The 10 loan status variants explained
Each loan on Bitbond has a loan status. Statuses are not always as easy to understand at first sight. Therefore we explain every possible loan status in more detail in this blog post. We also explain what happens in each of the different statuses.
Explanation of each loan status
A loan which is ‘in funding’ is currently listed on our marketplace. A loan can only be ‘in funding’ during the auction which last up to 14 days. After that it is either ‘funded’ or ‘expired’ – see explanations below.
When a loan was either fully funded during the auction or reached the 60% funding threshold at the end of the auction its status is ‘funded’. This status also signals, that no payment from this loan has been due, yet. After the first due date of a loan payment the loan either goes to ‘current’ or to ‘in grace period’. ‘current’ means the payment has been made, ‘in grace period’ means the payment has not been made, yet.
A loan can have the status ‘current’ when one or more payments have been made. It also means that this loan has both, no overdue payments and one or more scheduled future payments. Therefore a bullet loan, like our 6 weeks loan can never have the status current. They can only be ‘funded’, ‘fully paid’ or in one of the late ranges.
A ‘fully paid’ loan is simply fully paid. There isn’t much to add to this. One thing to remark however is, that ‘fully paid’ doesn’t say anything about when payments have been made. Therefore a borrower might have paid a loan in full. But among the payments that were due, one or more might have been paid late. From ‘fully paid’ we wouldn’t learn about this, we only know all principal and interest payments were made. For more details it is necessary to check each payment date from the payment schedule.
When one or more payments of a loan are overdue for more than three days, but for less than 31 days, the status is ‘late 30′. This is the first of the two late ranges.
When one or more payments of a loan are overdue for 31 days or more, but less than 90 days, the status is ‘late 90′. When a loan is in this status the dunning procedures are ongoing and we get in touch with the borrower individually either by email or over the phone.
When a loan has one or more payments that are overdue for over 90 days the loan is considered as ‘defaulted’. After a loan has reached this status we decide individually what happens next.
If the borrower communicates with us we can still agree on a repayment plan. If the borrower does not reply or is not willing / able to repay we typically have two options.
One is to sell the outstanding claim to a debt collector. The debt collector in most cases will either try to agree on a certain repayment with the borrower directly or bring the case to court. The net proceeds from selling the claim to a debt collector are distributed among the lenders of the loan.
Should no debt collector buy the claim, we act according to our second option. We reveal the identity of the borrower to the lenders. In that case lenders can take legal action on their own behalf.
After a loan has been defaulted upon we take action as described above. Once our actions are completed, i.e. either the remaining claim is sold or the borrower’s identity is reveled to lenders, the loan is ‘charged off’. From this status everybody knows that no further action is taken on this loan and all dunning, collection and legal measures that are possible have been completed.
Loans that have not reached the 60% funding threshold by the end of the 14 days auction are ‘expired’. Just like the ‘canceled’ loans they are not displayed in our archive. Only borrowers can see them in their loan overview.
Loan status summary
The loan status is a quality indicator of the loan. It doesn't reveal everything immediately, but is a good first glance overview. The status is also useful for borrowers and lenders to find out what are the next steps if something doesn't go according to plan with the loan.