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A few questions about loans

Author
Fidelas Constans
#1 - 2017-01-09 13:25:55 UTC
Hi MD :)

I am contemplating asking for a loan, but, wanted to ask a couple of questions before doing so. Basically, I am considering embarking on a project which will earn reasonable returns, but lack some of the capital to get it off the ground. So, my questions / assumptions are :


  1. Collateral : Should this be equal to, or greater than the loan amount requested, and does the collateral have to cover the interest promised on the loan?
  2. Collateral : Does this get contracted to the investor, or should it sit with third party?
  3. Interest : What would a reasonable amount of interest be on a 5 billion isk loan over 3 months?


Any input would be greatly appreciated, as I want to make sure I have weighed all the options correctly before pulling the trigger :)
Caldari State
#2 - 2017-01-09 14:06:23 UTC  |  Edited by: Cista2
1) Ideally it should be the exact loan amount excluding interest, and then the initial contract covers exactly that amount. Then when the loan is over you contract the loan amount plus interest against the collateral.
This is mostly relevant if the loan is direct. If there is a third party then the collateral can be worth more than the loan, it does not really matter because there is no risk. I once took a 30 bn loan on an item I had paid 80 bn for.

2) If there is more than one investor then third party is necessary, or one of the investors must act as de facto third party. If there is only one investor then it is matter of convenience - if there is a difference in the value between loan and collateral then a third party is still necessary.

3) 2%

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Fidelas Constans
#3 - 2017-01-09 14:08:03 UTC
Cista2 wrote:
1) Ideally it should be the exact loan amount excluding interest. This is only important if the loan is direct. If there is a third party then the collateral can be worth more than the loan, it does not really matter because there is no risk. I once took a 30 bn loan on an item I had paid 80 bn for.

2) If there is more than one investor then third party is necessary, or one of the investors must act as de facto third party. If there is only one investor then it is matter of convenience - if there is a difference in the value between loan and collateral then a third party is still necessary.

3) 2%


Thanks :)
#4 - 2017-01-09 15:19:50 UTC
Cista2 wrote:
3) 2%


If it's with 100% collateral. Blink Otherwise starting at ~10% by the looks of recent trends.
Fidelas Constans
#5 - 2017-01-10 09:35:27 UTC
It would be 100% collateral. Whilst I have never asked for a loan before, I have been around the block enough times to know you dont get something for nothing :)
#6 - 2017-01-10 12:21:09 UTC
For 5b, I would suggest collateral that would firesell for ~5300m and that has a fairly stable price history.

In that case there is no need to involve a third party, as doing so adds considerable effort and expense to a loan where neither party (lender or borrower) is strongly motivated to default anyway.

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#7 - 2017-01-11 00:17:00 UTC
i can tell how i do it "lending money out"

i only take colat , and only the 100% , then add some of the % thats agreed on with the loan. ie if its 10b @ 3% , then it would be colat for 10b and the 3% to cover .

ive only had 2 peeps not being abel to make the payments so far outta 50 ish customers.

3rd party is on lenders expenses so he can add that 2 it if he wants or not , dosent matter 2 me.

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