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Bad Debt

!!! This information is currently out-of-date and we are in the process of regenerating it !!!

Most providers have published estimates on expected bad debts for lenders.  Below is an analysis of actual bad debts against predictions, sorted by how well each of the companies has performed against their own estimates.  A complete year's worth of data is required before any meaningful comparison can be made.  YES-secure has been split into the original YES-secure and the rebranded Encash as the underwriting had changed.

Company  Predicted Bad Debt 1 Actual Bad Debt 1 Comparison 2
Annual Lifetime Lifetime Lifetime
Range
(AER)
Range Weighted
Average
Range Weighted
Average
Range Weighted
Average
Quarterly
Change
1 Funding Circle 0.6%
to
5.0%
1.2%
to
10.6%
4.52% 0.83%
to
2.15%
1.42% +9.06%
to
+0.37%
+3.08% :-(
2 RateSetter N/A < 1.7% 0.49%
 (0.00%) 4
< +1.21% N/A
3 Folk2Folk < 1.0% < 1.0% 0.00% < +1.00% :-|
4 Buy 2 Let Cars 0.0% 0.00% 0.00% 0.00% :-|
  Funding Knight 0.5%
to
2.0%
TBD TBD 0.00%
to
0.91%
0.47% TBD TBD N/A
  YES-secure 1.5%
to
11.0%
3.0%
to
25.0%
7.92% 6.47%
 to 5
24.87%
17.82% +18.53%
 to 5
-21.87%
-9.90% N/A
  YES-secure
Encash
1.5%
to
11.0%
3.0%
to
25.0%
9.84% 0.00%
to
23.01%
 6.53% 8 +25.00%
 to
-15.73%
 +3.31% 8 N/A
  Quakle N/A 1.0%
to
3.0%
< 3.0% > 50.00% 6 < -47.00% 6 N/A
  Wellesley & Co. < 1.0% 1.0% 0.00% 8 +1.00% 8 N/A
  Lending Works 1.0% 1.54% 0.00% 8 +1.54% 8 N/A
Company  Predicted Bad Debt 1 Actual Bad Debt 1 Comparison 2
Annual Lifetime Lifetime Lifetime
Range
(AER)
Range Weighted
Average
Range Weighted
Average
Range Weighted
Average
Quarterly
Change

1 Data valid as of 30th May 2014; bad debt can take months to years to materialise, and therefore the actual bad debt figure may not be fully representative, especially when a company's loan book is growing at a significant rate (for example for the first two years Zopa's bad debt was 0.05%)
2 Comparison of actual bad debt against predictions, with a positive number indicating a better than expected bad debt and a negative number indicating worse than expected bad debt, with change from previous month indicated
3 Listings are excluded from the comparison (figures in brackets) as Zopa did not provide estimated bad debts for these loans
4 Due to the provision fund, no lender on RateSetter has experienced any bad debt, and the bad debt covered by the provision fund is shown in brackets
5 The A+, A and B markets have all experienced significantly worse than expected bad debt, but conversely the D market has experienced better than expected bad debt, but given the wide variation caution should be taken of credit bands
6 Estimate based on feedback on the Quakle Facebook group and the Quakle forum (before it was shutdown)
7 No data is currently available
8 Too soon to draw any conclusion
9 It would be too soon to draw any conclusion, but no data is currently available

Late Loans

A prequel to defaults are loans that are classed as "late".  This is where the borrower has fallen behind with repayments for whatever reason.  This is a useful indication on future bad debts and also how effective the company is at chasing late payments.

Company  Late Loans 1
1 month 2 months+ Total
Range Weighted
Average
Range Weighted
Average
Range Weighted
Average
Quarterly
Change
1 RateSetter 0.18% 0.02% 0.20% N/A
2 Funding Circle 0.00%
to
0.50%
0.32% 0.21%
to
0.69%
0.35% 0.67% :-)
2 Funding Knight 0.00%
to
1.38%
0.71% 0.00% 0.00% 0.71% N/A

1 Data valid as per data on bad debts; expressed as a percentage of the total capital of all loans where a payment has been missed against the total outstanding capital
2 No data is currently available
3 Data listed as percentage of loans, rather than by amount as no other data is available

Information taken direct from each of the companies listed above, unless otherwise stated.  Please also refer to the disclaimer.