What's your annual return? | P2P Independent Forum

What's your annual return? Oct 28, 2016 22:32:13 GMT

Quote

Post by TheDriver on Oct 28, 2016 22:32:13 GMT

From another thread:

Oct 28, 2016 20:31:57 GMT pip said:

Oct 28, 2016 19:21:03 GMT Steerpike said:

In just over 13 months I have invested in over 50 loans, overall XIRR 18.69%, excluding promotions and allowing for 50% loss on ABR and LGBBL this comes down to 7.67%, so my experience is not too far off the quoted 8.1%.

Whether 50% allowance is realistic and similar performance will continue is of course still to be seen.

Does the IRR of 18.69% include promotions, otherwise hard to see how such a rate is anywhere near achievable with the rates on offer? Yes 3 of my 21 loans now looks very dodgy, unfortunately 3 of my larger loans too.

Including the intro bonus of £150 for £1000 invested (if you did refer a friend too) should not be used in this calculation as this promotion is no longer valid and should not be used to promote to new customers/encourage investors to invest more.

I just think the claim that investors have earned 8.1% is clearly misleading, when they are using future predicted default rates to say what people earned, when what they actually earned was much lower.

The average interest rate on the loans is around 10% (not scientific but about right), the lending fee is 1%. That only allows for under 1% of repayments to default. Based on current trends an estimate of defaults at 1% seems really hard to justify, when mine are about 20 times this amount (assuming they don't recover which I think so far none which have gone downhill have).

Spot on - I recently calculated a weighted average of average loan rates to be 10.03%!

Interestingly - and perhaps fortunately for LC and their big backers - all the troubled loans are among the smaller ones on the platform, and combined with the fact that the exposure of the much larger number of smaller retail investors is greater in those loans means that the big investors will have barely noticed the proportion of defaults to date. That doesn't help the majority of us who are struggling not go into deficit, or anyone when a large one bites the dust.

Finally - for now - I notice another "estimate of the annual return" figure of 7.2% has popped up on the site!