Meaning of most used
words and acronyms in p2p
Principal:
The capital borrowed in the investment.
Withdraw:
Withdraw money from the account, usually through bank transfert.
LTV o Loan to value ratio:
Loan to value ratio is, as the name suggests, the ratio between the value of the mortgaged good and the loan value. I wrote a specific post about this important ratio for loans evaluation.
Secondary market:
The secondary market is a virtual space where it is possible to buy and sell loans. Usually “good loans” are sold with a premium percentage on the original price, on the other hand “bad loans” are sold with a discount. Usually good loans are long, with high return percentage and without payment delay in the preceeding payments, bad loans the others 😉
Interests:
The interests that comes from the loan
Lenders:
Companies that deliver the loan, when the platform contains different loan agencies.
Grace period:
It is the period of time (usually a few days) when the loan payment is allowed to be late without penalty for the borrower. It is used to cover for possible delays in bank transfers, national holidays etc.
Deposit:
Add funds to your account, usually with a bank transfert.
Payback guarantee:
By payback guarantee we mean that service that refund you of your missing money in case of payments that are late for more than a variable number of days depending from the platform you are on (usually from 3 to 90).
The platform usually reimburses both missing capital and accurred interest in the period it was late.
Late fees:
Percentage asked to the borrower in case he/she is being late after the grace period. Every platform has its own rules and fee percentages on this.
If you were looking up for a term you did not find, feel free to suggest it in the comment section and I’ll be happy to add it asap.