I was tooling around on Eric’s Credit Community last week when I came across the interesting chart above. It is an analysis of all the late payments on mature loans on Prosper. Basically, it analyzes all the loans that have reached maturity (those loans that were originated prior to Dec 17, 2007) and looks at the spread of those loans that actually went late.
This is very useful information to have for p2p investors so you can gain some understanding of the likelihood of a loan going late once it has reached a certain age. By analyzing close to 7,000 loans that went late we can get some idea as to the pattern (these were all three year loans). The raw data for this chart is here. Based on this data, we can see that by 18 months 79% of the loans that were going to go late were already late. At 12 months that number is 63%. [Read more…]