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LendingClub Files for $500M IPO

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Re: LendingClub Files for $500M IPO

#21

Post by rtanaka »

jliptzin wrote: post #14
rtanaka wrote: post #13

Earlier quoted context omitted.

I spent a lot of time handpicking my 200 investments and I'm sitting on a 12.23% (adjusted) return right now. I think by most measures, this would qualify as a good experience. For me though, it's not. When someone defaults on me (I've had 1 officially and 2 more that will likely get charged off soon) I feel bad about it. Yes, it's expected and yes, LC makes a reasonable amount of effort to collect but it doesn't hel…

Sometimes shit happens and people really just don't have the money to pay back their loans. I'm sure they feel even worse about it.

I'm sure they do and I hold no ill will toward them. I still feel bad about it though which takes away from how I feel about lending club.

Re: LendingClub Files for $500M IPO

#22

Post by digikata »

cm2012 wrote: post #2

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

I found this data the most informative: https://www.lendingclub.com/info/statistics-performance.acti...

It gives you a model for 3-30 month returns, adjusted for losses. I have an experimental amount invested in LendingClub, about 85% loaned out at the moment, and have been in for only a quarter year so far. I've been hand picking loans in small increments, but it's too early to say anything about the quality of my pick criteria because so far there hasn't been so much as a late payment yet.

Re: LendingClub Files for $500M IPO

#23

Post by halcyondaze »

I really like LendingClub. I was a bit mad at my default rate, as I followed stringent criteria, but I'm still sitting at 6.5%. I actually had someone die that I lended to and it really hit home with me for some reason.

The return isn't amazing, but I'm not doing anything else with that capital right now, and don't care to toss it in a different vehicle right now. It's fun to use for me.

Re: LendingClub Files for $500M IPO

#24

Post by [deleted] »

AjithAntony wrote: post #17
rtanaka wrote: post #13

Earlier quoted context omitted.

I spent a lot of time handpicking my 200 investments and I'm sitting on a 12.23% (adjusted) return right now. I think by most measures, this would qualify as a good experience. For me though, it's not. When someone defaults on me (I've had 1 officially and 2 more that will likely get charged off soon) I feel bad about it. Yes, it's expected and yes, LC makes a reasonable amount of effort to collect but it doesn't hel…

How long have you held these notes? That seems like an exceptionally high return, and low default rate, unless this is like your first year.

[deleted]

Re: LendingClub Files for $500M IPO

#26

Post by pdovy »

cm2012 wrote: post #2

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

Besides what others have mentioned, it's worth noting that at this point is almost impossible to hand pick most of your loans. They get dumped onto the market at set times, and most of the "good" looking low grade loans are snapped up almost immediately, so it can be difficult to build a portfolio with exposure to those grades.

What I ultimately ended up doing, and maybe this was their goal, is just to sign-up with their auto-invest system. They lowered the minimum down to something small like $5000, and you can twiddle a few pretty coarse knobs to say what kind of risk exposure you want. At that point it's completely hands-off for me, and I just track the progress - every time I accrue $25 worth of cash from the existing investments, they buy another note on my behalf.

I'd definitely be careful how much cash you throw at this, I thought it'd be an interesting experiment and my portfolio has done fine, but it's hard to quantify the risks. If the economy tanks, how much will the default rate increase? Also as others have mentioned, the secondary market for these notes is really poor - you'd take a huge loss to liquidate your position.

Re: LendingClub Files for $500M IPO

#27

Post by obvious_throw »

jliptzin wrote: post #18

I have had a LC account for about 4 years. The returns aren't that great, around 6%. I did some random loans of mixed interest rates, but have also applied my own set of filters which brought the rate up a little bit over the last year. The notes are also not liquid. You will suffer huge losses if you need to sell. I thought this would mean that I could get other people's notes at deep discounts...typically sellers w…

6% returns in a ZIRP environment are actually quite fantastic. Even junk bonds yield less than that.

Re: LendingClub Files for $500M IPO

#28

Post by cylinder »

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.

Banks don't really care about these types of loans. They do their unsecured individual lending through credit cards. At the retail level they are more concerned with mortgages, HELOC, high net worth individuals, and collateralized business lending.

Re: LendingClub Files for $500M IPO

#29

Post by AjithAntony »

rtanaka wrote: post #20
AjithAntony wrote: post #17

Earlier quoted context omitted.

How long have you held these notes? That seems like an exceptionally high return, and low default rate, unless this is like your first year.

I started in January of this year. It does seem high for sure. I'd like to think I spent a lot of time finding people that had the most to lose when making a decision (mortgage, relatively high income, stable job, etc) to lower my risk. But who knows. edit: so i just checked for real. looks like it's been over a year (time flies). for the record, it shows 199 (instead of my stated 200) because i put $50 into one inve…

> i put $50 into one investment instead of the standard $25

It's funny you mention that. I went through a phase where I started doing $50 and $100, becuase I couldn't find enough high quality borrowers. I figured that since I trusted these people with $25, why not a little more. It just hurts more when they default. When I see a high value note charged-off, I just feel more betrayed than usual.

Re: LendingClub Files for $500M IPO

#30

Post by AjithAntony »

obvious_throw wrote: post #27
jliptzin wrote: post #18

I have had a LC account for about 4 years. The returns aren't that great, around 6%. I did some random loans of mixed interest rates, but have also applied my own set of filters which brought the rate up a little bit over the last year. The notes are also not liquid. You will suffer huge losses if you need to sell. I thought this would mean that I could get other people's notes at deep discounts...typically sellers w…

6% returns in a ZIRP environment are actually quite fantastic. Even junk bonds yield less than that.

But there is a market for junk bonds. You could exit your position today if you want.
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