Data galore. How many borrowers have a mortgage and went to university?

Recently, we have released several posts that explore the origination of loans by unique data like home ownership, education, employment duration and more. This month, we’re going to do the same and compare how this has changed in comparison to the previous months.

Average income, loan amount and age

In January, the average net income figure increased across the board with the largest absolute increase seen in Spain. If you compare this data with our recent post on the share of credit grading’s per country, it is evident that income is not the only factor in determining the expected default rate when comparing Estonia and Spain respectively (For example, there is a much higher share of lower risk rated loans in Estonia than in Spain).

avg-net-income-january-2018

Along with the increase in the average net income, the same is visible in the average loan amount. In absolute terms, the highest increase was in Estonia.

avg-loan-amount-january-2018

The average age of borrowers has changed slightly since December in Spain and Finland, however overall we commonly see the figures fall within the early to late 40’s range.

avg-age-january-2018

The average loan duration in January was higher in Estonia, lower in Spain and the same in Finland. For a more representative indicator, take a look below at the most common durations.

avg-loan-duration-january-2018

Loan and employment duration

Traditionally, Bondora has not focused on issuing short term loans and this is still clearly visible from the most recent data. Only one loan in Spain was issued with a loan term of 3 months, whereas the majority of loans issued had a duration of 36 months or above. More specifically, the most common loan duration across all countries was 36 months, followed by 60 months and 48 months. Offering the option to take a loan with a duration of up to 60 months allows borrowers to have affordable monthly payments that they can budget for, along with their other expenses.

loan-durations-january-2018

Employment duration remains the same as previous months, with ‘More than 5 years’ being the most common followed by ‘Up to 5 years’ and ‘Up to 1 year’. This suggests that those who are confident in the stability of their employment (and ultimately their monthly income) are most likely to apply for a loan.

employment-duration-january-2018

Education and home ownership

Similarly to last month, the total most common type of education declared by borrowers is of a High School standard, followed by University, Vocational School and Junior High School. Per country, the figures show a different story; In Estonia the most common is still High School, however in Finland Vocational School is top and University in Spain. Whilst education curriculums and institutions also vary by country, it provides an interesting observation when compared with the other data points.

education-january-2018

The most common home ownership status in Estonia and Finland is ‘Owner’, in comparison the most common in Spain is ‘Tenant’. In previous months, ‘Living with parents’ has always been the most common in Spain so it will be interesting to see if this trend continues. Home ownership status can give us an insight in to the cultural differences between different geographies and how this can influence the wider economy. For example, in Finland only 5 borrowers were registered as ‘Living with parents’. In Estonia, just under half of all borrowers are owners of their home.

home-ownership-january-2018

Verification

The data below shows how many customer’s income and expenses have been verified. Regardless of whether the borrower’s income has been verified, the background checks with population and credit referencing agencies are still conducted. Overall, the total number of customers classed as verified are higher than those classed as unverified.

verification-type-january-2018

Which data point is the most important?

The individual risk of issuing a loan to a borrower is calculated using all of the parameters above and many more. The self-reported data which is displayed to investors is typically not very predictive and has relatively little influence on the Bondora rating of a particular loan. Therefore, this information should not be viewed as the only data used in determining the expected default rate of a loan.

Overall, this post can give you a great idea of the basic profile of our borrowers and how this changes with the origination of loans in the coming months. Leave us a comment below and let us know which data points you think are the most influential in credit scoring.

At 2.85%, HR rated loans had the lowest share in January

Welcome to the monthly origination post for January, here we go in to detail about the distribution of investments that were made and some interesting stats per country of origin. If you missed December’s post, you can check it out here. The total amount invested through the platform in January was €3,542,447, a 23.5% increase since December. December showed the lowest figure invested since July, although this was expected over the festive period as people tend to use their money for other purposes at this time. At the time of writing, we now have 33,078 investors.

