Last week Lending Club quietly made the addition of recovery rates to their performance page. The graphic above (click on it for the full size version) shows recovering rates for all their p2p loans that were not current as of the end of August 2010.
What Does Recovery Rate Mean?
First let’s define what they mean by recovery rate. When a loan enters the “In Grace Period” it means the borrower is late on their loan payment. In Grace Period means the loan payment is between 1 and 15 days late. They become officially late if the payment has not been made within 15 days of the due date.
In this chart above, what Lending Club has done is look at all the loans that were not current at the end of August 2010. They took a six month period and worked out how many of these loans were recovered. You can see that 83% of loans that were officially In Grace Period at the end of August had been fully or partially recovered by the end of February 2011. [Read more…]