Estimated ROI Update & New Customization Features
October 18th, 2007 | News & Updates- Added an audit page for the Estimated ROI. You can now click into the Estimated ROI on the Member Profile pages and see how the number is being calculated.
- Updated Average Loan Age Weighted to include Paid/Defaulted loans. This will affect the Estimated ROI for older portfolios (boost up in ROI).
- Updated the chance a Late will flip to Current in the Estimated ROI formula from 50% to 25%. This is based on data from the past 8 months (lowers ROI for portfolios with a lot of Late loans).
- Collection Rates for Estimated ROI calculations have been updated from the latest Penncro Collection Rates.
- Added a date range to the Member Profile Customization section. This lets you see how your portfolio has done over a given date range. A lot of users requested this feature so they can see how their portfolios were doing after the initial learning curve. (Lazy Man and Money, pninen)
- Added additional customization features to the Loan List page.
- Changed the bar chart on the Total Loans Funded page that allows you to switch from viewing the page by amount or by count. (pjz)
- Fixed a bug introduced in the last update where clicking the pie chart was not showing you the corresponding slice. (pjz)
October 19th, 2007 at 9:40 am
Not to be dismissive of the other great changes, but…
Re: “Fixed a bug introduced in the last update where clicking the pie chart was not showing you the corresponding slice. (pjz)”
The bug still exists for the clickable numbers in the “Portfolio Profile” section of a lender’s Summary page.
October 19th, 2007 at 10:12 am
Thanks for the audit page on the Estimated ROI. Very insightful!
October 20th, 2007 at 12:22 am
NewHorizon: Changed it for the profile pages. Thanks for the heads up, I wasn’t really thinking when I did the changes. :)
Mike: Glad you like it, hopefully this helps people better understand where the numbers are coming from.
October 22nd, 2007 at 1:53 pm
… and don’t forget about clicking on the pie chart on the home page. :)
October 22nd, 2007 at 2:27 pm
NewHorizon: Done. Thanks again. :)
October 22nd, 2007 at 9:20 pm
Wow, this site is great. My friend just pointed it out to me.
Perhaps I missed it, but how do the calculations take into account money received? More importantly, can there be statistics on how much has been collected of loans people have made, and how this affects their returns?
October 22nd, 2007 at 10:45 pm
Hey Ezzie,
“how do the calculations take into account money received?”
It is assumed that 1 payment will be made every month for loans that are Current. (If a loan is 5 months old and current it is assumed 5 payments have been made)
“can there be statistics on how much has been collected of loans people have made, and how this affects their returns?”
Are you referring to the collection rates? The estimated ROI formula takes into account collection rates posted by Prosper for Penncro.
I hope I am understanding your questions correctly. You can read more about the way Estimated ROI is calculated in the FAQ.
October 26th, 2007 at 10:08 am
A suggestion. There are 2 types of loans which are inactive, of course: defaulted and paid in full (PIF). Yet of these 2 types, the bar charts (such as the one in the middle of the page at http://www.lendingstats.com/loansFunded ) only indicates amount defaulted whereas the PIF loans are lopped in with the “current” loans. Seems only fair :) that the PIF loans should be broken out too…? (FWIW, I’m envisioning blue color at the bottom of the bars, then green, then yellow, then red. :) )
October 28th, 2007 at 11:28 am
I am not following your formula for ROI. I have one late of $50 and you are showing me an estimate ROI of 0.75% and my average interest rate is 18.96% and approximately $4,700 in loans. I would recommend using the following formula.
Estimated ROI = (Avg. Interest Rate - Avg. Fee)*(1 - Late Percent - Default Percent)(1095/Portfolio Age))
Using this formula I come up with an estimate ROI of 10.2% which seems more realistic. Also this equation assumes 100% of lates will default.
October 28th, 2007 at 4:24 pm
NewHorizon: I’ll look into that, it shouldn’t be hard.
rrkme: The Late Percent and Default Percent are already accounting for the likelihood of a late loan turning current again. (I’ll break those numbers down in a future update so you can see how the collection rates, payments factor in.)
Also the ROI is calculated on an annual basis. If your annual ROI is 0.75% then after 3 years its: 1.0075^3 or 2.2%. Check the FAQ for more details. Hope that helps.
October 29th, 2007 at 2:38 pm
FWIW, I’m seeing the words “Invalid XML data” in the “Portfolio Breakdown by Total Amount” section of the page http://www.lendingstats.com/memberProfile?lenderId=Lil‘%20Miss%20Lagniappe
(I dunno - may have to do with the apostrophe in the user’s ID?)
… and at the same page, clicking on the estimated ROI figure (currently 4.08%), the pop-up windows shows:
>Estimated ROI = Estimated Default Sale Amount / Default Amount - 1
>Estimated ROI = / - 1
>Estimated ROI = -1.000000
>Estimated ROI = 0.00%
… followed by the first few entries of a list of over 900,000 listings.
November 1st, 2007 at 1:13 am
NewHorizon: Nice catch, this should be fixed. The apostrophe is annoying for xml/html escape sequences… Also updated the bar chart to show a Paid status that is separate from the Current status. (Going to test this before I release it, so in a few days or in the next update) Thanks again :)
November 2nd, 2007 at 1:25 pm
If I run my page with no changes, I get an est ROI of X.XX%
If I run the page, but limit it to 2006 loans only, and then do the same for 2007 loans only, the est ROI’s generated are both higher than the ROI I get for all loans.
What do you suppose is causing this? Is it the treatment of paid loans (figuring into the avg loan age)?
November 2nd, 2007 at 4:14 pm
Hey LC,
Since you didn’t provide your lender name I cannot look at your portfolio. However, the reason for this probably has to do with the loan age of the 2 portfolios as well as the difference in delinquencies in both.
e.g.If your 2006 portfolio has more delinquencies then your 2007 portfolio then this will happen.
Your 2006 Portfolio will increase in loan age (since your excluding newer loans). The increased loan age will help your ROI increase if you have delinquencies.
Your 2007 Portfolio is newer and will have less delinquencies most likely (less time to go delinquent). Without the increased delinquencies , the drop in your loan age won’t have that much of an effect on your ROI.
Hence you can see an increase in ROI when you split the portfolio out. I hope that answers your question. (Take a look at the audit by clicking on the Estimated ROI number, you should see how the loan age affects your ROI.)
November 15th, 2007 at 10:34 am
Take, for example, the “Bid History” section shown at: http://www.lendingstats.com/memberProfile?lenderId=larrybird
There are many months where this lender didn’t place any bids - Apr ‘06 thru Jan ‘07, for example. But the graph shows only an upward line running from Mar ‘06 to Feb ‘07. In short, months without bids are not reflected in the bid history. Me-thinks they should.
November 18th, 2007 at 10:27 am
HI there,
I noticed on the performance stats page that you show no delinquencies in the “Total Loans Summary page for Oct and november, while prosper indicates delinquencies currently. This needs to be fixed so that it reflects reality since of course there are currently delinquent accounts on prosper.
November 18th, 2007 at 10:32 am
In the TOP LENDERS BY ROI I think you should only show the top ROI of all prosper lenders for the complete dataset including all time ranges. Three months is not enough time to really factor in defaults etc as most credit grades don’t default or go late in the first several months.
November 18th, 2007 at 11:41 pm
NewHorizon: Nice catch, I’ll look into this.
geekguy:
1) A loan on prosper needs at least 45 days to show up as Late this is why you don’t see any delinquencies as of yet for October/November.
2) The 3 month time frame was used to exclude portfolios that are extremely young in nature. If you want to to customize this goto the Lender List page and filter by what you want.