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Post by laidbackgjr on Jun 22, 2017 7:46:17 GMT
I suspect that it's an element of randomness between loan books as my stats are Car Loans make up 35% of my loans but only 12% of defaults - my big defaults are consolidating exisiting debt 50% from 30% of my loans and home improvements at 38% from 24% of loans.
I'm sure Zopa monitor the data and use it - but as there is no control over the actual use of the money the purpose needs to be taken with a pinch of salt.
As for secured car loans (leases, HP, PCP etc) that's where the big concern is as there is a worry that the value of the assets is significantly less then the value of debt so if big defaults occur the value of the car will not cover the debt.
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aju
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Post by aju on Jun 22, 2017 9:31:48 GMT
nrw, Is that defaults just in say plus or does it cover defaults in classic as well. I was shocked to see how many defaults were in classic but never actually thought about it as they were covered by SG. The only way to see defaults in classic that have been resolved (closed and paid up) is to look at the default date field in the all time book. Just wondered as reinvested returns will soon be at our expense by December when SG is closed to new loans.
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nrw
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Post by nrw on Jun 22, 2017 13:01:29 GMT
nrw , Is that defaults just in say plus or does it cover defaults in classic as well. I was shocked to see how many defaults were in classic but never actually thought about it as they were covered by SG. The only way to see defaults in classic that have been resolved (closed and paid up) is to look at the default date field in the all time book. Just wondered as reinvested returns will soon be at our expense by December when SG is closed to new loans. I only invest in Z+, so all my stats are Z+. Safeguarding is our enemy / an illusionist. Diversification / solid loan book is our friend.
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aju
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Post by aju on Jun 22, 2017 14:11:17 GMT
nrw , Is that defaults just in say plus or does it cover defaults in classic as well. I was shocked to see how many defaults were in classic but never actually thought about it as they were covered by SG. The only way to see defaults in classic that have been resolved (closed and paid up) is to look at the default date field in the all time book. Just wondered as reinvested returns will soon be at our expense by December when SG is closed to new loans. I only invest in Z+, so all my stats are Z+. Safeguarding is our enemy / an illusionist. Diversification / solid loan book is our friend. Thanks thats interesting. My Z+ account only has 1 default I guess I've been fortunate so far, however I have 3 collections that will be defaulted next month I think if payments are not made. Only 2 of the potentials are cars though. Not including my new ISA - just started to lend - my current Zopa+ is only 10% of my zopa investment. My classic account is a much larger affair of nearly 2500 loans over a number of years. Whilst defaults are resolved at the moment when I go Core later and in my core ISA defaults will have an effect on me. In those almost 2500 loans the classic stats are as follows for cars and defaults... 2452 classic loans ( 1551 remain active) 0872 car loans 0086 defaults/closed( SG paid out) 0011 cars defaults/closed (SG paid out) so for me ... 35% of all loans were marked as car loans (perhaps not used as car loan though) 3.5% of all loans defaulted but were paid by the SG <half percent of car loans defaulted. Not sure i'll lose much sleep over car loans at the moment but as you say times may change if the climate changes. I think I'm right in thinking the interest rates on Zopa loans are fixed for the duration of the loan, so interest rate changes may not have a large direct effect at the zopa loan level. Indirectly interest rate effect on other things may make it harder for borrowers that may cause loans to have a higher potential for default. In a total book since 2006 though - most of my defaults are in pre-safeguard loans - I have 30+ of these and most are still paying only 4 have settled i.e. Bankrupt and lost funding - even then some had good interest rates to offset some of this. Just some of my thoughts
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