Loan book performance

At Squirrel, we believe in transparency and we aim to provide you with all the statistics you need to make informed decisions about investing with us.

Here's our open loan book so you can take a look what's inside. With that said, please note that past performance does not guarantee similar performance in the future. 

Note: these stats are for our Personal Loans only. Further down the track when we have stats for our two new Investment Classes, you'll be able to find those here too.

Man holding an iPad

Default rates

The risk of borrower default is one of the most significant risks for Investors in peer‐to‐peer consumer finance loans. Borrower default can occur for a variety of reasons including the borrower falling on hard times, death or serious illness and on occasion unscrupulous behaviour. Broader environmental factors such as recessions etc. can also influence the prevalence of borrower default.

We report a loan as being in default when:

  • It is no longer reasonably expected to be paid; and
  • It is no longer reported to investor(s) as due to them.

Once a loan gets to this stage, it is written off with the outstanding interest and principal repaid to the investor(s) in that loan via the Reserve Fund (so long as there are sufficient funds available in the Reserve Fund). Our debt collection processes will continue, usually via an external debt collection agency and may involve legal action, to seek a recovery on the written off amount from the borrower. Any recoveries made are paid into the Reserve Fund.

The values and rates shown in the tables and charts below are the life‐to‐date values as of 31 August 2020.

Personal Loan origination, default and arrears statistics by risk grade

Approved borrowers on our Platform are allocated a risk grade based on their strength across our credit criteria. Their risk grade helps determine the level of reserve levy that applies to their loan and therefore contributes to the overall borrower interest rate.

The table below shows the performance of Personal Loans within each risk grade to date:

Risk Grade A B C D E Total 
Number of loans originated 469 1,088 863 210 30 2,660
Value of loans originated 10,715,792 21,136,838 13,475,201 2,632,620 353,876 48,314,326
Number of active loans1 189 408 328 71 10 1,006
Active loan balance 3,489,628 6,416,033 3,918,694 498,026 51,461 14,364,843
Number of loans in default 2 16 37 16 4 75
Value of loans in default (57,224) (191,249) (355,555) (114,756) (19,575) (738,359)
Recoveries on defaulted loans 34,413 7,857 26,975 11,272 6,673 87,189
Gross default rate 0.5% 0.9% 2.6% 4.4% 5.5% 1.5%
Net default rate2 0.2% 0.9% 2.4% 3.9% 3.6% 1.3%
Number of loans in arrears3 4 10 12 3 - 29
Value of loans in arrears 99,643 79,327 174,401 25,682   379,053
Arrears rate2 2.9%  1.2% 4.5% 5.3% 0.0% 2.6%
             

Personal Loan origination, default and arrears statistics by secured and unsecured

Personal Loans made via our Platform may be secured or unsecured (depending on product and loan value). Secured Loans are secured over an asset which provides some opportunity for recovery in the case of borrower default. Any security provided by the borrower will be held by the Squirrel P2P Trustee in accordance with the terms of the borrower agreement and the loan agreement. Where the loan is covered by a Reserve Fund, the security is taken for the benefit of the Squirrel P2P lending platform and the Reserve Fund and not for any investor individually.

The table below shows the performance of our secured and unsecured Personal Loans to date:

 

  Secured Unsecured Total % Secured
Number of loans originated 1,095 1,520 2,615 42%
Value of loans originated 28,543,018 18,588,927 47,131,944 61%
Number of active loans1 444 594 1,038 43%
Current balance of active loans  9,979,465 4,652,136 14,631,601 68%
Number of loans in default 14 57 71 20%
Value of loans in default (177,626) (517,012) (694,638) 26%
Recoveries on defaulted loans 46,947 38,163 85,110 55%
Gross default rate 0.6% 2.8% 1.5% n/a
Net default rate (after recoveries)2 0.5% 2.6% 1.3% n/a
Number of loans in arrears3 11 21 32 34%
Value of loans in arrears3 223,717 157,298 381,014 59%
Arrears rate3 2.2% 3.4% 2.6% n/a

Gross default rate by Personal Loan cohort

The chart to the right track’s the development of the gross default rate (i.e. excluding recoveries) for each Personal Loan cohort over time.

The table below contains the loan volumes and default and arrears statistics for each of our Personal Loan cohorts:

Loan cohort4 Loans originated Active balance3 Loans in default Defaults recovered Gross default rate Net default rate2 Loans in arrears3 Arrears rate
2015-H2 863,880 12,968 (17,264) - 2.0% 2.0% (8,241) 63.5%
2016-H1 3,175,633 88,661 (133,219) 6,139 4.2% 4.0% (45,200) 51.0%
2016-H2 3,479,230 106,027 (56,618) 6,673 1.6% 1.4% (16,009) 15.1%
2017-H1 4,805,525 429,854 (102,427) 9,117 2.1% 1.9% (22,968) 5.3%
2017-H2 6,502,837 897,982 (308,189) 59,445 4.7% 3.8% (102,960) 11.5%
2018-H1 5,095,458 1,035,791 (29,297) 4,800 0.6% 0.5% (51,510) 5.0%
2018-H2 5,238,064 853,150 (49,887) - 0.6% 0.6% (43,655) 5.1%
2019-H1 4,941,616 1,253,143 (7,840) 1,016 1.0% 1.0% (13,568) 1.1%
2019-H2 6,816,417 3,564,828 - - 0.1% 0.1% (74,942) 2.1%
2020-H1 5,663,675 4,529,838 - - 0.0% 0.0% - 0.0%
2020-H2 1,731,991 1,592,602 - - 0.0% 0.0% - 0.0%
Total 48,314,326 14,364,843 (738,359) 87,189 1.5% 1.3% (379,053) 2.6%

 

1An active loan is one that has not been fully repaid or written off.
2Net default rate includes the written off loan amount less any recoveries made on those loans.
3Loans in arrears are defined as loans that are the equivalent of at least 1 monthly repayment behind schedule.
4A loan cohort is the group of loans that were originated within a specific six-month period..

The Reserve Fund helps protect against defaults

The Reserve Fund has been put in place for each Investment Class to help protect your investment in the event of a late borrower repayment or borrower default. It is funded by applying a reserve levy to the borrower repayment which is aligned to their risk grade and corresponding probability of default.

Whilst the Reserve Fund has ensured that all investor principal and interest due has been repaid in full to date, the Reserve Fund is not an insurance product and we cannot guarantee or warrant that it will have sufficient funds available to enable you to be compensated in event of late borrower repayment or borrower default.

For further detail about how the Reserve Funds operate, including what would happen if a Reserve Fund was depleted, click here.

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