How to set up Auto-Lend on your Lender account.
Auto-Lend is a new feature for Harmoney Lenders, which will automatically invest in loans, using your Custom Filters to match your personal investment strategy.
What is Auto-Lend and how does it work?
Auto-lend is automated service where you can have your orders placed on your behalf based on your lending criteria.
How it works
Auto-lend is optional, so it only operates if you have set it up and turned it on. You can also turn it off at any time. Once Auto-Lend is turned on, when a loan comes into the marketplace the Auto-Lend engine will automatically assess if it meets your personal investment strategy (i.e. your assigned Custom Filter). If it does then the system will order notes in that loan as per your settings.
How is Auto-Lend prioritised?
Loans go through the Auto-Lend engine before they hit the Marketplace. This means that users of Auto-Lend do get priority over manual lending in the Marketplace. However, the percentage of each loan that can be fulfilled with auto-lend can be set to less than 100%. Harmoney will set it based on the demand for Auto-Lend vs manual lending.
The Auto-lend engine prioritises which Lender it orders notes for first using a prioritisation ratio of 'Funds available' to 'principal outstanding +1'. The Lenders with the highest ratio will get the first orders of notes. For example:
- Lender A has $50 Funds available and $1,000 Principal Outstanding, so a ratio of 5% (50 / 1001)
- Lender B had $300 Funds available and $8,000 Principal Outstanding, so a ratio of 3.75% (300 / 8001)
- Lender C has $8,300 Funds available and $187,800 Principal Outstanding, so a ratio of 4.41% (8,300 / 187,801)
In this scenario, Auto-Lend would prioritise Lender A first, then Lender C, then Lender B.
A step-by-step guide to setting up Auto-Lend
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Before you start: Setting up a Custom Filter
In order to use Auto-Lend, you must first create a Custom Filter. Auto-Lend uses your preferred Custom Filter to select which loans you wish to Auto-Lend in. If you haven't already created a Custom Filter you can learn how to do so on our Custom Filters page.
Step 1: Getting Started with Auto-Lend
You will find Auto-Lend in your dashboard under Invest > Marketplace > Auto-Lend. Once on the page, there are a series of setting you can configure to meet your own personal lending strategy.
Step 2: Choosing your filter
The first part of your configuration is to choose which Custom Filter you wish Auto-Lend to use when investing on your behalf. Once Auto-Lend is enabled, any loans that match your Custom Filter criteria could potentially be participated in - so ensure you configure your Custom Filter to match your lending strategy.
Step 3: Setting your limits
The next step is to set the limits on how much you wish Auto-Lend to lend on your behalf. There are three fields to complete:
- Min. avail. fund balance: This is the minimum amount of 'Funds Available' you want left in your account at any time. If you pick $0 then Auto-Lend will trigger everytime you have at least $25 to Lend.
- Max. notes per loan: This is the maximum number of notes to invest in each loan.
- Daily Auto-Lend Limit: This is the maximum dollars Auto-Lend will invest on your behalf each day.
Step 4: Enabling Auto-Lend
That's it! You're all set to go. All you need to do is enable Auto-Lend using the Yes/No switch and hit the Save button. From there Auto-Lend will begin lending for as soon as possible. If you wish to disable Auto-Lend you can return to this screen at any time and turn the switch to No (remembering to hit Save again).
Reviewing your Orders: Identifying Auto-Lend loans
When you are reviewing your Order history, you will now see a small magic wand next to loans that have been lending in using Auto-Lend.
Watch the video
I have got Auto-Lend on so why are my funds are not being deployed?
This could be because your filter criteria are too tight, which means there are not enough loans meeting your criteria. It could also be that your prioritisation ratio is low, or it could be the flow of loans into the marketplace.
Why does Auto-Lend prioritise in that way?
We looked at many options for prioritisation of Lenders on the same loan and ran scenarios to determine what would be a fair methodology. What we found with using the Funds to principal ratio was that lenders with small portfolio’s got orders first but as they only had small amounts of funds it meant that larger lenders would also get orders as well.