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 waiting to get funded by one or more investors.
When a loan was either fully funded or reached the 60% funding threshold at the end of an auction its status is ‘funded’. This status 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 one of the 'late' statuses.
A loan can have the status ‘current’ when one or more payments have been completed and no payments are past due. It also means that this loan still has one or more scheduled future payments. This is true only for installment loans (3 months to 12 months term). 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 has been repaid in full including all principal and interest payments.
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. This also means that we have started to get in touch with the borrower via multiple communication channels to remind them about their payment obligations.
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 regularly get in touch with the borrower by email and 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 an alternative repayment plan. If the borrower does not reply or is not willing / able to repay we have the right to terminate the loan before the 90 day mark and send the full outstanding loan amount to a debt collection agency.
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 recovery proceeds from passing the claim to a debt collector are distributed among the lenders of the loan.
After a loan has been defaulted we take action as described above. Once our actions and those of the debt collection agencies that we work with are completed, 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 were listed on our marketplace and that have not reached the 60% funding threshold by the end of the auction are ‘expired’.