Quote:
In my case, 8 months in with 2,100 loans, RAR = 12.68%, gross interest = $3,950, charge offs = $224 = 5.67%. Smarter lending decisions will reduce bad debts - ask any banker. Agree absolutely that the economy is benign atm and that a tightening could change everything but generally, a recession will cause charge offs to increase by half - certainly a steep decrease in returns but not an absolute catastrophy and certainly not back to current bank deposit rates. Most asset classes will not escape unscathed from a recession (bar bank deposits).
I think eight months in is about the time when you may start to hit the charge-off bulge.