Loan Origination by Country

While the distribution of investments by geography were similar to the previous months, there were some slight changes. Estonia still has the highest share of investments at 63.5% although this decreased from 65.29% in December. The total share in Spain for the month stood at 8.1% which also saw a small reduction compared to the end of 2017. The reductions in investments in both Estonia and Spain led to higher number of originations in Finland last month at 28.4% of the total share, a 3.17% increase.

Along with the changes in the total share, the total weighted average interest rate across each region increased.

loan origination by country january 2018

 

loan origination by country december 2017

Share by rating, country and amount

The table below contains the weighted average interest rate, total amount and share per country of origination and rating. Here are some key takeaway’s we can see:

  • Loans graded with a ‘C’ rating account for the highest share of investments at 21.13% of the total, closely followed by ‘D’ rated loans at 17.37%.
  • ‘HR’ rated loans had the lowest number originated at 2.85% of the total share, a reduction of 1.33% since last month.
  • 78.3% of loans originated in Spain are rated F and HR, in December this figure was 72.5%
  • Finnish ‘F’ rated loans account for the highest share in the country’s total originations at 35.71%.
  • The lowest average interest rate across all countries was seen in ‘AA’ rated loans in Finland 9.61%

loan origination by rating country amount january 2018

What conclusions can you draw from this data? We would love to hear them, leave us a comment below and let us know.

Bondora’s portfolio performance by quarter, year and country

Welcome to another data blog post from Bondora, below we take a look in to the actual and targeted net returns from investments by country, year and quarter. It’s important to note that the most recent quarter will nearly always show a higher return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment, this is why we discuss data that is specifically over 12 months old below.

We have marked the figures with three different colours, firstly light orange to represent less than 50 loans issued, light blue for 51 – 200 and white for 201+. This is a great way to spot anomalies, such as high volatility in low risk ratings.

Key takeaways

  • Across all countries, the best performing quarter so far was seen in Q1 of 2016 at 16.22%, 2.49% above the target.
  • The most common credit rating of loans issued in Spain has historically been HR, with nothing above a C rating allocated since Q2 of 2015 (Which totalled under 50 loans altogether).
  • C rated loans in Estonia are the only credit grading which have been issued over 200+ PCS each consecutive quarter since 2015.

Actual and targeted net returns across the board by year

Across all countries and risk ratings, the highest actual net return was seen in 2010 at 29.72%. As mentioned above, it’s important to note here that the most recent data will nearly always show a high return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment. Older data, for example 2009 – 2012, is showing as having the highest return as loans from this period may still receive a cash flow from recovery payments. This reinforces how you can maximise your absolute return in P2P by taking a long term view with your investments.

portfolio-performance-yearly-january-2018

Today, approximately 99% of investments are made automatically and hassle-free via our Portfolio Manager and Portfolio Pro features, both of which are completely free to use for all investors. When you choose either strategy, you will be given an indication of the distribution of your investments by country and risk rating.

Actual and targeted net returns across the board per quarter

  • Overall, the average actual net return across all quarters comes in at 13.61%, slightly below the target average of 14.76%.
  • The best performing quarter in 2015 was Q4 at 13.26%, in 2016 this was Q1 at 16.22%.

portfolio-performance-quarterly-january-2018

Estonia

  • When looking at the total actual return across all credit ratings, the actual return has been higher than the target in every quarter but one (2015 Q2).
  • In Q2 of 2015, the actual interest rate achieved for HR loans was 15.67% (7.95% below the target) however this was only from a sample of 5 loans.
  • For data over 12 months old, the best performing quarter was Q1 of 2016.

portfolio-performance-EE-january-2018

Finland

  • Only a small percentage of Finnish loans issued total over 200 PCS, most recently in Q3 of 2017 this was seen in F & HR ratings.
  • The actual return figure for Q4 of 2016 B rated loans shows a rate of -39.77%, however the data is significantly skewed due to less than 5 loans being issued.
  • In Q1, Q2 and Q3 of 2017, the HR rating had the highest number of PCS issued overall.

portfolio-performance-FI-january-2018

Spain

  • Q3 of 2017 saw the highest number of HR loan PCS issued in Spain at 1,721.
  • The highest total actual return figure over 12 months old was seen in Q4 of 2016 at 22.68%.
  • Volatility is expected in credit ratings with a higher expected default rate, which is why we always encourage a diversified portfolio of investments.

portfolio-performance-ES-january-2018

Remember, to maximize your net return you should view investing with Bondora as something long term.

