My social lending portfolio (2014, November)

November wasn’t a particularly exciting month in social lending. Due to upcoming changes to credit scoring systems in Bondora it seems that there is a kind of an air of expectation from the investors’ side on how the changes will be implemented. The most important point of the change seems to be the fact that returns will likely drop for more selective investors and rise for investors who don’t analyze the data. This potentially means that managing a Bondora portfolio will become much more passive, but time will tell.

2014novOverall November was a good month. A lot of rescheduled loans started paying again, so the interest return for Bondora was once again an all time high, ending up at 71,93€. (6,4 euros more than for October.) December will likely be a slow month due to a lot of payments being pushed into next year, but the 100€ interest goal is coming closer quite quickly.

returnsnovemberIt’s also interesting to see how Bondora compares you to other investors. I’ve always had relatively high returns, the site still shows my returns at 25% but it has now very slowly started to drop, so I’ll have to see how this number starts changing when the new credit group system becomes active.

2014novinvestOverall, I had a lot of loans go out in November. The biggest change was the fact that I actively started to take in B+ loans, and instead of picking them manually I just added a portfolio manager to take in 10 B+ loans every month. Since the amount of loans I’m giving out is slowly increasing every month then diversification starts becoming an issue since I don’t want to put too much money into A1000 loans compared to other loan pieces.

The total for loans given out in November:

40 loans in total (1 Spanish, 2 Finnish, 37 Estonian loans).

Out of the Estonian loans 10 were B+ and 27 were verified.

Out of the verified loans the breakdown was:

– 3xA1000, 3xB1000, 7xC1000

– 4×900, 3×800, 2×700, 5×600.

As you can see, not a particularly great month for 1000 credit group loans. B+ loans have proven themselves over time though, so I’m expecting to let their number increase maybe to 15% of my overall portfolio. Also, defaulted loans are really starting to get some sort of a rhythm when it comes to making payments, about 1/3 of my defaulted loans that are at least half a year old are making some payments so that’s good to see at last.

9 thoughts on “My social lending portfolio (2014, November)

    1. That is quite a quick drop. Though you’re still above 20% for the site calculations so that means things aren’t bad. If you stay hovering at 20% then I’d say the results are still good, I understand that my returns are somewhat of an anomaly.
      Though you can look for reasons for the drop – have you decreased your contributions? Is there currently a bump happening in the number of defaults? Have you started investing into other countries, which have higher rates of delayed payments? Are any of your defaults making payments already, since that helps the return curve stay higher? You did stay in the high 30-s for way longer than my portfolio did, so some volatility is expected.

      1. I did try different countries as well as experimented with bigger contributions, but not in a significant amount and only for a very little time. The bump in defaults (or slump, more accurately) did happen and it could be the result of a couple of the bigger investments defaulting.

        Overall, the more I got into the B+ thing, the more came down the interest percentage. But it’s great fun to try and get it up again!

  1. Hey, I wondered if you could explain more on this, I have not been informed on such changes
    is there a blog where they post those type of info?
    Due to upcoming changes to credit scoring systems in Bondora it seems that there is a kind of an air of expectation from the investors’ side on how the changes will be implemented.

    1. Bondora sent out a newsletter detailing that it will move from the ABC 600-1000 credit group system to the AA A B C D E F HR system that some US sites have. This means that the credit scoring system will get more complicared and investors will likely have less impact on their results (you won’t be handpicking loans the way you do right now.)

  2. mmm thanks a lot, I must have overlooked this newsletter, indeed everything will become more automatic probably, that fits into the huge hike in loans available in the past few months
    I hope they are careful enough not to accept just any applicant because it will be hard to recover defaulted loans in countries such as spain

    1. This is why investors are somewhat worried – there hasn’t been info on how for example country will impact the credit rating (currently you wouldn’t think any Spanish loans would be getting the AA rating.) Another issue is Finland – since no extra fees are paid on delayed loans they shouldn’t be AA loans either. Hopefully there will be more information soon on how this will work.

  3. yeah, one thing to consider in spain as well is that court are becoming increasingly sympathetic to debtors…and they may simply write off many people, having lived in Spain in the past, I know it’s a problem
    Of course when you add 25% unemployment, 50 years home loan (two generations needed to sign), during the “good years” , people were actually adding a car (like BMW and Mercedes mostly) to their home load…meaning they took loans for 50 years…on a car with a life expectancy that’s much lower.

    So…mmm, I still think it can be a gold mine. I mean if you put in 100 000 euros in the platform at 20%, you get about 1000 a month of return
    but if they try to over reach, it can become disastrous

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