How is estimated ROI calculated?
Estimated ROI is calculated by taking the average interest rate of a given portfolio and subtracting out the Prosper fee, defaults and late loans estimated to default. • Late loan amount is calculated by deducting monthly payments already made from the principal. • Loans under 1 month late are assumed to default at a 50% clip. • Late loans over 1 month old are estimated to default at the AmSher agency recovery rate. • Default losses (projected defaults for lates and actual default) are calculated after debt sale prices are factored in. • Paid/Repurchased loans are included in the current average interest rate calculation. This may change in the future. • The late/default rate are projected out to one year. • Prosper Fees will vary according to when the loan was made. (old loans are 0.5% flat fee, the newer loans are 0.5% AA/A, 1% C-HR, newest loans are 0% AA/1% A-HR • Loans that are not old enough are excluded from the calculation for late/default rates in the formula. Formula: • Estim
