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Post by valueinvestor123 on May 31, 2017 12:27:53 GMT
The bad debts rate seems to be all over the place, over the years. Can I ask what the average is and how it compares in terms of risk to, say, Lendy or AC etc? Does a 7% bad debt rate mean that if I invest 100k, I will not see 7k again (or in other words, subtract that %age from the yield, so 11% interest - 7% will leave me with just 4%. This seems extremely low, given the risks). Is it more like FundingCircle in terms of risk profile? (hate this outfit). I am trying to work out whether to unwind or reinvest. The horrible/slow website is from last century and that alone puts me off. The collateral is often questionable and I don't always understand if it's worth anything. Lendy and the likes seem easier to grasp, at least from a quick glance.
Last updated – 30/04/2017
Note Year 2017 2016 2015 2014 2013 2012 2011 2010 Arrears 1 0.00% 0.39% 1.19% 9.56% 0.36% 0.56% 0.00% 0.00% Loans in default 2 0.00% 2.35% 4.88% 11.93% 12.48% 14.91% 8.43% 0.00% Expected loss of actual defaulted loans 3 0.00% 0.55% 3.23% 7.43% 5.11% 7.54% 8.07% 0.00% Expected lifetime bad debt rate 4 2.00% 2.00% 3.50% 7.50% 5.25% 7.65% 8.07% 0.00%
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Greenwood2
Member of DD Central
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Post by Greenwood2 on May 31, 2017 13:23:42 GMT
I think these rates are all lifetime rather than annual, whereas your 11% interest rate is an annual rate, so rather difficult to interpret. Since 2013 my actual written off loans are about 1% and of those in trouble I expect about a 3% loss. Diversification is important, but difficult to achieve with a £1,000 minimum, some lenders have been unlucky with defaults on loans where they held substantial amounts.
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