benaj
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Post by benaj on Jan 31, 2018 7:13:27 GMT
There's still another day yet but I picked up another 2 C1 defaults, that makes 5 now only 2 more will wipe out returns this month - including early adopter. So much for £10 loans  . Like I said earlier, C1 has a default rate of 6.5% under current economic conditions, that's around 21 loans expected default from C1 in your Zopa core out of 1619 Core loans.
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cb25
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Post by cb25 on Jan 31, 2018 9:59:00 GMT
I've got 14 ISA Plus loans with Default Dates
-1 Oct 17, 1 - Nov 17, 1 - Dec 17, 11 - Jan 18
-1 B, 2 C1, 6 D, 5 E
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zlb
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Post by zlb on Jan 31, 2018 20:28:48 GMT
There's still another day yet but I picked up another 2 C1 defaults, that makes 5 now only 2 more will wipe out returns this month - including early adopter. So much for £10 loans . Like I said earlier, C1 has a default rate of 6.5% under current economic conditions, that's around 21 loans expected default from C1 in your Zopa core out of 1619 Core loans. the default rate doesn't really help if one person in B defaults after no repayments, and another B defaults after 50% repayment. I think initial diversification is key. They wrote to me to ask why I'd not yet transferred an ISA lump. I've asked for a certain small value to be transferred at a time, but imagine I'll get a standard response. It's been discussed before, but it comes back to their putting initial deposits into holding. I have cash ISA which does this. Logging in to remove uninvested funds is hit or miss. I've gained earnings which are approx 2% of entire earnings this month, whereas it's usually 90%. The next two months or so are the current watch then.
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aju
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Post by aju on Feb 1, 2018 10:50:40 GMT
Okay jan is 1st bad month in isa and worst since joining z in 2006. Just checked collections(19) and arrangements (3) so probably should batten down the hatches for next 2/3 months or so until things settle, wishful thinking perhaps.
Jan was 5 badduns in the end 1 plus 4 core. Still in good shape though with my split of core/plus is 87%/13% with 27% cover in SG. 6 defaults although 1is an iva so not real yet.
"This post Created on Bloody useless pile of shite (Samsung Tab 2)"
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Post by fuzzyiceberg on Feb 1, 2018 15:50:29 GMT
There's still another day yet but I picked up another 2 C1 defaults, that makes 5 now only 2 more will wipe out returns this month - including early adopter. So much for £10 loans . The point about £10 loans compared to larger micro loans is that for any given portfolio size you are more likely to 'achieve' the expected dafault rate and less likely to end up with something better or worse. It doesn't impact on your expected loss, which remains the same.
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aju
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Post by aju on Feb 1, 2018 16:43:11 GMT
There's still another day yet but I picked up another 2 C1 defaults, that makes 5 now only 2 more will wipe out returns this month - including early adopter. So much for £10 loans . The point about £10 loans compared to larger micro loans is that for any given portfolio size you are more likely to 'achieve' the expected dafault rate and less likely to end up with something better or worse. It doesn't impact on your expected loss, which remains the same. I was being a just a tad sarcastic (witless as I am) but I do agree with you. Let's hope my achieved defaults are on the lower end rather than the higher end though. The £10 loan approach may not be a best plan as its still to be proven. I have tried to get £10 loans in my non SG lending in ISA and a large amount of my loans, albeit mostly SG ones so not directly relevant, are <£10 as well.
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zlb
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Post by zlb on Feb 1, 2018 20:23:05 GMT
I've had an email from Z. It says they are looking to improve diversification, to manage the risk for larger deposits. There isn't a timeline.
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aju
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Post by aju on Feb 2, 2018 0:20:16 GMT
It used to be 2% a few years back then they reduced it to 1%. For me this should be a setting that one can change so we can be more in control. I won't hold my breath waiting though.
Whilst it requires more work for me the manual method does work if one doesn't get too eager to lend too fast (I managed it with the initial ISA by only feeding in money from my bank. I forgot about relend though and slipped up one day resulting in over a 15 £20 loans before I noticed. I withdrew the money back to holding to correct it before restarting lending. Bit of a pain but I didn't do that again.
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Post by newlender on Feb 2, 2018 7:08:20 GMT
Just had my first default - £20 I lent to a C1 back in June. Earnings for January still >£70 on a fully funded ISA. I have 12 Collections though. My big mistake was to transfer from my bank into ISA Holding and then not to look for a couple of days....I transferred £2K and then £4K two days later  . Do the math, as they say..........all my fault and I should have been more careful (I thought I'd set reinvestment to Off). None of the £40 loans is in trouble though (yet!) and the interest on those (I have about 20) is possibly worth the risk, especially as it's tax-free. Still concerned a bit about the number of borrowers who don't pay back a penny, then go to Collections and finally default. Shall we start to track these here? I have none so far, but 4 of my Collections haven't paid anything back so I shall have soon, I fear. |
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aju
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Post by aju on Feb 2, 2018 9:09:20 GMT
Yes i agree the increasing non payers or 1st payment made then stopped are increasing but i wonder if this is because the number of loans is increasing too, for me when i had sg cover i had less loans, more of them were of higher value and so i never noticed them. Checking sg non payers is harder as one has to trawl through statements to check.
