The portfolio is made up of personal loans, both secured and unsecured, and were made by HFC Bank, a fully owned subsidiary of HSBC. Paragon paid £13.5m for the portfolio, financed with its own cash.
The giant London-listed lender has been running down poorly performing loans and businesses as part of a worldwide drive to simplify its business and cut costs.
Paragon said the loans, which will form part of its investment division Idem, should boost its earnings for this financial year.
Chief executive Nigel Terrington said Paragon plans more debt purchases in the near future.
“This latest transaction by Idem Capital marks a successful start to the new financial year for the division. Building on the group’s long-standing loan servicing expertise, Idem Capital has now firmly established itself as a leading player in the growing debt purchase market,” he said.
“Idem is well-positioned to pursue further investments in the mainstream of the UK debt purchase market.”