A bad month?

    If that is the case it will probably be something like -2%.

I've only had one month with a very small negative interest and one with a very small positive interest. The rest have been positive and on average I think I'm not too far below the expected rate, however the continually falling average rate is becoming a concern, Zopa predicted it would level off. Hoping for better things in the next few months (also in plus since the beginning).

I'm kinda lucky I guess in that I have some defaults starting to materialise and some collections gearing up to default but I'm not going to panic too soon in fact i'm not even going to let it bother me at all, i'm relending all returns and interest. I'm of the view that defaults are not always as bad as they seem in that I have quite a few from per-safeguard days (30+ infact) but most of them seem to be paying - albeit very sloooowly. 

Are you able to provide any data on your book perhaps - obviously not in detail but along the lines
(These are plus as classic is protected)

1. average size of loans failing - mine are mainly £10 ones to keep best diversification

2. percentage of loans failing relative to those still good. 1.92%

3. Biggest loan size, smallest loan mine are all £10

4. Are you using current.csv or alltime.csv

Something to help some of us stickier people perhaps.

My own experience is as follows

I have a 5 fig amount in both Plus and Classic - Split 10%/90% and its true Plus is getting interesting I have 2 defaults as moment but 5 collections that look interesting.

My simple return so far is as follows, using xirr, is about 8% but that does drop to 2.84% if the collections all fail. This of course assumes they are full losses - as stated earlier experience so far is that half of my default loss in pre-safeguard is paid up and most are still paying albeit very slowly. Also it might be more fruitful to xirr the return after 2 years but obviously you don;t want to wait that long

That would be my take so far. I would also point out that Plus is a very early lend at the moment - usually loans seem to stabilise after 18 months to 2 years. The danger points seems to 12-18months so there is potentially more to come. I also should point out that I am fully re-investing as well.

I have plus and classic, plus is in £10 chunks. Over the last few months returns have been around 2%, July -2%. Several borrowers have made no repayments and recoveries are minimal. A further 3.5% of loans are in arrears. I have pulled the plug this morning.

davee39 do you know why this is afflicting Zopa and not the others as far as I can see at the moment (for example, AssetzCapital 30 day; Octopus Choice)

I have today also suspended reinvesting repayments into Plus, although I am not selling out for the time being. To help explain why I have produced the following chart.



As I have been re-investing repayments from Classic into Plus I cannot dis-aggregate them, so the chart shows the combined XIRR.  The expected return is calculated from the weighted average of Zopa's own calculated returns for my Classic and Zopa accounts which are currently 4.8% and 6.4% respectively. I started investing in Plus in June 2016 and made lump sum investments in June and August of 2016, all resulting in £10 loans.

As can be seen there is a significant gap between Zopa's expected return and the XIRR. I was prepared to live with this difference until I got the 3 defaults in this month which all came out of the blue because none of them had 3 consecutive missed payments in June. One was in Arrangement which was then put into default even though some payments were continuing. One was an IVA after 2 missed payments, which admittedly is outside Zopa's control.  The most recent was defaulted after only 1 missed payment and a string of full payments going back to June 2016.  So far that's all the comments say, although I am expecting something like an IVA or bankruptcy to appear eventually.

On top of this I calculated my current default rate for June and August 2016 as 8.9% and 6.4% respectively. Although no other month has had more than 1 default, the number of loans is much smaller so I have probably just been lucky. Note that the defaults in the chart are the month of the default and not the month the loan was taken out. 17 of the 21 defaults are from June and August. And all of this is during a relatively benign economic period. Thus I am starting to feel much less confident in the performance of unsecured consumer loans.

Nothing obvious from term or loan purpose. Of the 21 defaults 6 are for Car, 6 are for Home improvements and 5 are for Consolidate existing debts. As expected the risks are mostly D's and E's, though there are 5 C1's. I am assuming at this stage that the lump sums in June and August just mean that there are sufficient loans in those months to give statistically meaningful results. I suppose what we don't know is if Zopa have tightened up their lending criteria since last summer.