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Post by nellerdk on Apr 18, 2018 17:32:52 GMT
93% of my loans in the "31-60 Days Late" category are in the interval from 10 - 14% interest rate.
With this in mind, could it be strategic to buy loans with lower interest, if they are then not as likely to be paid late?
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Post by krenzen93 on Apr 18, 2018 19:03:46 GMT
I think it very much depends on how big of a chunk your late loans represent of your overall portfolio.
In the case that you have a lot of late loans from originators which are not accruing interest once it's marked as late, I think it could be a good idea. I guess even though the loans are bought back, then 60 days with no interest before the buyback can a amount to a lot.
I haven't done any math on the matter though.
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Post by Ace on Apr 18, 2018 22:51:36 GMT
93% of my loans in the "31-60 Days Late" category are in the interval from 10 - 14% interest rate. With this in mind, could it be strategic to buy loans with lower interest, if they are then not as likely to be paid late? The answer to your question is yes, that would be a strategic decision. Unfortunately, you haven't provided sufficient information to determine whether it would be a good or bad decision. To illustrate let's say you have 100 loans in the "31-60 Days Late" category, of which 93 are in the interval from 10 - 14% interest rate. I.e. 93%. There are infinite possible scenarios, but let's examine a couple of extremes: A) You have 1,000,000 loans with a 10 - 14% interest rate that have paid back without any late payments. Obviously, the 93 late loans in the started rate range are insignificant (assuming all your loans are a similar size). Therefore, your suggested strategy is a bad decision. B) You have no performing loans with a 10 - 14% interest rate, and at least one performing loan outside of this interest rate range. Your suggested strategy could be a good decision. The more performing loans you have outside the 10 - 14% interest range the better it looks. Your actual situation is most likely somewhere between A) and B) 
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fric
Member of DD Central
Posts: 199 
Likes: 79
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Post by fric on Apr 19, 2018 5:49:30 GMT
The problem is interest rate shown on Mintos by itself does not correlate with risk involved. The interest rate on Mintos is only the amount of money the loan originator is willing to pay you. We often can see fluctuations of interest rates between loan originators - I think it correlates much more with what's available on the market.
Mogo car loans were 10-12% for some time, they were also for 13-14% at some point - did they become worse? Maybe yes, maybe no. It can easily be just and indication that the loan originator is in need of cash to expand further. I was still buying those car loans at 12%, since nothing much better was available on the market. Now you can see the same, the interest rates have gone up for some originators and others are following. The best example is Mozipo - they like to add +0.1% and so their loans are 13.6%, 14.1%, 15.1% etc. So they stand out and will be displayed first when sorting by interest rates and will be bought first by auto invest settings.
We don't see the real interest rates the consumers are paying and for most loans its much much more than those 13-14% on Mintos.
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Post by domlagagne on Apr 19, 2018 6:18:59 GMT
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Apr 19, 2018 8:26:03 GMT
As long as the buybacks are honored the interest is paid until the loan is bought back, so it makes no difference how many borrowers are overdue, so the only reason to accept lower interest loans is to diversify among more lenders.
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Post by gugulete on Apr 19, 2018 20:10:44 GMT
I invested heavily in Armenian 30 days loans for 15%....
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Post by Ace on Apr 19, 2018 20:20:32 GMT
I invested heavily in Armenian 30 days loans for 15%.... How's that working out?
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Post by gugulete on Apr 19, 2018 20:52:33 GMT
We will see the results next month, I am new to this field, this is my second month as a P2P investor, and started to invest significant amounts of money in Mintos platform.
I personally do not like to borrow people less than 35-year-olds, I prefer women to the detriment of men and do not use Autoinvest because I have enough time and the liquidity on the Primary market is very high and I choose my loans manually.
Maybe I'm wrong, but that's how I like to do it.
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kulerucket
Member of DD Central
Posts: 336
Likes: 93
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Post by kulerucket on Apr 19, 2018 21:46:48 GMT
93% of my loans in the "31-60 Days Late" category are in the interval from 10 - 14% interest rate. With this in mind, could it be strategic to buy loans with lower interest, if they are then not as likely to be paid late? On it's own this doesn't really tell you anything. ~95% of my loans in any category are in the interval from 10 - 14% interest rate. What % of you current loans are in this range?
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kulerucket
Member of DD Central
Posts: 336
Likes: 93
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Post by kulerucket on Apr 19, 2018 22:09:25 GMT
We will see the results next month, I am new to this field, this is my second month as a P2P investor, and started to invest significant amounts of money in Mintos platform. I personally do not like to borrow people less than 35-year-olds, I prefer women to the detriment of men and do not use Autoinvest because I have enough time and the liquidity on the Primary market is very high and I choose my loans manually. Maybe I'm wrong, but that's how I like to do it. As there is only a single originator supplying loans from Armenia, this is quite a risky strategy. Especially as you are investing what you consider a significant amount of money. You should be much more concerned with diversification across originators that worrying individual loan details.
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Post by gugulete on Apr 20, 2018 6:28:43 GMT
Thanks for the advice, I currently have 46 Armenian loans out of 204 total portfolio.
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