Apr 13, 2023

Modelling loan portfolios

Hi all,

I have a technical interview with a private credit firm that buys loans (and loan portfolios) from banks and creates loan portfolios with them. the loans are unsecured and are various types (car lease loans, loans to SMEs, mortgages, asset financing loans etc).

I am going to be modelling a loan portfolio and will be asked to find the IRR and model the cashflows of the portfolio. I have only ever done a DCF to value equities but am familiar with IRR and whatnot.

Can anyone share any insights regrading modelling loan portfolios?

Thanks

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