While several factors, including early loan payoff, can affect returns on your Notes, the biggest impact comes when members miss loan payments or stop making payments entirely.
When members miss a loan payment, their loan moves from “current” to “late” status. When they miss several payments, usually after 120 days, the loan enters “default” status. When there is no longer a reasonable expectation of further payments, usually within 30 days of when a loan goes into default, the loan is “charged off.” Charge-offs have the most lasting effect on your Notes portfolio because the corresponding Note is removed from the platform.
Happen Bank provides an expected charge-off rate for every Notes order. We base expected charge-off rates on historical data, expected loan performance, macroeconomic conditions, and other factors.
Expected charge-off rates may change periodically, and we provide them only for informational purposes. It’s important to remember that certain loans, based on risk assessment, are more likely to charge off and may result in a loss of some or all invested funds.*
Each portfolio is unique, and the performance of your portfolio may vary. Past performance is no guarantee of future results and any information provided, including charge-off rates, is not intended to be investment advice, guidance, or a guarantee of the performance of any Note.
* Visit the Statistics page to learn more about historical performance and charge-off rates on the Happen Bank platform. Learn more about how often we update expected charge-off rates.
