Author Topic: Around what age do loans entering into default status start to peak?  (Read 5486 times)

American in Busan

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With all the incredible smart guys running these 3rd party analysis sites, I'm surprised this analysis hasn't been done yet. I have no idea if this would be a normal distribution, or even bi-modal perhaps. I'm also curious to know if there are significant differences in the default timing/behavior of different types of loans, etc.

Though lately I've been suspecting that the macroeconomy has the biggest hand in loan performance, period.

Randawl

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Re: Around what age do loans entering into default status start to peak?
« Reply #1 on: February 21, 2013, 10:16:10 PM »
I believe Anil posted and discussed some charts regarding this some time ago.  If I recall correctly, lates/defaults peak around 10 months and begin to decline thereafter. 

brycemason

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Re: Around what age do loans entering into default status start to peak?
« Reply #2 on: February 22, 2013, 10:12:36 AM »
I have many principal loss curves posted, some on my site. Look at the steepest parts Of the curves and the associated month.

Cliff_S

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Re: Around what age do loans entering into default status start to peak?
« Reply #3 on: February 22, 2013, 10:46:45 AM »
While this response does not get down in the weeds like you are asking, I did notice when I was poking around on the Prosper site that they advertise “Seasoned Returns.”  Prosper states, “Our research shows that Prosper Note returns historically have shown increased stability after they've reached ten months of age. For that reason, we provide "Seasoned Returns", defined as the Return for Notes aged 10 months or more.”  While it does not specifically state it, my assumption is that the increased stability is the result of decreased default rates and that LC loans likely follow a similar pattern.  Again, looks across the whole spectrum of loan types but hopefully provides some insight.

American in Busan

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Re: Around what age do loans entering into default status start to peak?
« Reply #4 on: February 23, 2013, 08:08:00 PM »
I have many principal loss curves posted, some on my site. Look at the steepest parts Of the curves and the associated month.

Your website is not in your profile, and I don't know who you are. Is it interest radar? Can you link me?

Zach

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Re: Around what age do loans entering into default status start to peak?
« Reply #5 on: February 23, 2013, 08:38:28 PM »
I have many principal loss curves posted, some on my site. Look at the steepest parts Of the curves and the associated month.

Your website is not in your profile, and I don't know who you are. Is it interest radar? Can you link me?

His website is p2p-picks.com

Randawl

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Re: Around what age do loans entering into default status start to peak?
« Reply #6 on: February 23, 2013, 08:43:48 PM »
Your website is not in your profile, and I don't know who you are. Is it interest radar? Can you link me?

Our friend Bryce runs p2p-picks.com.

The graphs I remember looking at, however, were somewhere on andirog.blogspot.com, which is run by Anil.  He is always researching and posting interesting graphs and facts.  I don't have the time at the moment to hunt them down but they're there somewhere.  Hope this helps.

American in Busan

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Re: Around what age do loans entering into default status start to peak?
« Reply #7 on: February 23, 2013, 09:10:21 PM »
Thanks guys! I'll find and compare graphs on both sites.

edit: nevermind, the search function is atrocious...
« Last Edit: February 23, 2013, 09:12:08 PM by American in Busan »

AnilG

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Re: Around what age do loans entering into default status start to peak?
« Reply #8 on: February 24, 2013, 01:18:54 AM »
I recall briefly mentioning about this topic in one of my old blog post. Unfortunately, I can't recall and find that post myself. :-( But I am currently working on much more detailed analysis on when loans enter different loan status. I plan to start publishing a series of blog posts in a few days based on this analysis.

If you want to see when loans meeting your loan strategy may start to be charged off, you can potentially check your filter's historical performance on PeerCube. The key data point is the % principal paid back for loans that defaulted. For the whole population of loans issued between 2006 and 2009, I believe on average defaulted loans only paid back 50% of the principal.
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Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

Xenon481

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Re: Around what age do loans entering into default status start to peak?
« Reply #9 on: February 24, 2013, 02:42:36 PM »
Here are the late loan curves for Prosper 1.0 before the SEC registration.





source: http://fred93blog.blogspot.com/
The Motley Fool says to Avoid Prosper Like The Plague.

Read about historical Prosper actions/problems at Prospers.org

AnilG

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Re: Around what age do loans entering into default status start to peak?
« Reply #10 on: February 27, 2013, 03:58:51 PM »
I published a blog post this morning on the analysis of Lending Club loan defaults as a function of number of monthly payments made by borrower. It appears half of defaults occur by the time borrower had made ten monthly payments. More in my blog post Lending Club Loans - Months of Payment before Default http://andirog.blogspot.com/2013/02/lending-club-loans-months-of-payment.html
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Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com