What is the default rate on a points loan around here? Lending 101

[SBR_John]

It seems pretty high.

You points loan sharks out there need to know what the probable default rate is to know how to price your point loans. When I spent a lot of time in Asia I was shocked that their business rate loans were 60%. But thats what they had to charge to turn a profit because of the high default rate.

[Fishhead]

[smitch124]

I'm not sure, it does seem pretty high, but it seems to me that a vast majority of the defaults could be avoided with just a bit of common sense and restraint. You don't have to look too hard at one's posting and point use history to know who to avoid.

[1st and Ten]

I lend them for free to people I like

[Cookie Monster]

I guess it is 5% or so. Of course, the lender has to estimate the risk and price the loan accordingly. A newbie is about 20% risk, so the loan has to be small and the interest rate high. A solid user is maybe 3% risk, so they may get larger loans with better rates.

[warriorfan707]

I guess it is 5% or so. Of course, the lender has to estimate the risk and price the loan accordingly. A newbie is about 20% risk, so the loan has to be small and the interest rate high. A solid user is maybe 3% risk, so they may get larger loans with better rates.

make sure you confirm on the credit report that your loan to me was paid back in full

[MJT1212]

16.93333, repeating of course, percent.

[Boner_18]

It is high and likely approaches 100% as time approaches Infinity. They don't call us gamblers for nothing.

The Economics of Points Lending.

[gman2114]

Is this a banking site or a gambling forum.?

[StraitShooter]

The stiff rates are declining

guys are tired of getting stolen from so they are much more careful who to lend to..

Dunder is a perfect example of a lender establishing a decent clientele of borrowers who are more likely to pay back..

after the blood baths in november and decmber its hard for your fresher points ghost to get a loan at all..then they get starter loans which are smaller so if they intend to rip a guy off it takes a while longer..maybe they pay off the small loan only to rip the guy off later for more if they lose...

Guys who steal from fellow posters and carry on like nothing happened like whatsgood, iwuitutan and others..

what they lose is their creidility on a site that just gets stronger everyday..they think they are smart but just scum bags

i just asked the mexican stallion for 200 points and he gave it to me..having good credit is kinda fuken cool ya know?..good day

[StraitShooter]

I will add that the williams 22 character has contributed a shit load of time to the well being of your everyday poster by contributing as a unheralded watch dog

the credit report thing was just sick

[SBR_John]

I agree, Williams 22 should sell his info... seriously.

It would be cool if guys could put up something of value for any big loan like a transfer from Paypal maybe. Or a prepaid something.

[Chi_archie]

I agree, Williams 22 should sell his info... seriously.

It would be cool if guys could put up something of value for any big loan like a transfer from Paypal maybe. Or a prepaid something.

Genius idea!!!

don't see how this could cause any problems whatsoever.

let's implement this NOW.

don't run it by willie bee first, he won't care

[Chi_archie]

looking for a 1000 point loan for a 20 dollar paypal temporary transfer

anyone?

[GiveMeaBJ]

Genius idea!!!

don't see how this could cause any problems whatsoever.

let's implement this NOW.

don't run it by willie bee first, he won't care

[Chi_archie]

Giveme,


I suggest you offer for point loans by putting up nekkid pics of your gf as collateral

[THE PROFIT]

A Loan to Whatsgood is 100% default it seems

[StraitShooter]

A Loan to Whatsgood is 100% default it seems

unfortunately..let Kapt Karma deal with it...

Soeaking of Karma..poster Odusmykal hit all 3 periods of pick the hockey score..then he hit the final score..then to top it off the next night he hit the exact score on the NBA contest game

what are the odds..really..what are the odds

[williams22]

Currently Outstanding Loans: 110
Completed or Stiffed Loans: 543
Points Stiffed: 3143 points
Total profit from loans if all were paid: 6951 points

Stiffs reduce loan profit by: 45.2%
Stiff risk: 6.97%

[StraitShooter]

Currently Outstanding Loans: 110
Completed or Stiffed Loans: 543
Points Stiffed: 3143 points
Total profit from loans if all were paid: 6951 points

Stiffs reduce loan profit by: 45.2%
Stiff risk: 6.97%

Haha..thats good shit..williams I sometimes wonder what you look like..I picture you a beedy eyed woodsey owl type character with wire rim glasses

[williams22]

Haha..thats good shit..williams I sometimes wonder what you look like..I picture you a beedy eyed woodsey owl type character with wire rim glasses

Haha no sir, I just look like an average college student. I'm about 6'1" and decent looking enough to always have a girlfriend.