Portfolio Pro breaks another record

Welcome to another post from our monthly funding statistics series. Here, we talk about the most popular investment methods used by our customers in January and how this has changed since the previous month.

funding-in-january-2018

funding-in-december-2017

Following December’s trend, Portfolio Pro has continued to storm ahead and the percentage of investments made through the tool have increased again. Now standing at 41% of the total investments, the Portfolio Manager has decreased in line with this and accounts for 58% of the total, 2% less than December. A possible explanation for this is investors have decided to become more active with their investments strategy and trial Portfolio Pro in the new year.

If you’re still unsure of the difference between the two, here’s a brief summary:

Portfolio Manager – Simply select a strategy ranging from ultra-conservative to opportunistic, deposit funds and you’re ready to go. No further management is required as the Portfolio Manager takes care of everything for you. If you want to leave a certain amount of cash on your account that won’t be invested, go in to your settings and adjust the Spare Cash Balance slider to your desired amount. It’s easy!

portfolio-manager-strategy

Portfolio Pro – Now you have more control. Select the risk ratings you want to invest in (ranging from AA – HR), select which countries, your preferred loan durations and it’s done. If you wish, you can also add a few more rules like the range of interest rates applied to the loan and also the bid size. We will then give you an expected return range along with the distribution you can expect across your selected filters.

portfolio-pro-filter

For a further comparison between the two, check out our video on the topic here.

The percentage of investments made through the API stayed static at 1% of the total, due to the technical skills required for this option we do not expect to see this fluctuate on a monthly basis, as seen with the other investment options.

What is your favourite method? Let us know in the comments below.

December’s Secondary Market stats, Portfolio Manager prevails

Welcome to December’s Secondary Market statistics blog post. Recently, we talked about the most common methods used to purchase current, overdue and defaulted loans and whether these transactions were made at a premium, discount or par value.

Below, we are going to do the same based on the statistics received in December.

Current loans

API Manual Portfolio Manager Total
Discount €14,957.09 €10,875.80 €3,766.99 €29,599.88
Par €89,168.06 €58,071.51 €576,002.58 €723,242.15
Premium €40,160.10 €85,533.45 €0 €125,693.55
Total €144,285.25 €154,480.76 €579,769.57 €878,535.58

In line with previous months, the Portfolio Manager still leads the way in purchasing current loans at a par and discount value. Last month, the API came in second however this has now been overtaken by the manual option. The total amount of current loans purchased on the Secondary Market decreased only very slightly this month by €1,946.

You will notice that the Portfolio Manager has not invested in any loans with a premium. As a reminder, the Portfolio Manager only purchases loans that are current and priced at either a discount or par value.

Overdue loans

API Manual Portfolio Manager Total
Discount €2,227.93 €12,770.59 €0 €14,998.52
Par €368.72 €3,586.43 €0 €3,955.15
Premium €195.77 €2,543.64 €0 €2,739.41
Total €2,792.42 €18,909.66 €0 €21,693.08

In December, the number of overdue loans purchased on the Secondary Market decreased quite significantly by over 41%. Over 87% of these purchases were completed manually, nearly 7 times as many as via the API feature.

