Buying a debt portfolio involves acquiring a collection of outstanding debts, typically from a financial institution or debt collection agency. These portfolios can range in size and composition, encompassing various types of debt, including consumer loans, credit card debt, and medical debt. The process of purchasing a debt portfolio typically involves conducting due diligence, evaluating the portfolio’s risk and return profile, and negotiating the purchase price.
There are several reasons why investors may consider buying a debt portfolio. Debt portfolios can offer the potential for attractive returns, as the acquired debts can be purchased at a discount to their face value. Additionally, debt portfolios can provide diversification benefits, as they are typically composed of a variety of different types of debt.