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benaj
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Post by benaj on Feb 2, 2018 10:01:41 GMT
Just had my first default - £20 I lent to a C1 back in June. Earnings for January still >£70 on a fully funded ISA. I have 12 Collections though. My big mistake was to transfer from my bank into ISA Holding and then not to look for a couple of days....I transferred £2K and then £4K two days later . Do the math, as they say..........all my fault and I should have been more careful (I thought I'd set reinvestment to Off). None of the £40 loans is in trouble though (yet!) and the interest on those (I have about 20) is possibly worth the risk, especially as it's tax-free. Still concerned a bit about the number of borrowers who don't pay back a penny, then go to Collections and finally default. Shall we start to track these here? I have none so far, but 4 of my Collections haven't paid anything back so I shall have soon, I fear. I started on the plus at the end of March '17, first default happened on 7th Aug, less than 5 months. Now I had 20 defaults out of 1100+ all time loans. 7 defaults in December 2017 and the latest one in Jan 18. I started selling my loans in November '17 and still have 13 live loans. C1 lending rate is around 12-17%, in theory, with the default rate of 6.5%, the projected return for C1 loans would be 5.5%+
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benaj
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Post by benaj on Feb 2, 2018 10:28:21 GMT
I've had an email from Z. It says they are looking to improve diversification, to manage the risk for larger deposits. There isn't a timeline. I think Zopa can improve a lot of other things as well, like improve the selling speed, bring back provision fund, or even increasing returns. The main risks in Zopa current are defaults from higher risk loans eat the profits from low & high risk loans. Lending rate for E loans is around 28-31%, even with the default rate of 12%, in theory the projected return of E loans only product would be 16%+, Even if half of those is late payment, it would be 8%+, but there is no Zopa E loans only market at the moment.
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Post by wyndstryke on Feb 3, 2018 0:24:49 GMT
..., bring back provision fund, ... IMO provision funds only work when the economy is stable. It'd just get blown away if there is an economic shock. I think they give a false sense of reassurance.
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zlb
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Post by zlb on Feb 15, 2018 10:24:04 GMT
What does it mean when it says loan has now been assigned to zopa Ltd?
Also, here's question. Would it be better to sell my ISA loans into holding and then move gradually back into product, in order to get rid of the £40 and £50 loans resulting from large initial deposit?
Plus, once these loans are paid back, they gradually all become diversified to £10 loans, right? (I feel sure there are heaps more £50 loans than last time I looked... I'll have to compare the files)
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aju
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Post by aju on Feb 15, 2018 14:00:14 GMT
What does it mean when it says loan has now been assigned to zopa Ltd? Also, here's question. Would it be better to sell my ISA loans into holding and then move gradually back into product, in order to get rid of the £40 and £50 loans resulting from large initial deposit? Plus, once these loans are paid back, they gradually all become diversified to £10 loans, right? (I feel sure there are heaps more £50 loans than last time I looked... I'll have to compare the files) It means that Zopa is dealing with defaults recovery either SG or other. In other words they are performing recovery of varying degrees on the loan. In earlier cases (Pre April 2016) it will say P2PS instead of Zopa. Not sure selling the loans and losing 1% in the process would be the best approach unless perhaps there is a majority of loans at higher values. If there is a mix you may find the £10 ones sell quicker than the higher value either way you are paying for the privilege. Someone elsewhere suggested that the propensity to default is not down to the numbers of the loans. Having 100 £50 loans has as much likelyhood of defaults as having 500 £10 loans as the more loans there are then the more defaults. Its still to be tested in my case anyway. There is a train of thought as well in that once you have lent the money, relending over time will force the default numbers to level out more as the investment matures. That certainly seems to be the case comparing old Invest side against new ISA loans and definitely Mrs Aju to my investment bears this out to a degree. I'm also taking into consideration that even though SG is covered the defaults still occur and have a statistical bearing - I think. You cannot say what you may have lost in SG but loan per loan defaulted seems to still be a function of numbers of loans. Are you still lending at £50 - i.e. has zopa set the relend at the last higher level of lend perhaps. If it were me to be on the safe side I'd move all money to holding thats not yet lent and then relend it back onto the queues. I'm no expert here so take what I've said with a pinch of salt - my experience may not be relevant to another's. My view on the £10 loans may take another 2 years to even be provable but I think it may be the better approach - diversifying loans wise.
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. Do the math, as they say..........all my fault and I should have been more careful (I thought I'd set reinvestment to Off). None of the £40 loans is in trouble though (yet!) and the interest on those (I have about 20) is possibly worth the risk, especially as it's tax-free. Still concerned a bit about the number of borrowers who don't pay back a penny, then go to Collections and finally default. Shall we start to track these here? I have none so far, but 4 of my Collections haven't paid anything back so I shall have soon, I fear.