Defaulted loans

API Manual Portfolio Manager Total
Discount €1,353.15 €37,068.02 €0 €38,421.17
Par €0.80 €5,716.20 €0 €5,717.00
Premium €0.63 €13,612.71 €0 €13,613.34
Total €1,354.58 €56,396.93 €0 €57,751.51

While the total amount of purchases of defaulted loans has increased by over €7,000, the total amount completed manually has risen by 15.2%. In October, €164 of defaulted loans were purchased at a premium, in November this figure was much higher at €1,061, in December the number multiplied by nearly 13 at €13,612. A unique strategy used by some investors is to purchase defaulted loans with a significant discount with the plan to reap the rewards once the collection and recovery process begins to generate a cash flow.

It’s important to remember that buying loans at a premium can have a negative impact on your overall net return.

Bringing it all together

API Manual Portfolio Manager Total
Total Secondary
Market Purchases
€148,432.25 €229,779.75 €579,769.57 €957,981.57

Good to know

Selling your loans can result in a loss of the original principal, as the secondary market typically does not provide a high enough premium for current loans to compensate for the non-performing part of the portfolio. Therefore, we advise to proceed with caution and not to try and sell everything at once if you see a percentage of your portfolio in default. It is likely that you will quickly sell the performing part of your portfolio and be left with the loans in recovery, significantly damaging your expected return.

The speed of the sales process depends on the market demand. In general, current loans are more liquid and will usually be sold within a day if sold at par value or a slight premium. Delinquent loans may take more time or the sale can be unsuccessful. As soon as another investor has purchased your loan, you will receive the funds directly to your Bondora account.

If you’re still unsure how to sell your loans, you should always get in touch on investor@bondora.com and have a chat with one of our experienced Investor Relations Associates who will walk you through it step by step.

Which type of investor are you?

Welcome to another post from our monthly funding statistics series. Here, we talk about the most popular investment methods used by our customers in December and how this has changed since the previous month. This month, we’ve also got some statistics to share on the total figures for 2017.

funding-by-product-november-2017

funding-by-product-december-2017

After seeing the share decrease for the first time in November, December has seen the share of investments made using Portfolio Pro increase to its highest figure to date at 38.6%. In line with this, the share of investments through Portfolio Manager decreased by approximately 5%. The API share also increased in December by 0.02%. Let’s take a look at how these figures compare to the 2017 totals.

funding-by-product-2017-total

The overall funding statistics for 2017 show a significant difference to the most recent months. Why? Well, Portfolio Pro was only launched in July 2017 so the data may not be as representative of the recent trends. However, it is reasonable to suggest based on all the statistics that the highest percentage of investors can be classified as passive (Portfolio Manager) and like to set up their investments with no further management or time required. The next most common type of investor is semi-active (Portfolio Pro), it’s likely they have a specific strategy and target planned so they filter their investments by country, rating, interest rate and more. The final and least common type of investor can be considered as the professional (API) – they either have a technical background or have invested significant time to learn how to build their own API.

Which type of investor are you? Leave us a comment below and let us know.

The youngest borrowers are in Estonia

Recently, we released several posts that have explored the origination of loans by unique data like home ownership, education, employment duration and more. This month, we’re going to do the same and compare how this has changed in comparison to the previous months.

Average income, loan amount and age

Let’s first remind ourselves of some of the figures from November.

origination-profile-november-data

This month, the average net income in Estonia slightly increased while the average loan amount decreased by nearly €166. In Finland, the average net income increased by approximately 8% and the average loan amount also increased by 4%. The trend in Spain was lower for both data points, the average net income decreased by nearly 7.5%, at the same time the average loan amount decreased by over 6%.

average-income-december

average-loan-amount-december

In December, the average duration across each country was grouped much closer than previously, ranging from 42 – 45 with Spain showing the shortest and Estonia the longest. The difference in average age was slightly higher this month, ranging from 39 in Estonia to 47 in Finland.

average-age-december

Loan and employment duration

December has shown the same pattern as November and October for loan duration, with 36 months being the most common, followed by 60 months. Employment duration also followed suit with ‘More than 5 years’ being the most common, followed by ‘Up to 5 years’ and ‘Up to 1 year’. This would suggest that people who are more confident in the continuation of their employment and the stability of their income are most likely to apply for a loan.

