📈 1. Net Yield — Your Real Return on Capital
Forget gross margins. Net yield is what’s left after the dust settles.
Formula:
(Total Interest + Fee Income – Charge-offs – Cost of Funds) ÷ Average Portfolio Size
If this number isn’t working, nothing else is. Your portfolio isn’t a hobby—it’s inventory. And this is your markup.
📉 2. Roll Rate — Your Portfolio’s Silent Killer
This metric tracks how many loans go from “kind of late” to “likely a loss.”
Why it matters:
If 30-day past due
loans are rolling into 60-day buckets, your borrowers aren’t recovering—they’re sinking. And so are you.
High roll rates scream for better collections or tighter underwriting.
⚠️ 3. Charge-Off Ratio — The Line Between Growth and Collapse
Charge-offs are part of the game. But if you don’t control them, they’ll control
you.
Formula:
Total charge-offs ÷ Total loan originations
Keep this below 10%. Anything higher? Stop scaling. Start investigating.
💵 4. Cost Per Funded Loan — Don’t Let Marketing Eat You Alive
Spending $180 to fund a $300
loan is not clever. It’s chaos in a suit.
Formula:
(All marketing + origination costs) ÷ Number of funded loans
Measure it by channel. Kill the underperformers. Pour gas on what converts.
📆 5. Early Payment Default (EPD) — The Fraud and Fool Filter
When loans default in 30–60 days, you're funding the wrong people.
Why it matters:
EPDs usually mean fraud, weak leads, or lazy underwriting. Monitor this metric like your survival depends on it—because it does.
💰 6. Lifetime Value (LTV) — Know What a Borrower’s Really Worth
If
you don’t know what your average borrower is worth over time, you can’t scale your marketing. Full stop.
Formula:
Revenue per loan × average number of renewals
If your LTV is $300, you can afford to spend $75–$100 to acquire a borrower. If it’s $120… you’ve got a margin problem.
📊 7. Conversion Rate — The
Health of Your Funnel
If 500 people apply and only 25 get funded, something’s broken.
Formula:
Funded loans ÷ Total applications
Either your leads are garbage, your UX is confusing, or your underwriting is too tight. Find the leak. Fix
it.
