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LendingClub Files for $500M IPO

techcrunch.com

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Re: LendingClub Files for $500M IPO

#3

Post by JoshTriplett »

cm2012 wrote: post #2

Everyone I talk to has had good experiences with lending on lending club. Has anyone here had a bad experience?

As with any higher-risk higher-reward investment, there are almost certainly people who dove into it far too enthusiastically and lost more than they could afford to lose.

Most such reports probably won't end up in the comments here.

Re: LendingClub Files for $500M IPO

#8

Post by pktgen »

JoshTriplett wrote: post #3
cm2012 wrote: post #2

Everyone I talk to has had good experiences with lending on lending club. Has anyone here had a bad experience?

As with any higher-risk higher-reward investment, there are almost certainly people who dove into it far too enthusiastically and lost more than they could afford to lose. Most such reports probably won't end up in the comments here.

Technically, I believe one is only supposed to invest up to 10% of their net worth in Lending Club, and must meet some other financial suitability standards: https://www.lendingclub.com/info/state-financial-suitability....

Of course, as far as I can see this is just a checkbox saying "I agree and meet these standards." No way for them to verify.

Re: LendingClub Files for $500M IPO

#9

Post by frankdenbow »

MIKEMAC972 wrote: post #4

LendingClub reported $86.9 million of revenue in the first six months of the 2014, up 134 percent. P2P is fundamentally shifting how people gets loans- banks should definitely be paying attention.

The paragraph after gives more context:

"The cost of that revenue growth swung LendingClub from profit to loss. In The first half of 2013, LendingClub had net income of $1.74 million. In the same period this year, the company lost $16.49 million.

The company’s sales and marketing costs jumped from $16.12 million to $39.81 million when comparing the first half of 2013 and the first half of 2014."

Re: LendingClub Files for $500M IPO

#10

Post by AjithAntony »

cm2012 wrote: post #2

Everyone I talk to has had good experiences with lending on lending club. Has anyone here had a bad experience?

It's not bad, but not exceptionally good in terms of returns. I have had my account for 5yrs, and haven't added any more money in the last two.

- The default rate is higher than I expected. In the early years, the A credit rating was reported as nearly 0 defaults, and B had few. But now that is not the case. 5-6% of my loans have defaulted. Most are A/B rated Some not even making a single payment.

- The credit standards seem to move a lot

- The quality of borrower is worse than it used to be. When I started I used to scrutinize every loan, I'd be impressed to see how much detail the borrowers would share. I liked to read their stories and learn to trust that they would repay me. Now you don't see much. It's all button mashing. There are enough lenders to fund all the loans, nobody puts the effort in. I don't even bother doing the manual search anymore either.

- The dashboard says my net annualized returns are around 5%. I guess that is about right. But it's not liquid. If I liquidated all the notes today, I'd probably lose all of the gains. If I stopped reinvesting, I'd probably see a bunch more defaults bring my returns down before i got all the principal back

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