james
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Post by james on Apr 9, 2015 12:42:33 GMT
How much of a return do we think people are actually getting? Just to give some idea of one non-P2P alternative, have a look at the still available Albion VCT linked offers. Overall average interest is expected to be around 6% with one doing 7% (table on page 3). That 7% is tax free and on the whole amount invested, while if a British tax payer you get 30% back from HMRC, capped at your income tax actually paid during the tax year. That 7% is then equivalent to 10% tax free on your actual amount invested. Compare that to Bondora's target of 12% after bad debt before tax and the way you can't really deduct bad debt from interest before tax even though Bondora does in their calculations. This makes it quite easy to decide not to put money with Bondora at the moment even if all you consider is projected returns and not trust issues. The 7% one is almost all asset-backed, meaning there's security and it does mostly lending, not equity investing. Investment returns of those of us who've been using Bondora for a while aren't very useful because the loans we have aren't available to you. 28% interest on Estonian A1000 loans was the norm. I started in November 2012. Bondora says my return is about 25%. My XIRR calculation is around 15.3% in Euros and 4.9% in Pounds, valuing late at 100% and 60+ late at nothing. This is for a portfolio of only Estonian loans. If I also valued 60+ late at 100% the returns would be 20.5% and 11.6%.
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duck
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Post by duck on Apr 9, 2015 16:29:26 GMT
...... most of them will end up in the +60 days overdue folder wich is according what i read all over the place means write of. You could try to put them on sale on secondary market but no one is dumb enough to buy defaulted loans even with a big discount since theres few hope of recovery. Recoveries take time (quite a lot of it) but they do happen. Currently I have 424 +60 day loans but there is an increasing number that are making payments or have cleared totally .... 73 of the 424 when I checked last week. That said I would never recommend Bondora as a first peer to peer site.
Interesting set of numbers james, using the same criteria (100% loss when +60 day late +100%) my pound return is currently 5.79% (after 20% UK tax) which is a vast improvement on the 3.92% I dropped to at the end of last year after 3 consecutive very bad months. In each of those months +60 capital loss was greater than interest paid and then the tax man wants me to pay tax on the total interest paid! I'm in all markets although for obvious reasons my representation in Slovakia is diminishing!
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james
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Post by james on Apr 9, 2015 17:29:37 GMT
Properguy, I usually don't have trouble selling previously defaulted loans. Where the law allows it the penalties produce returns which look attractive for the buyer.
Duck, my returns are before any allowance for tax effects. Looks as though at a minimum your investment timing worked out better on the exchange rate. What does your Euro return look like? Wondering how much of it is exchange rate timing and how much investments. Here's my 60 day overdue as a percentage of total invested, starting on 1 July 2014, which is similar to the previous levels:
0.7%
1.0%
1.4%
1.8%
2.4%
2.7%
4.5%
5.1%
7.2%
8.4%
Some of this is attributable to the practice of people buying loans after a payment is made before the seller has a chance to change the price. That caused me to stop much of my bad loan selling activity or greatly reduce it, so I wasn't handing windfall profits to people exploiting a poor aspect of the Bondora system. I've done furher adjusting since and do make some sales now, thoughless than before. A big difference is that few of the sales are to people exploiting recent payments to rip me off. I no longer have discounted loans availabe for purchase when payments may show up in the system, removing them and adding them every day when time allows. That cuts selling opportunities but helps to reduce losses due to exploitation.
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duck
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Post by duck on Apr 10, 2015 5:30:37 GMT
james, I have
14.8% of total loans in +60% this equates to 16.7% of my initial investment (stopped adding just over a year ago).
My exchange difference is 15.8% (not weighted perfectly) but certainly just below 16%.
My loan book is quite high risk (!) but that probably/possibly accounts for the differences (I do have a good base of 28% Estonia A1000).
I'm also not happy about selling loans at discount only for them to become live again and be snaffled up before I can take action ...... but I live with it, once I have decided to sell it is either going or it will end up in my +60 day 'bin'. Have you noticed that if you download a full 'investments list' from the beta downloads you can now see loans that you have sold and have subsequently defaulted?
Can't say they are all there (never bothered to check) but during sorting operations I have noticed well known names with defaulted dates against them (and repayments made post +60 days).
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james
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Post by james on Apr 10, 2015 8:45:44 GMT
Thanks. I hadn't noticed that about the full loan list but its' not surprising. Maybe someday I'll see how well I predicted what to sell.
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