https://www.liquidpoker.net/


LP international Poland latinoamerica Iceland    Contact            Users: 54 Active, 8 Logged in - Time: 01:33

Lending Club Q1 Results

New to LiquidPoker? Register here for free!
Forum Index > Poker Blogs
thewh00sel    United States. Nov 23 2012 01:19. Posts 2720
So 3 months have past since I made my first investment at LendingClub.com. When I first signed up, I deposited what remained of my PayPal balance from some stuff I sold on eBay for a total initial deposit of $1,259.83. Pretty much firing one buy-in at the investment.

My strategy for investing on the site isn't too complicated. I did some mild research and found some helpful filtering sites to narrow down my criteria for lending money to strangers. I found a lot of use in lendstats.com in filtering for specific loan-types that seem to have a history of high returns and non-default. After I have a list of loan applications I scan through them for proper grammar and reasonable loan requests (i.e "Consolidating my debt" > "BUYIN A HARLEYY!". Then I buy a share of the loan ($25) and repeat. The whole process of takes all of 10 minutes once a month so it's not too much of a hassle.

Results so far:


As you can see I'm invested in 54 different notes and have been paid $98.72 in payments to date. Of those payments, roughly half is my initial investment back and half is profit (interest). My net annualized return is very high right now, but that is a function of no defaults yet, which will of course happen eventually. I am in the early part of all of my loans and this period typically has the lowest default rate of any time period in a loan. I expect that 20% return to drop to the mid to low teens eventually, but for a speculative investment after a few months I'm satisfied. If things are still running smoothly I may even begin making regular monthly investments here. I will see how annoying it is to deal with this type of investment at tax time though before I start doing that. If anyone has any questions about the site or my experience with it so far I'll try to answer them as best as I can.

0 votes
Facebook Twitter
A government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims. - Ayn Rand 

Smuft   Canada. Nov 23 2012 01:50. Posts 615

looks interesting.

What kind of protection is there against borrowers defaulting?

Also how much action is there for bigger loans?


AndrewSong    United States. Nov 23 2012 01:53. Posts 2336


  On November 23 2012 00:50 Smuft wrote:
looks interesting.

What kind of protection is there against borrowers defaulting?

Also how much action is there for bigger loans?



+1


CCMoz   United Kingdom. Nov 23 2012 02:30. Posts 922

+2

my balls your mouth 

CCMoz   United Kingdom. Nov 23 2012 02:37. Posts 922

+2

my balls your mouth 

pinbaLL    Sweden. Nov 23 2012 05:07. Posts 7243

dyou have to be american to invest?


Ket    United Kingdom. Nov 23 2012 05:08. Posts 8635


  On November 23 2012 00:50 Smuft wrote:
What kind of protection is there against borrowers defaulting?


recent footage of whoosel dealing with a defaulted lendingclub debtor

 Last edit: 23/11/2012 05:10

pinbaLL    Sweden. Nov 23 2012 05:20. Posts 7243

lol


Meat   . Nov 23 2012 06:09. Posts 3383


  On November 23 2012 04:07 pinbaLL wrote:
dyou have to be american to invest?


I think so:


 
You must reside in one of the states listed below and meet that state’s Financial Suitability conditions, as described below.

Individual investors can invest in Notes if they are a resident of: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

Investors who are residents of states other than California or Kentucky must have (a) an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or (b) have a net worth of at least $250,000 (determined with the same exclusions).


DhakhaR   United Kingdom. Nov 23 2012 07:03. Posts 189


  On November 23 2012 00:50 Smuft wrote:
What kind of protection is there against borrowers defaulting?



See previous blog entry


n0rthf4ce    United States. Nov 23 2012 14:10. Posts 8119

this is super interesting and probably could give my wife something cool to do since she is smarter than me!

www.cardrunners.com 

albonycee   United States. Nov 24 2012 13:56. Posts 2749

what type of criteria do you use?

(insert stupid shit)aments 

thewh00sel    United States. Nov 24 2012 14:19. Posts 2720


  On November 23 2012 00:50 Smuft wrote:
looks interesting.

What kind of protection is there against borrowers defaulting?

Also how much action is there for bigger loans?


The first layer of protection against defaults is a strict application to borrow. Lending Club accepts less than 10% of people who apply for loans. If a loan becomes late, Lending Club does all of the "collections" duties on its own. They will attempt to contact and receive payment on your behalf. Other than that, you can't really do anything except diversify in a large amount of loans. Lending club boasts that anyone who has invested in at least 800 notes has shown a profit.

As far as bigger loans, you can borrow up to $30,000 with LC. And many loans do get approved for $35,000. You can loan money in increments as small as $25 per loan. Even with a 10k+ deposit on lending club I don't see why you would go higher than $25 per loan, but you can choose to loan in $50 or $100, up to $250 increments.



  On November 24 2012 12:56 albonycee wrote:
what type of criteria do you use?


I pretty much just researched what other people who have had success are doing and copy them. Here's a cut-out from an article that I used to get started with Lending Club using LendStats.com for filtering/strategy testing:


  There are many variables at play in a loan, and I figured if I could figure out which variables led to defaults and avoid those – I would increase my profits. My goal is to get 15% net annualized return. Anything under 10% will be a disappointment, given my calculated strategy. Here are the variables I’ve concluded are most important.

1. Credit Grade: D1 – G5. This is critical for high returns. D1 credit grade starts at 16.5%. If you invest in A1, you’re only looking at 6.88% minus fees and defaults. The data shows that default rate does not scale with the interest rates, meaning the riskier loans will return more on average. Diversification across many loans becomes critical.

2. Loan amount: 0-35000. The data showed that the larger loans were not riskier, so I am not avoiding them unlike many of my peers using Lending Club.

3. Minimum Open Lines: 6. This shows that the candidate does have several open lines of credit in good standing. Less than 6 is unusual, especially because I think Lending Club filters many of them out.

4. Total Lines: 15. This proved the candidate has had enough likes open over the years to build some credibility.

5. Minimum Employment Length: 4 years. This proves the candidate has reliable employment. Losing one's job is the most common reason for default.

6. Loan purpose: Debt consolidation, house, moving expenses, and weddings. I do not include things like car purchases, credit cards, education, vacations, or small business costs. These things are all more likely to default. It makes sense, too. Lending Club does not have extremely low interest rates, so anyone that is using them to buy a car or go on vacation likely is not wise with money. Credit card consolidation, for example, reduced historical returns by 1.5%.

7. Home Ownership Status: Own or mortgage. I did not include renting. Not that I have a problem with people who rent, but it reduced the returns by 1%.

8. States excluded: California. Sorry to anyone from California, but you guys default too much. CA dropped returns by 0.5% historically.

Looking at the numbers, investing in D1 credit and above with no other filtering has extremely high default rates. In fact, the historical return is only 7.27%, which is terrible given the risk/reward ratio. On the other hand, using my filters listed above, that number is more than doubled, with a historical return of 15%.

from http://www.bravenewlife.com/08/lending-club-investment-strategy/

A government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims. - Ayn Rand 

albonycee   United States. Nov 24 2012 16:34. Posts 2749

what do you think?

A$25 (1)
B$50 (2)
C$100 (4)
D$50 (2)
E$0 (0)
F$25 (1)
G$0 (0)

Summary
Average Interest Rate: 15.37%
Expected Default Rate: 4.43%
Service Charge: 0.65%
Projected Return: 10.29%

(insert stupid shit)aments 

 





Poker Streams


















Copyright © 2017. LiquidPoker.net All Rights Reserved
Contact Advertise Sitemap