Loan durations Estonia Spain Finland
3 3 1
6 7 2
9 11 1
12 18 4
18 15 5 3
24 34  – 2
30 9  –
36 635 166 190
48 57 33 35
60 466 40 70
Employment duration All countries
Trial Period 13
Up to 1 Year 346
Up to 2 Years 65
Up to 3 Years 52
Up to 4 Years 37
Up to 5 Years 455
More than 5 Years 731
Retiree 69
Other 39

Education and home ownership

Overall, the most common type of education declared by borrowers is of a High School standard, followed by University, Vocational School and Junior High School. However, this varies significantly by country, in Estonia the most common is High School where as in Spain it is University level and in Finland, Vocational School.

Education level Estonia Spain Finland
Junior high school 164 32 43
Vocational 177 31 119
High school 595 65 59
University 319 124 79

The most common home ownership status in Estonia and Finland is ‘Owner’, in comparison the most common in Spain is ‘Living with parents’. In Finland, only 2 borrowers were registered as living with their parents, this shows how different social factors can vary significantly between the countries we operate in and why it is important to look at a number of different data points to get the full picture.

Home ownership status Estonia Spain Finland
Owner 605 51 119
Owner Mortgage 113 64 71
Living with parents 212 71 2
Tenant 255 54 90
Council house 9 1 8
Other 61 11 10

Verification

The data below shows how many customer’s income and expenses have been verified. Regardless of whether the borrower’s income has been verified, the background checks with population and credit referencing agencies are still conducted. Overall, the total number of customers who were verified is higher than those classed as unverified.

Income Estonia Spain Finland
Verified 597 231 260
Unverified 658 21 40

Which data point is the most important?

The individual risk of issuing a loan to a borrower is calculated using all of the parameters above and many more. The self-reported data which is displayed to investors is typically not very predictive and has relatively little influence on the Bondora rating of a particular loan. Therefore, this information should not be viewed as the only data used in determining the expected default of a loan.

Overall, this can give you a great idea of the basic profile of our borrowers and how this changes with the origination of loans in the coming months. Leave us a comment below and let us know which data points you think are the most influential in credit scoring.

The stats are in! An 8 figure sum was invested in Bondora in 2017

Welcome to the monthly origination post for December, here we go in to detail about the distribution of investments that were made and some interesting stats per country of origin. If you missed November’s post, you can check it out here. The total amount invested through the platform in December was €2,867,314, the lowest figure since July. This reduction was expected over the festive period, as many people are buying presents and travelling to visit family and friends.

The total amount invested in the platform in 2017 alone was €34,960,392, this is an impressive increase of nearly 23% compared to 2016. The number of investors at the time of writing has also increased up to 31,798.

Loan origination by country

December followed a similar pattern to November, where the highest number of originations were seen in Estonia. While the share in relation to the total investments decreased here, there was a slight increase in Spain and Finland. When comparing the December originations to the summary for 2017, it’s clear that the interest rates in Spain and Finland are much lower, suggesting a smaller percentage of investors are choosing to invest in higher risk loans as part of their overall strategy in the most recent months.

Share by country – December 2017
Country Interest Amount Share
ESTONIA 21.65% €1,872,190 65.29%
SPAIN 58.90% €271,709 9.48%
FINLAND 36.53% €723,415 25.23%
Share by country – 2017 Totals
Country Interest Amount Share
ESTONIA 20.91% €23,346,618 66.78%
SPAIN 96.40% €4,784,894 13.69%
FINLAND 46.03% €6,828,880 19.53%

Share by rating, country and amount

The table below contains the weighted average interest rate, total amount and share per country of origination and rating. Here are some key takeaway’s we can see:

