How do I sell loans on the Secondary Market?
Portfolio Manager and Portfolio Pro is closed for new investments from 27 February 2023. If you invest using Portfolio Manager or Portfolio Pro, please note that the Secondary Market will remain open, and you’ll still receive loan payments from your portfolio. But you won’t be able to reinvest them into those two portfolios. However, you can transfer your portfolio to Go & Grow or Go & Grow Unlimited.
Important to know
Selling your loans can result in a loss of the original principal, as the secondary market typically does not provide a high enough premium for current loans to compensate for the non-performing part of the portfolio. Therefore, we advise to proceed with caution and not to try and sell everything at once if you see a percentage of your portfolio in default. It is likely that you will quickly sell the performing part of your portfolio and be left with the loans in recovery, significantly damaging your expected return.
Why can selling my loans have a negative impact on my net return?
When selling your loans on the secondary market, it is highly likely that this will result in reduced returns or even worse, losses. Why? Because you are losing out on the monthly interest you would have received until maturity on each loan, not to mention if you sold a loan at a discount.
To avoid this and to maximize your returns when liquidating your portfolio, why not pause your reinvestments and hold the loans until maturity, taking cash out as the loans are paid back to you on a monthly basis.
To sell your loans, switch to the investments tab in the main menu. On the right side of each line, you will find the settings options for selling your loans. Just enter a percentage in the “Discount/Markup” column for the loans you want to sell at a premium or discount. Enter a negative numeric value if you want to sell the loan cheaper at a discount, and enter a positive numeric value if you want to sell it with a premium.
The expected income is calculated automatically. The XIRR will be calculated and displayed later when your offer is released into the Secondary Market. To do this, first, place your selections in the shopping cart and confirm your sales once more by clicking on "Sell all" above.
In the following window, you will see your sales list, which is a summary of all the loans you want to sell. After that, you can specify a Bondora user to whom you would like to sell the loans to directly. Also, you can specify that you want to cancel the sale as soon as a repayment on the given loan is received and also when the payment plan is rescheduled. In essence, this gives you some confidence that if the borrower (who is currently overdue) begins to make their payments again, you won’t miss out by selling your investment in the loan.
In the same window, you can specify that all selected loans should be collected and sold as a portfolio. Simply put a checkmark next to "Sell as Portfolio", then you have the option to set a portfolio price if you choose. Buyers will then have to purchase all of your loans in one package for the set price.