If You Don’t Know These 7 Numbers, You’re Not Running a Loan Business! You’re Just Hoping It Works.

📈 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.

Final Word:

Track these numbers like your business depends on it. Because it does.

Great lenders aren’t just good at issuing loans—they’re ruthless at managing data.

These 7 KPIs tell you when to push, when to pull back, and when it’s time to overhaul.

Print them. Post them. Obsess over them.

They are the heartbeat of your portfolio.