I'm taking a database class right now, so I use this shit for practice

[StraitShooter]

Haha no sir, I just look like an average college student. I'm about 6'1" and decent looking enough to always have a girlfriend.

I'm taking a database class right now, so I use this shit for practice

[Dunder]

A Loan to Whatsgood is 100% default it seems

He probably won´t thank me for saying so, but he did actually repay a loan before.
It is not captured in the current credit report, though.

Responding to SBR_Johns initial question, the default rate has fallen substantially over the last couple of months and market interest rates are coming down as a result.

[no1here]

Williams, what the newby default rate percentage? Of the total 3143 points unpaid how many were from newbys? I would think that anybody under 3 months/100 posts need not apply. If serious about points then they should be posting regulary to gain some. I see you loaning to some with way less then this. They would scare me greatly.

[williams22]

Williams, what the newby default rate percentage? Of the total 3143 points unpaid how many were from newbys? I would think that anybody under 3 months/100 posts need not apply. If serious about points then they should be posting regulary to gain some. I see you loaning to some with way less then this. They would scare me greatly.

Unfortunately there's no easy rule that weeds out the stiffs. I've seen guys with with a few hundred posts stiff. I tend to take a small risk (20-30 points) on just about anyone to give them a chance. I do avoid posters who can barely put sentences together though.

It would help eliminate stiffs if SBR did a better job at banning ghost accounts, or at least made the ip report public.

[SBR_John]

Unfortunately there's no easy rule that weeds out the stiffs. I've seen guys with with a few hundred posts stiff. I tend to take a small risk (20-30 points) on just about anyone to give them a chance. I do avoid posters who can barely put sentences together though.

It would help eliminate stiffs if SBR did a better job at banning ghost accounts, or at least made the ip report public.

I will ask what the policy is about that.

So what is the monthly interest rate a lender would have to charge under the current parameters to break even assuming the average default rate?

[williams22]

I will ask what the policy is about that.

So what is the monthly interest rate a lender would have to charge under the current parameters to break even assuming the average default rate?

I believe it would be the stiff risk percentage, so roughly 7% to break even. Then a risk premium needs to be added on top.

[Dunder]

I will ask what the policy is about that.

So what is the monthly interest rate a lender would have to charge under the current parameters to break even assuming the average default rate?

Regardless of the loan term, the breakeven point is

loan amount

divided by

(100 minus default%)

Based on the figures provided by Williams this is just over 7.5%.

[SBR_John]

So 92% of all loans are repaid? That is extremely high. I would have guessed maybe 65% or less.

[Dunder]

So 92% of all loans are repaid? That is extremely high. I would have guessed maybe 65% or less.

In 2010, I would say that around 95% have been repaid.
The rate of defaults has dropped of as the ´self-regulation´ has become tighter.

[williams22]

So 92% of all loans are repaid? That is extremely high. I would have guessed maybe 65% or less.

Yes it is fairly high. Keep in mind though that ever since people started to understand to check the Credit Report it has become very hard to stiff on multiple loans at once. This means that a user who stiffs will only have 1 stiffed loan, but a trustworthy debtor will have 9 or 10 successfully repaid loans, which tilts the numbers.

I currently have data on exactly 200 debtors, 24 of which have stiffed. 12% of users stiff, but only 7% of the points loaned are stiffed.

Also, ever since the Credit Report, lenders have been more wary of this and have offered new debtors loans no larger than 50 points at the most. There are still stiffs, they just account for less points now.

[SBR_John]

In 2010, I would say that around 95% have been repaid.
The rate of defaults has dropped of as the ´self-regulation´ has become tighter.

Incredible. And great job by you guys. That is quite a statement as to both how well its run now as well as the quality of the borrowers. Thats lower than the current mortgage default rate in the US!