – bids
History trading and transactions

See also:

Managed Investing.
Leave all the work to us. We invest your money for you, selecting the right loans for you. Your money is invested together with other investors and invested in a wide range of loans meaning you benefit from diversification. Choose a managed product that suites you.

Managed lending >>

Autolend
Alternatively you could invest automatically in loans that meet you criteria using our AutoBid process – see the section for more details.

AutoBid >>