Total Score combines the two most crucial components of any investment – risk and return.
In our methodology for real estate loans, we use the historical loan performance from Estateguru’s loan book to determine the default probability and expected recovery rate of a particular risk group.
We then combine the information with the offered interest rate to estimate the overall expected return on the investment in the particular loan. The expected return of the investment is then normalized on a scale from 0 to 100 to make it more readable.
You can see a more detailed visual representation of the Total Score calculation below,