  • Loans graded with a ‘D’ rating account for the highest share of investments at 18.77% of the total share, closely followed by ‘C’ rated loans at 18.15%.
  • ‘HR’ rated loans had the lowest number originated at 4.18% of the total share, an increase of 0.33% since last month.
  • 72.5% of loans originated in Spain are rated F and HR.
  • Estonian ‘C’ rated loans account for the highest share in the country’s total originations at 24.28%.
  • The highest average interest rate in Estonia was seen in ‘E’ rated loans at 34.91%
Share by country and rating – December 2017
ESTONIA SPAIN FINLAND
Rating Interest Amount Share Interest Amount Share Interest Amount Share
AA 9.90% €182,033 6.35% 8.91% €37,008 1.29%
A 11.92% €165,851 5.78% 11.47% €33,534 1.17%
B 15.13% €407,017 14.20% 14.61% €49,248 1.72%
C 20.91% €454,506 15.85% 23.12% €6,003 0.21% 21.56% €59,928 2.09%
D 29.68% €392,439 13.69% 29.68% €17,084 0.60% 28.16% €128,543 4.48%
E 34.91% €270,344 9.43% 37.95% €51,599 1.80% 37.03% €135,972 4.74%
F 55.30% €121,233 4.23% 50.20% €234,977 8.20%
HR 88.32% €75,790 2.64% 73.52% €44,205 1.54%

What conclusions can you draw from this data? We would love to hear them, so please leave us a comment below.

The lowest actual return in Bondora’s history is 9.35%

Welcome to another data blog post from Bondora, below we take a look in to the actual and targeted net returns from investments by country, year and quarter. It’s important to note that the most recent quarter will nearly always show a higher return as the loans have only recently been issued and at this point the interest element accounts for a high percentage of the total payment, this is why we discuss data that is specifically over 12 months old below.

We have marked the figures with three different colours, firstly light red to represent less than 50 loans issued, light blue for 51 – 200 and white for over 201. This is a great way to spot anomalies, such as high volatility in low risk ratings.

Key takeaways

  • The lowest annual actual net return across all countries and risk ratings in Bondora’s history was 9.35% in 2014.
  • In Estonia, the best performing quarter was seen in Q1 of 2016 at 19.07%, 4.28% above the target of 14.79%.
  • Only a small percentage of Finnish loans issued total over 200 PCS, most recently in Q3 of 2017 this was seen in F & HR ratings.

Actual and targeted Bondora net returns across the portfolio per quarter

  • Overall, the average actual net return across all quarters comes in at 13.99%, slightly below the target average of 14.76%.
  • The best performing quarter in 2015 was Q4 at 13.51%, in 2016 this was Q1 at 16.7%.

portfolio-performance-returns-quarter-december-2017

Actual and targeted Bondora net returns across previous years

Across all countries and risk ratings, the lowest actual annual net return in Bondora’s history is 9.35% which was in 2014. When looking at the table below, you can see that this figure is influenced heavily by the expansion in to new locales such as Slovakia and the performance of Spanish loans. In 2014, there was no risk scoring or pricing set by Bondora, so investors were actually pricing the loans themselves via auctions.

portfolio-performance-data-returns-9-years

Today, approximately 99% of investments are made automatically and hassle-free via our Portfolio Manager and Portfolio Pro features, both of which are completely free to use for all investors.

Estonia

  • In Q2 and Q3 of 2017, less than 50 F rated loans were issued per quarter.
  • The best performing quarter was seen in Q1 of 2016 at 19.07%, 4.28% above the target of 14.79%.
  • When looking at data over 12 months old and with over 200 loans issued, the highest performing rating was F rated loans in Q2 of 2016 with a return of 25.1%.

