Total balance or count in the earlier delinquency stage (e.g., 30 days past due).
Portion of the starting volume that moved to the next stage (e.g., 60 days past due).
Calculated Roll Rate
0.00%
function calculateRollRate() {
// 1. Get input values strictly using getElementById
var startVolInput = document.getElementById('start_bucket_volume');
var rolledVolInput = document.getElementById('rolled_volume');
var resultContainer = document.getElementById('result_container');
var resultPercentage = document.getElementById('result_percentage');
var resultExplanation = document.getElementById('result_explanation');
// 2. Parse values
var startVol = parseFloat(startVolInput.value);
var rolledVol = parseFloat(rolledVolInput.value);
// 3. Validation Logic
if (isNaN(startVol) || isNaN(rolledVol)) {
alert("Please enter valid numbers for both volumes.");
resultContainer.style.display = 'none';
return;
}
if (startVol startVol) {
alert("Rolled volume typically cannot exceed starting volume for a standard roll rate calculation.");
// We allow calculation but warn, as sometimes new volume is added in complex scenarios,
// but for pure roll rate, it usually indicates an error.
}
// 4. Calculation: (Rolled / Start) * 100
var rollRate = (rolledVol / startVol) * 100;
// 5. Update UI
resultContainer.style.display = 'block';
resultPercentage.innerHTML = rollRate.toFixed(2) + '%';
// 6. Contextual Message
var explanationText = "";
if (rollRate < 10) {
explanationText = "Low Transition: Most accounts were cured or remained in the current stage.";
} else if (rollRate < 30) {
explanationText = "Moderate Transition: A significant portion of accounts are deteriorating.";
} else {
explanationText = "High Risk: A large percentage of accounts are rolling into worse delinquency.";
}
resultExplanation.innerHTML = explanationText;
}
How to Calculate Roll Rate for Credit Risk
In the world of credit risk management, collections, and banking, the Roll Rate (also known as the transition rate or flow rate) is a critical Key Performance Indicator (KPI). It measures the percentage of delinquent accounts that deteriorate from one stage of delinquency to the next over a specific period.
Understanding your roll rates allows financial institutions to forecast bad debt losses, determine the effectiveness of collection strategies, and calculate the allowance for loan and lease losses (ALLL).
The Roll Rate Formula
The calculation compares the volume of accounts in a specific delinquency bucket at the beginning of a period against the volume of those same accounts that moved to the next delinquency bucket by the end of the period.
Roll Rate (%) = ( Volume Rolling to Next Bucket / Volume in Previous Bucket ) × 100
Note: "Volume" can refer to either the Outstanding Balance ($) or the Count of Accounts (#). Financial teams typically track both to see if higher-balance accounts are rolling over more frequently than lower-balance ones.
Step-by-Step Calculation Example
To accurately calculate the roll rate, follow these steps using the data from your aging report:
Step 1: Identify the Starting Bucket. Let's say you are analyzing the "30 Days Past Due" bucket. At the start of the month, the total balance in this bucket is $1,000,000.
Step 2: Track Movement. By the end of the month, track how much of that specific $1,000,000 moved into the "60 Days Past Due" bucket. Let's assume $250,000 rolled over. (The rest either paid/cured or stayed in the 30-day bucket).
Step 3: Apply the Formula. ($250,000 / $1,000,000) = 0.25
Step 4: Convert to Percentage. 0.25 × 100 = 25%
In this example, the "30-to-60" roll rate is 25%.
Why Monitoring Roll Rates is Critical
Roll rates act as an early warning system for portfolio health:
Forecasting Losses: By chaining roll rates (e.g., 30-to-60, 60-to-90, 90-to-Charge-off), analysts can predict exactly how much of the current portfolio will eventually be written off as a loss.
Staffing Collections: If the roll rate from "Current" to "30 Days" spikes, collection managers know they need to allocate more resources to early-stage collections immediately.
Strategy Testing: If you implement a new SMS reminder system for overdue accounts, you should see the roll rate decrease in the following months.
Net Roll Rate vs. Gross Roll Rate
While the calculator above determines the gross roll rate based on flow, sophisticated analysts also look at "Net Roll Rates" which account for payments (cures). A negative roll rate is impossible in a gross flow model, but in net flow models, high payments can sometimes offset new delinquency inflows.