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Post by wizzen on Nov 2, 2016 10:13:44 GMT
Hi, can you please suggest how to perform a simple Bondora account "health check" so that I can see the real performance and potential issues? I have just recently started digging into data and I am not sure about real situation of my account. Bondora Account value formula is: Available funds + reserved funds + outstanding principal - Overdue principal Does this formula counts the defaulted loans? All questions are really basic but I have to start somewhere.  Thank you for your help in advance. |
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Post by rahafoorum on Nov 2, 2016 13:10:09 GMT
Bondora Account value formula is: Available funds + reserved funds + outstanding principal - Overdue principal Does this formula counts the defaulted loans? Bondora includes in the "overdue principal" only the amount of principal that is past due according to the original loan schedule. Even for defaulted loans. In other words, if a loan defaults, then this value includes the sum of scheduled principal payments for the previous unpaid 2-3 payments and the next payment is included once the next date of the original schedule goes by. In case there is some recovery, it's deducted from that overdue principal, so it's possible to have a defaulted loan with €0 overdue principal as well.
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fric
Member of DD Central
Posts: 199 
Likes: 79
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Post by fric on Nov 3, 2016 7:22:21 GMT
Yeah, and this system also gives you the false feeling everything is not so bad, because it shows only lets say 5-6% of your total investment is overdue. While in the meantime the total value of those loans in default could be 50%  ))) |
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Post by wizzen on Nov 3, 2016 8:05:19 GMT
This is Bondora transperancy at its highest level.
What is your % of defaulted loans and % in €?
Mine looks like this:
% of defaulted loans = 13,1%
% of € in defaulted loans = 8,6%
From now on the only option in P2P lending is buyback or nothing.
I think Bondora will or already has pissed of so many of investors that they will soon be forced to change the business model to lower interest + buyback or they will be in serious trouble.
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Post by coolrunning on Nov 3, 2016 9:37:12 GMT
Bondora's upfront stats are meaningless.
You can get a much more reasonable figure by:
- home page, click on Net Return at the top
- look at Yield to maturity
If you account is newish, choose Bondora portfolio, or if more mature, use own history.
Even these are optimistic. Probably you should set the default slider lower, say 15-20%
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Post by coolrunning on Nov 4, 2016 21:37:04 GMT
Bondora's upfront stats are meaningless. You can get a much more reasonable figure by: - home page, click on Net Return at the top - look at Yield to maturity If you account is newish, choose Bondora portfolio, or if more mature, use own history. Even these are optimistic. Probably you should set the default slider lower, say 15-20% This new blog entry explains it: www.bondora.com/blog/forward-looking-return-calculation/
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Post by rahafoorum on Nov 5, 2016 9:26:47 GMT
Bondora's upfront stats are meaningless. You can get a much more reasonable figure by: - home page, click on Net Return at the top - look at Yield to maturity If you account is newish, choose Bondora portfolio, or if more mature, use own history. Even these are optimistic. Probably you should set the default slider lower, say 15-20% I wouldn't be too sure that even this solution helps you that much. If I have understood correctly, then these filters are applied to only the future part of the schedule, not the unpaid past payments? It also doesn't enable to account for any recovery that has occurred by now already so if your average recovery has been say 20% and based on this you assume that 20% of defaulted loans recover, then that would increase the recovery rate for already recovered loans by that additional 20%? You will probably get quite random result, although it may be more accurate than what's shown by default.
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Post by geldregiertdiewelt on Nov 6, 2016 8:36:07 GMT
I’m an investor in Auxmoney, Lenidco, Bondora and Mintos. Each platform provides some kind of yield projection, and none makes a lot of sense to me.
My method of calculation is very simple: I relate the interest collected in the most recent month to the money tied up in this platform.
An example in Bondora terminology: 19,61 € “total interest received” in Oct for an “account value” of 1.180,68 € equals 1,66% in Oct, extrapolated 19,93 % p.a.
In a phase where I’m adding funds, the calculation will be too conservative, because the just transferred money is already in the “account value” but has not yet returned any interest. If I have just reduced my investment, it’s the other way around.
I do this calculation at the end of every month and this gives me a real-life track record and a realistic projection of what I can expect.
I don’t care about any platform's voodoo yield calculations.
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Post by oktaeder on Nov 6, 2016 15:57:16 GMT
I doubt that your calcultion is better than bondora's. You will ever calculate positive earnings that way and don't think about losses by defaulted loans.
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Post by rahafoorum on Nov 6, 2016 17:09:34 GMT
That won't work indeed. You invest €10000, €5000 defaults and is lost without any recovery at all, but you receive €100 interest from the rest. Your calculation shows you 1% return, while your money is actually going down the drain and fast.
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Post by geldregiertdiewelt on Nov 6, 2016 22:25:07 GMT
I doubt that your calcultion is better than bondora's. You will ever calculate positive earnings that way and don't think about losses by defaulted loans. Defaulted loans will not return interest, so their default is considered in my equation. But their principal is still part of the tied money. So my calculation might be too pesimistic, rather than too optimistic.
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Post by wiseclerk on Nov 6, 2016 22:27:59 GMT
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Post by rahafoorum on Nov 6, 2016 22:30:05 GMT
Defaulted loans will not return interest, so their default is considered in my equation. But their principal is still part of the tied money. So my calculation might be too pesimistic, rather than too optimistic. Did you not read the example above? How is 1% return in that case there being too pessimistic, when you actually lost half of your investment?
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Post by oktaeder on Nov 7, 2016 7:57:32 GMT
I doubt that your calcultion is better than bondora's. You will ever calculate positive earnings that way and don't think about losses by defaulted loans. Defaulted loans will not return interest, so their default is considered in my equation. But their principal is still part of the tied money. So my calculation might be too pesimistic, rather than too optimistic. Sorry, but what a nonsense. It's even worse than bondoras calculation: they subtract the non paid principal amount from the interests before they do a similar calculation. You will awake in a shock if you will do your math in 1-2y seeing what you have lost.
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art
Posts: 22
Likes: 22
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Post by art on Nov 7, 2016 8:09:50 GMT
What is missing in that calculation is adjusting your monthly return for charge-off's. This is how I calculate my returns: monthly cash flow minus monthly charge-off over total value of the portfolio. I am not investing on Bondora, so not familiar with their terminology. On Mintos I consider value to be charged-off when it goes to bad debt column.
If you want to be more accurate in your calculations you could consider 50% or more of your defaults to be a charge-off and that would give you a more realistic picture sooner, however they will eventually go to bad dept anyway and you will have to recognize losses.
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)))
