criston
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Post by criston on May 4, 2019 14:27:42 GMT
I have been trying to compare defaults of various peer to peer companies.
Ablrate show historic defaults of anywhere between 0.6% to 1.3%, although how this is applied to a limited total of loans & companies is difficult to assess.
The defaults appear to be very good for a platform offering amongst the highest returns.
Of course, defaults after recoveries are the key to historic records & take a long time.
What is the general experience here; I don't see many complaints.
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benaj
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Post by benaj on May 4, 2019 15:45:21 GMT
The issue with the P2P sector is the standard of measuring defaults as mentioned by AltFI. www.ablrate.com/faq/what-are-your-estimated-default-rates/The rates you found from the FAQ is a bit dated and it hasn't been updated for quite a while. I am afraid ablrate doesn't show much statistics and there are a few reviews about this. On the secondary market, there are more than 45 loans and 39 loans have offers available at the time of writing. In the last 2 tax years, I have no bad debt in the tax statment and I am awaiting further update from ablrate to deal with those borrowers in financial difficulties. At the moment, I have a few loans in arrears but it doesn't impact my XIRR much as no defaults have been declared yet. The positive I would like to highlight, most borrowers (or the same borrowers) make monthly repayment and the secondary market trading volume is reasonable at the moment. Ablrate has demonstrated some loans restructuring, for example, loan 85, restructured lending rate from 14% to 8%. With a 94.5% offer on SM, current yield is 12.757%
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blender
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Post by blender on May 4, 2019 17:33:33 GMT
There is a big difference on this platform between loans which have formally been defaulted and loans which are in default, under the terms of ablrate's terms and conditions and loan contracts. I think that when ablrate speak of their default rate they are speaking of loans which have been defaulted or might be in the future, not including loans which are in default but have not been defaulted. The decision of when to default a loan which id technically in default is a matter of judgement for each loan. If we take the six pub-related loans, then loan 85 is definitely not in default, having been restructured and being up to date with the restructured payments. The other five are all seriously in default, way past 90 days without a payment of a penny, but they have not been defaulted. A cunning plan to save them from that fate is being hatched. Lenders will not receive what they expected, and ablrate often talks of recoveries on loans which have not been defaulted. Even if there was a method of predicting defaults realistically, there is not a reliable statistical basis to support it. Best to judge each loan on its merits.
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Post by marcusponds on May 5, 2019 13:36:45 GMT
I use a crude but effective way of assessing this. For each of my four P2P platforms, I calculate on a monthly basis the interest rate I’m achieving simply based on the returns divided by total invested in that platform. The monthly fluctuations are remarkably small and Ablrate is consistently trending at around 13%, with MT more like 8%. No need to ask where my repayments and new money are going.
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nw99
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Post by nw99 on May 5, 2019 17:45:38 GMT
MT still waiting for my money once back straight into Ablrate
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blender
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Post by blender on May 5, 2019 19:00:11 GMT
I use a crude but effective way of assessing this. For each of my four P2P platforms, I calculate on a monthly basis the interest rate I’m achieving simply based on the returns divided by total invested in that platform. The monthly fluctuations are remarkably small and Ablrate is consistently trending at around 13%, with MT more like 8%. No need to ask where my repayments and new money are going. Same for me. Since I joined in April 2015 I have had four years of returns over 13%, not a single loss, and all my loans are currently repaying as they should. I rarely hold a loan to term unless the security looks solid, and I get out when I get nervous, even losing a few % to do it. I have been in quite a few loans which are now not performing so well, or at all, and this has made me cautious about pushing my luck. We used to have just into six figures at the peak, but I judged that too risky in present conditions, and that has reduced. Most of our p2p now produces under half what Ablrate has done so far, but more safely - I think. Past performance should not be projected into the future - another four years at 13% plus, without a loss or cash tied up in non-performing loans? Unlikely. But past performance is appreciated, and has been spent on some very good holidays!
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ptr120
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Post by ptr120 on May 5, 2019 20:59:04 GMT
For the sake of balance I hold two loans with ABL that have been in default for years but have not recovered a single penny, and I'm not sure if I'll see a penny soon either.
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hazellend
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Defaults
May 5, 2019 21:24:19 GMT
via mobile
Post by hazellend on May 5, 2019 21:24:19 GMT
I use a crude but effective way of assessing this. For each of my four P2P platforms, I calculate on a monthly basis the interest rate I’m achieving simply based on the returns divided by total invested in that platform. The monthly fluctuations are remarkably small and Ablrate is consistently trending at around 13%, with MT more like 8%. No need to ask where my repayments and new money are going. Same for me. Since I joined in April 2015 I have had four years of returns over 13%, not a single loss, and all my loans are currently repaying as they should. I rarely hold a loan to term unless the security looks solid, and I get out when I get nervous, even losing a few % to do it. I have been in quite a few loans which are now not performing so well, or at all, and this has made me cautious about pushing my luck. We used to have just into six figures at the peak, but I judged that too risky in present conditions, and that has reduced. Most of our p2p now produces under half what Ablrate has done so far, but more safely - I think. Past performance should not be projected into the future - another four years at 13% plus, without a loss or cash tied up in non-performing loans? Unlikely. But past performance is appreciated, and has been spent on some very good holidays!
I’ve had a similar ABL story to you. Hoping for history to repeat as a lot of my loans are amortising. Obviously if their current largest non defaulted borrower gets into trouble all bets are off
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blender
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Post by blender on May 5, 2019 21:54:55 GMT
For the sake of balance I hold two loans with ABL that have been in default for years but have not recovered a single penny, and I'm not sure if I'll see a penny soon either. There are only two such loans and the other default was fully recovered. The point is that much of it is down to luck, and you cannot really diversify out of significant risk here. The only reason I am not in those two loans is that I left my holding (a small ration) for sale at 3%, not expecting to sell, and they were bought. Those two loans were relatively small and the circumstances unique, though of course a real concern if you hold them. They really are irrelevant to an assessment of current risk on the platform, which would consider undefaulted 'loans in trouble' as a proportion of the current loan book value.
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