bank loans and interest

[Maha]

do you remember Loans for Newcomers Guide made by black sparrow?

ever since i have been wondering why bankers should charge so little? Since it is so easy to repay those loans quickly, it's obvious to me that the bankers are not charging enough to be worthy of their trade.

each banker can do with the gold entrusted to him what those who take loans do. many bankers has stored their hard won gold in the bank and provide loans for those who haven't saved up to do what they want. that's fine, take a loan, this thread is not for those who take loans. i am talking to my fellow bankers. lets quadruple the interest rates we use! let us finally make some profit from the investment we made.

[ChaIbaud]

It is not meant to be a very profitable business in my opinion. If you want to quaduruple interest go ahead but the banks that aren't doing this will definitely see more business, at least from me. Counter intuitive if you ask me.

[Maha]

one bank alone cannot achieve adjusted rates, an bankers gentlemen agreement can. we're all gentlemen/ladies in a respected business with a shared interest in profit. an higher interest will not hinder our customers to take loans. Black sparrows guide makes it clear how banks are underbidding.

[ChaIbaud]

Some bankers offer low rates because they understand it is a service that all players, including newer ones, use. I'll continue to use the banks that are for public utility and not focused on making a profit off of me.

[DezNutz]

You make decent profits by issuing more loans, while at the same time managing your interest rate, payment frequency, and length of loan. It is a slow way to make income, but if done right can bring in some nice gc.

[PhoenixKnight]

I typically issue interest friendly loans to parties that I deem trustworthy. Some have betrayed my trust though.

[Bmw]

I lost something near 50 mill from 4 people leaving the game right about the same time so that sucked.

[Banger]

The name of the game is term length. I loan at way longer terms than a lot of casual bankers because that is where I make my coin. People lending at 90 days are doing themselves a disservice. No profit in that. That is why I am seeking longer term loans. It keeps my payments down so I can leverage myself more, I always pay so the banks make good profit over the life of the loan. I personally will not lend under 365 days unless I really question someone's longevity.

[DezNutz]

The name of the game is term length. I loan at way longer terms than a lot of casual bankers because that is where I make my coin. People lending at 90 days are doing themselves a disservice. No profit in that. That is why I am seeking longer term loans. It keeps my payments down so I can leverage myself more, I always pay so the banks make good profit over the life of the loan. I personally will not lend under 365 days unless I really question someone's longevity.

Your forgetting to take into account that the estimated profit is only if the player pays as scheduled and doesn't pay the loan off sooner. Shorter loan lengths help alleviate this problem as your estimated profits are more realistic. Why would a player want to pay a banker more money? In the short term, I may have less money on hand, but once it is paid off, I will have saved more compared to paying over a longer period.

[Banger]

The name of the game is term length. I loan at way longer terms than a lot of casual bankers because that is where I make my coin. People lending at 90 days are doing themselves a disservice. No profit in that. That is why I am seeking longer term loans. It keeps my payments down so I can leverage myself more, I always pay so the banks make good profit over the life of the loan. I personally will not lend under 365 days unless I really question someone's longevity.

Your forgetting to take into account that the estimated profit is only if the player pays as scheduled and doesn't pay the loan off sooner. Shorter loan lengths help alleviate this problem as your estimated profits are more realistic. Why would a player want to pay a banker more money? In the short term, I may have less money on hand, but once it is paid off, I will have saved more compared to paying over a longer period.

I get loans at 6% for 730 days, I lend at 9% for 365 days. My loan profit goes into my bank. I plunder to pay my loans and then some. I lend the money out twice during the loan duration putting it to work for me twice. My loan profit from payments right now is almost 2 million a day. If someone repays me before the duration of the loan is up barring a special circumstance, the likely hood I lend to them again goes down as it is not profitable to me moving forward.