Why are there irregularities in the cash flow payments?

Investors occasionally notice discrepancies in the received vs planned cash flow payments in the Cash Flow page. These discrepancies can move in both directions. That is, sometimes the received payments exceed the planned total and sometimes the received payments fall below the planned amount. In most cases the difference is due to failed or late payments on the part of the borrower. Below we explain the most common reasons for these irregularities.

Borrower does not have enough funds on Bondora account

On a given day the borrower may not have adequate funds in their Bondora account to satisfy the required total. As a result, the funds that are available are distributed among all of those holding a note.

Example of borrower payment schedule

Borrower payments are delayed

Our increased recovery efforts and in-house collection process works to resume late payments. So when a borrower becomes in debt we issue reminders and attempt contact with the individual. In many cases the borrower then transfers the necessary funds into their Bondora account. Shortly after, Bondora withdraws the required payment and issues it to the investors accordingly. At times, this results in a payment amount that’s lower or higher than the planned sum in the Cash Flow view. Why? The payment delay leaves a deficit in the cash flow for the planned payment date. But when our collection process ultimately pushes the required payment through the system, a surplus is created for a later date when no payment was expected.

Irregularities in the Cash Flow grapgh

The loan has defaulted

Though we work to prevent defaults, they do occur at times. When a borrower fails to pay and our reminders and outreach do not help, the planned cash flow is no longer in play. In this case we work to restore the cash flow as best as possible. When the loan defaults, it doesn’t automatically mean that no payments are to be expected anymore. Investors may still receive some payments, though not the original planned amount. Eventual payments can come sporadically and not on schedule.

Payment schedule after loan default