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.
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.