Changes in Mogo’s claim composition

13.07.2018

mintosblog

We would like to inform you that Mogo will change the claim composition for its new loans offered on the Mintos marketplace, starting July 16, 2018.

The claim composition of loans offered on the Mintos marketplace can include interest, late payment interest and penalties; with interest being the main source of income for investors. The exact composition is determined by the loan originator, taking into account its preferences and the underlying loan agreement.

Starting from July 16, 2018, the following changes will be made in the claim composition of the investments offered to Mintos investors:

Penalty interest for Mogo loans originated in Bulgaria will change from 0.027% to 0.01% per day;

Penalty interest for Mogo loans originated in Latvia will change from 0.5% to 0.01% per day;

Penalty interest for Mogo loans originated in Lithuania will change from 0.05% to 0.01% per day;

Penalty interest for Mogo loans originated in Poland will change from 0.038% to 0.01% per day;

Penalty interest for Mogo loans originated in Romania will change from 0.108% to 0.01% per day.

This will not affect the loans listed on the platform before July 16, 2018, and will also not have any influence on prior investments made on Mintos.

The aforementioned change will have a marginal effect on the total return on investment for Mintos investors. The full details and claim composition of each investment are provided in the assignment agreement of each loan in the “My Investments Section”.

You can also find more detailed information on the loan originator section on our website here.

EXAMPLE:

An investor invests EUR 25 in a loan Mogo has originated from Romania. The total loan is EUR 4 000 and it will be repaid in 25 instalments. If, for example, the borrower is 20 days late on the first instalment, Mogo will charge the late payment fee to the borrower. The total net interest and assigned late payment fee for this single instalment would change from EUR 0.2344 previously to EUR 0.2107 after the change in the late payment fee.

When looking at the overall impact of the reduction of the assigned late payment fee on the total return of the investor’s portfolio, it will have a marginal effect. This is because the late payment fees are calculated only for cases when the loan is actually late. This is in contrast to the regular interest that is calculated for all loans as this is only based on the delayed instalment amount, not on the total outstanding loan principal.  

 

LoanEUR 4000
Instalment months25
Interest to investors per annum10%

 

    Instalment late 20 days
LoanMonthly Principal repayment Monthly Interest repaymentOld penalty assigned (0.108% per day)New penalty assigned (0.01% per day)
Full principalEUR
4000
EUR
160
EUR
33.3333
EUR
4.1760
EUR
0.3867
Investor shareEUR
25
EUR
1
EUR
0.2083
EUR
0.0261
EUR
0.0024

 

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