Our Repeat Borrower feature – otherwise known as Rewrites to Investors and Top Up to Borrowers – allows Borrowers who have demonstrated a reliable track record of on-time repayments to top up their existing Harmoney loan, increasing their total loan amount.
Repeat Borrowing is a feature offered to certain Borrowers, who have demonstrated a reliable track record of on-time repayments, to Top Up their existing Harmoney loan.
Harmoney only allows each Borrower to have one active loan through the Marketplace at any one time. Because of this, a Borrower's existing loan is closed off, and rewritten.
Paying out existing loans to enable Borrowers to take out larger amounts is standard practice for fixed term personal loans.
Looking at which Harmoney Risk Grades are most commonly rewritten, A through to D are evenly split. However at the higher risk grades, E and F, we don't see as many customers being offered the chance to Repeat Borrow, and thus they make up a much lower proportion of the rewriten loans.
There are no additional fees incurred by lenders as a result of a loan being re-written for all loans with a contract date after 13 June 2016. On loans before that date lenders are charged 1.25% Service Fee on the repaid principal component of the re-written loan.
A Borrower must have good credit with a consistent loan payment history of on time in full payments and have capacity within their credit limit. All Repeat Borrowers must go through the entire responsible lending application process, including credit checks and serviceability.
We believe that asking Borrowers to manage multiple loans with different terms on different dates could potentially increase delinquencies/defaults and increase operating costs.
Each loan contract is an agreement between the Borrower and Lenders. It would be administratively difficult for us to contact every Lender on a loan to ask whether they accepted the new contract conditions including term, as all of our Lenders have different investment criteria.
Please feel free to drop us a line and we'll answer any other questions you have: investorservices@harmoney.co.nz