Author Topic: Defaults and Late Payments  (Read 1915 times)

edward

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Defaults and Late Payments
« on: May 23, 2013, 09:49:22 PM »
http://www.learnbonds.com/peer-to-peer-loan-defaults/

Regardless of the number of times top members of this forum have tried to make defaults and late payments seem less scary, this article finally said it in a way that I finally understood:  it's the very transparency of late payments and defaults that make them stand out in P2P. Same things occur in a mutual fund but because we don't get an announcement of each and every one, we just don't notice it. It's the overall performance of the funds that most of us watch, not each and every movement. Of course proper use of Folio can help for those seriously bad notes, but maybe now I won't freak each and every time one of my notes is late paying and I can feel better about my overall performance.

Fred

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Re: Defaults and Late Payments
« Reply #1 on: May 23, 2013, 11:43:16 PM »
LC provides an excellent (IMO) article comparing 5-yr performance of P2P lending vs. High Yield Bond vs. Stocks here:
http://blog.lendingclub.com/2012/11/07/five-year-review-lending-club-notes-outpace-stocks-and-bonds/

LC numbers take into account the "defaulting Member Dependent Notes and servicing fees and presuming reinvestment of all principal and interest payments."

Past performance is no guarantee of future results.