One way to reduce investment risks is to use the Buyback service.
What is Buyback?
Buyback is a free service that allows an investor to sell overdue investments to the NEO Finance platform. The sale of investments is initiated in the event of insolvency, when the contract with the borrower is terminated. Investors then have the opportunity to sell their investments to the platform for 25-50% of the outstanding loan. Important: From 14.09.2023 or 01.03.2024 (depending on the date of signing of the contract) for A, B and C rated loans, NEO Finance will introduce a new Buyback pricing, which is valid for loans invested either manually or through automated advertisements. Click here to find out more about the conditions.
How does Buyback work?
NEO Finance terminates a contract with a borrower when he or she is about 3-5 instalments late. Once the contract with the borrower has been terminated, investors can sell their investments to the platform at an already fixed price. 5 calendar days before the planned termination of the loan agreement, the NEO Finance sends a notice to each investor in the loan regarding the possibility to sell the defaulted loan. If the Borrower fails to pay all arrears by the scheduled date, the NEO Finance will terminate the loan agreement with the Borrower and offer the investors a 30 calendar day buyback of their investment.
For the purpose of calculating the cost of the disbursement, the outstanding portion of the investment is multiplied by a factor depending on the Borrower's credit rating and on the expiry date of the offer, when the investor decides to sell the defaulted investment. Coefficients valid for the first 3 days of the offer by rating: for A+ rating: 100% (for new A+ rated loans funded as of 10:00 a.m. on 12.04.2021); for A+ (concluded before 12.04.2021) and A ratings: 70% of the outstanding credit; for B rating: 60%, for C rating: 50%.
We would also like to point out that Investors with VIP investor status have the opportunity to sell delinquent loans at a 0.1 point higher ratio than other investors without VIP investor status.
Buyback conditions for investors in A+ loans from 12.04.2021
NEO Finance will offer new Buyback pricing for new A+ rated loans issued from 12 April. If an A+ rated loan issued after this date defaults and the contract with the borrower is terminated, the A+ investment will automatically be purchased by NEO Finance for 100% of the remaining loan balance.
The Buyback service itself costs nothing. However, the sale of defaulted investments is subject to appropriate pricing. The most important thing to know is that the Buyback service is available for 30 calendar days. During the first three days, the price offered is the highest and then decreases. You can view the full sale prices here
Important: New Buyback conditions have been announced for investors in A,B,C loans.
From 14.09.2023 or 01.03.2024 (depending on the date of signing of the contract), NEO Finance will start to apply a new Buyback pricing for A, B and C rated loans, which is valid for loans invested manually or by automated advertisements. Click here to find out more about the conditions.