Harmoney

[Darchie]

No .. as in i have 49 loans written off
32 had 1 enquiry
9 had 2 enquiries
2 had 3 enquiries and
6 had 4 enquiries

[RMJH]

Been looking at charge-offs on my loans over 12m old (close to 3000 loans so good sample size). Average recovery of principal on charged-off loans was 11% so those that went bad did so quickly which supports the 80% within 18 months rule of thumb. If anything they go bad sooner. Not sure if these will show but also attached a couple of graphs of charge-offs by grade on my book. Pretty much within expected levels I would say.

[RMJH]

Should point out that 60% of the loans got repaid early so charge-off % of the remainder was much higher.

[Paddles]

I invest in B-E with 29% D rated and 18% E rated. Looking at the chart attached of loans issued/arrears and charge offs it would appear E rated loans have a better risk reward than D rated.

[myles]

it would appear E rated loans have a better risk reward than D rated.

?

Charge off rate for D: 11369743 / 154763275 * 100 = 7.35% (Interest rate ~ 25.55%)
Charge off rate for E: 6586033 / 57642825 * 100 = 11.43% (Interest rate ~ 27.84%)

This is my current return (but it will be different for everyone - minimum tax rate):

returns.jpg

[Paddles]

Thanks Myles.

I'm thinking that if I am selective with lending criteria for E rated loans I can mitigate the charge offs to some extent?
i.e. Home owners, with min 3+ years current employer and payment to income >10%?

[CageyB]

Thanks Myles.

I'm thinking that if I am selective with lending criteria for E rated loans I can mitigate the charge offs to some extent?
i.e. Home owners, with min 3+ years current employer and payment to income >10%?

In my (admittedly anecdotal and not data-driven) experience, just avoiding E's for buying cars (and especially boats) will eliminate a disproportionately large number of charge-offs. For what it's worth I'm at 14% RAR and I've been in for almost three years now. I don't touch F's, however.

[Skene]

Hi all,

Has anyone else experienced a sharp increase in charge-offs since April 1st (closure of Retail lending)?

My charge offs are now 3 times higher than March 31st.

Given the collection process timeline I don't believe this would be a reflection of Covid-19 related defaults.

[Saamee]

[QUOTE=Skene;807290]Hi all,

Has anyone else experienced a sharp increase in charge-offs since April 1st (closure of Retail lending)?


Personally....... NO..... ( Not as Yet!! )

[Soolaimon]

[QUOTE=Saamee;807294]

Hi all,

Has anyone else experienced a sharp increase in charge-offs since April 1st (closure of Retail lending)?


Personally....... NO..... ( Not as Yet!! )

Cant say I have seen an increase in charge offs but there are a lot in the wings if one looks closely at the arrears. Also, as I have been in full withdrawal for a year or more I have noticed a slow down in repayments since the last week of March. I guess this is to be expected.