MANAGING YOUR INVESTMENTS
We monitor the repayment progress for each loan, check whether the funds collected from borrowers match the expected instalment, interest or insurance payment. We ensure that all components of a scheduled loan repayment are correctly itemised and divided among individual investors proportionally, based on the percentage of the loan that they funded. In this manner, with each scheduled loan repayment you, as an investor, automatically receive a part of the original loan principal, as well as a part of the agreed interest payment charged on the loan.
Watch how your investments are being repaid
On your My Account page you can watch in real-time how your investments on Žltý melón are being repaid by the borrowers whose loans you have funded.
When borrowers make their loan repayments and the funds paid into your account, you can then decide whether you will withdraw these funds to your bank account or choose to reinvest them into new loans so that you will increase the returns on your investment with us.
Investment management includes monitoring of loan repayments and maturity. Žltý melón actively monitors each borrower and and loan in order to proactively identify the very first signs of any potential repayment difficulties and loans that are possibly in danger of default.
If this happens, we automatically initiate a multi-level approach to communicate with the borrower and take all necessary measures to ensure that the loan is repaid and to maintain the security of your investment.
You can read more on about the recovery of non-performing loans here.
STRUCTURE OF INSTALMENTS
Borrowers repay their loan through scheduled instalments that are set at regular intervals and for a fixed amount (i.e. the debtor repays the same amount on the same day each month). The only exception is final instalment paid in the last month, when the amount of the instalment is amended to reflect the precise date when the loan was taken out.
Repayment through fixed regular instalments does not mean there is an equal distribution ratio, between loan principle and interest charges, for each instalment. This ratio is different for each instalment and changes depending on the length of the loan.
This means that the borrower repays a higher proportion of the interest charges on the loan principal at the beginning of the loan period and that gradually the ratio changes so that more and more of each instalment payment goes towards repaying the loan principal, rather than towards interest charges.
This weighting of instalment payments is in line with the standard schedule for loan repayments used by banks and other financial institutions. It is designed to ensure fairness for both investors and borrowers, as it prevents borrowers from ‘gaming’ the system by taking out a longer-term loan at a lower interest rate, while knowing already that they will repay the loan early and therefore benefit from lower interest charges.