Studies of Life

Learning by doing.

Bondora Payment Reliability after 24 Months

16 May 2015 by Jim


I’ve recently posted saying that I made some bad choices in the way I invested on Bondora. That’s still true, so I would still recommend everybody to be cautious and not go “all-in” too quickly. I’ve learned my lesson.

But since I am not able to withdraw my entire portfolio quickly from Bondora, which I knew from the very beginning, I’ll keep tracking the performance of my portfolio and posting updates on how it is going.

As you can see in the chart above, payment reliability does stabilise over time in a growing portfolio. The biggest changes occurred at the beginning, and as the portfolio stabilised in size, so did the payment reliability. As you can see, principal is repaid reliably and the average amount of planned principal actually repaid during any given month is above 90%. With interest, reliability is approaching 60%, which is lowish but not surprising.

Based on this chart alone, my portfolio should be offering a decent return, but as I said in the previous Bondora post, it all depends on how defaulted loans are accounted for, because I have many HR loans in my portfolio from before the new rating system was introduced. If I get back most of the defaulted principal, I will have made a decent return. If not, the picture is darker. But I’ll have to wait 1 or 2 years to know for sure how the defaulted loans develop.

As you can see below, so far most of my defaulted loans are in stages 2, with some more in 3 and 4. For those in stage 5, only three loans so far, I have to say I am surprised and relieved to see that the principal has been fully paid back. Of 3 loans, 2 were fully repaid, including interest, and the 3rd paid back the principal but not the late fees (which is totally fine, given that I was not sure I would see any of the principal again).

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