portfolio-performance-data_EE-december-2017

Finland

  • Compared to Q2, Q3 of 2017 saw the number of loans issued with B & C ratings increase to over 50 PCS.
  • Only a small percentage of Finnish loans issued total over 200 PCS, most recently in Q3 of 2017 this was seen in F & HR ratings.
  • The best performing quarter (over 12 months old) was Q1 of 2016 at 15.16%, 2.54% above its target of 12.62%.
  • The actual return figure for Q4 of 2016 B rated loans ia -36.87%, however the data is significantly skewed due to less than 5 loans being issued.

portfolio-performance-data_FI-december-2017

Spain

  • Across all but one quarter since Q1 of 2015, we have seen over 200 loans issued each quarter in HR ratings. The highest number being in Q3 of 2017 at 1,721 PCS and this has not decreased below 400 PCS since Q4 of 2015.
  • The best performing quarter in Spain (over 12 months old) was seen in Q1 of 2016 at 24.59%, 10.21% above the target of 14.38%.
  • Volatility is expected in credit ratings with a higher expected default rate, which is why we always encourage a diversified portfolio of investments.

portfolio-performance-data_ES-december-2017

Remember, to maximize your net return you should view investing with Bondora as something long term.

November Secondary Market stats, an increase of 7% in purchases

Welcome to November’s Secondary Market statistics blog post. Last month, we talked about the most common methods used to purchase current, overdue and defaulted loans and whether these transactions were made at a premium, discount or par value.

Below, we are going to do the same based on the statistics received in November.

Current loans

API Manual Portfolio Manager Total
Discount  €11,571 €4596 €3,556 €19,723
Par €93,509 €73,931 €503,192 €670,632
Premium €42,525 €147,601 €0 €190,126
Total €147,605 €226,129 €506,748 €880,481

Similarly to October, the Portfolio Manager is the reigning king when it comes to purchasing current loans on the Secondary Market. The total amount of Secondary Market purchases have increased by over 7% since the previous month, we can also see that the API has overtaken the manual investing option in purchasing current loans at par value.

You will notice that the Portfolio Manager has not invested in any loans with a premium. As a reminder, the Portfolio Manager only purchases loans that are current and priced at either a discount or par value.

Overdue loans

API Manual Portfolio Manager Total
Discount €2,336 €15,494 €0 €17,830
Par €747 €9,796 €0 €10,543
Premium €392 €1,826 €0 €2,218
Total €3,475 €27,116 €0 €30,591

When looking at overdue loans, the manual selection option is certainly the most popular. The table above shows nearly 8 times as many investments were completed manually compared to the API, suggesting that investors without the technical skills are still able to identify loans based on their own unique selection criteria. This trend is the same as October.

Defaulted loans

API Manual Portfolio Manager Total
Discount €1,297 €34,442 €0 €35,739
Par €3 €13,426 €0 €13,429
Premium €0 €1,061 €0 €1,061
Total €1,300 €48,929 €0 €50,229

Compared to October, the number of defaulted investments bought manually with a premium has increased by over ten-fold. A unique strategy used by some investors is to purchase defaulted loans with a significant discount with the plan to reap the rewards once the collection and recovery process begins to generate a cash flow.

Bringing it all together

API Manual Portfolio Manager Total
Total Secondary
Market Purchases
€152,379 €302,175 €506,748 €961,302

Good to know

Selling your loans can result in a loss of the original principal, as the secondary market typically does not provide a high enough premium for current loans to compensate for the non-performing part of the portfolio. Therefore, we advise to proceed with caution and not to try and sell everything at once if you see a percentage of your portfolio in default. It is likely that you will quickly sell the performing part of your portfolio and be left with the loans in recovery, significantly damaging your expected return.

The speed of the sales process depends on the market demand. In general, current loans are more liquid and will usually be sold within a day if sold at par value or a slight premium. Delinquent loans may take more time or the sale can be unsuccessful. As soon as another investor has purchased your loan, you will receive the funds directly to your Bondora account.

If you’re still unsure how to sell your loans, you should always get in touch on investor@bondora.com and have a chat with one of our experienced Investor Relations Associates who will walk you through it step by step.