Hi Saamee, what borrower's details you look for to not invest in a loan apart from the % rate offered. Anything specific that puts u off? Just trying to learn from you.
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Hi again 'AK'
Really just the usual poteential warning signs.... such as:
~ Renting not Owning a home
~ Time in stable employment ( less than 2 years I apply caution )
~ # of recent Credit Enquiries
~ Area of the country - ie likely Rural jobs vs big city jobs
~ Time at address
So trying to work out how stable a person may be - of course at the end of the day it's all supossition.
Your mind tells you things like, has this person just got out of prison ( renting less than a year with both job and address ) or is it that they have had a marriage split up and it's a new strart ( we've all been there! )
Having said all of the above, my 1 year track record with LC is NO WRITE OFFS and currently NO ARREARS.
You've got to give it to the LC Team that they pick their customers, which are our Borrowers very well.
No worries..... Right now the P2P community in NZ is SO small... Any information shared that goes towards building confidence with others should be put out there. When I speak to others about the 'Real Benefits' of P2P lending in NZ I find I get this glazed, non interested look and always with the words "Oh I can't afford to loose any of my money".......
LC just updated the montly NAR ( Net Average Returns ).
Currently getting 13.86%
I am still drip feeding into my account, but I have just got my first NAR at 12.1%. I aim to invest along the lines of:
36mth A1: $0
60mth A1: $50
A2: $100
B1: $150
B2: $50/$100 on scrutiny of length and quality of credit history, residence and occupation
I have few B2's as the email/text alerts seem to arrive when I am in meetings or driving - and when I am in a position to act on them, they have often been filled.
I am not clear on a point with credit history: where a borrower has no defaults but still scores only a good (not excellent) rating, does that mean that the borrower may have had defaults older than 2 years?
A credit score of good does not necessarily mean they have had old defaults.
I guess all these p2p type finance companies operate there own algorithms to determine credit scores. It is probably different to each company and kept secret like the KFC recipe.
I would assume that numerous factors are considered and then weighted to give an internal score which represents a overall credit score .
Defaults like what you mention new and old are probably only one factor in the overall score. Maybe you get a higher score if married or owning an own home, being in a job or house long-term etc
Hope that helps.