Some of my loans are in delay. What should I do?

It’s normal to have some loans in delay. Of course it should concern a small fraction of your portfolio.

The pricing for the borrowers have been set up with the objective to cover the credit risk and deliver in average, if your portfolio is well diversified, the expected return displayed on the market when you purchased it.

So you should not do anything. Some loans will go back to the current status thanks to the collection actions, some will not repay and be defaulted. Ultimately, it will impact negatively your return, but hopefully to the expected levels.

You could also decide to sell these loans. You will be able to do that only if you put a discount. If not, probably nobody will buy them. However the tricky part is to define the fair discount. Not too low, because you may not be able to sell it. Not too high because you may lose too much money compared to the alternative of keeping it in your portfolio and seeing it come back to a normal status.

We provide the KIP valuation to help you in this assessment. But you’re the only one to make the decision. It’s why we don’t recommend non experts to try selling (or buying) loans in delay on the secondary market.