Comments on: Peer to Peer Lending? Lending Club Funds 24% of Loans http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/ Staying on top of the person to person lending revolution Wed, 10 Feb 2010 21:19:07 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Logan http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-428 Logan Wed, 07 Oct 2009 07:41:12 +0000 http://www.p2plendingnews.com/?p=115#comment-428 The lowest interest rate is 7% but if you have a 2% default rate it would drop to 5% however lendingclub has changed a lot since these comments were made. I've been in for over half a year now and my net return is around 12.5% and I've only had 1 note out of 151 go late so far. I'm very selective and browse several times a week for good loans. The disadvantage to LC's set interest rates is that they don't move with the market, the advantage is that if you know what you're looking for then you can find good notes with higher interest rates than they deserve. The average lender gets over 9.5% back, that's netted with all charge-offs subtracted. As for whether you should invest everything, you should talk to a CPA but take baby steps. Put in 1-2k and invest slowly. Don't feel pressured to spend it all the day it arrives in your account, take 1-2 months if that's what you need to find good notes because you want as many different notes as possible to spread risk. Some of my friends are also into LC and they were always asking for tips on what loans to get so I started a blog called Peer2Pick, if you'd like some note suggestions the check it out: peer2pick.blogger.com I'll be posting investment tips on there soon. The lowest interest rate is 7% but if you have a 2% default rate it would drop to 5% however lendingclub has changed a lot since these comments were made. I’ve been in for over half a year now and my net return is around 12.5% and I’ve only had 1 note out of 151 go late so far.
I’m very selective and browse several times a week for good loans. The disadvantage to LC’s set interest rates is that they don’t move with the market, the advantage is that if you know what you’re looking for then you can find good notes with higher interest rates than they deserve.
The average lender gets over 9.5% back, that’s netted with all charge-offs subtracted.
As for whether you should invest everything, you should talk to a CPA but take baby steps. Put in 1-2k and invest slowly. Don’t feel pressured to spend it all the day it arrives in your account, take 1-2 months if that’s what you need to find good notes because you want as many different notes as possible to spread risk.
Some of my friends are also into LC and they were always asking for tips on what loans to get so I started a blog called Peer2Pick, if you’d like some note suggestions the check it out: peer2pick.blogger.com I’ll be posting investment tips on there soon.

]]> By: Mahesh http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-330 Mahesh Fri, 14 Aug 2009 12:48:01 +0000 http://www.p2plendingnews.com/?p=115#comment-330 Fred, why do you say "I personally expect to only receive a 3.5-5% return annually under a best case scenario"? how do you calculate that? even their lowest rates are in the 7% range. i'm new to LC and don't quite understand the nuances of how some of these things work. would you advocate investing your nest egg with them? getting nervous... Fred, why do you say “I personally expect to only receive a 3.5-5% return annually under a best case scenario”? how do you calculate that? even their lowest rates are in the 7% range. i’m new to LC and don’t quite understand the nuances of how some of these things work. would you advocate investing your nest egg with them? getting nervous…

]]> By: Lending Club Posts Strong 1H 2009, Loans Growing 7% Per Month | P2P Lending News http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-220 Lending Club Posts Strong 1H 2009, Loans Growing 7% Per Month | P2P Lending News Thu, 02 Jul 2009 04:33:51 +0000 http://www.p2plendingnews.com/?p=115#comment-220 [...] they re-launched with SEC approval in October 2008, Lending Club continued funding loans from its own pocket, up to a third of loans funded through 2008 and to a lesser extent in 2009. This helps to explain [...] [...] they re-launched with SEC approval in October 2008, Lending Club continued funding loans from its own pocket, up to a third of loans funded through 2008 and to a lesser extent in 2009. This helps to explain [...]

]]> By: Don’t Count Loanio Out; Files S-1 with SEC | P2P Lending News http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-204 Don’t Count Loanio Out; Files S-1 with SEC | P2P Lending News Thu, 25 Jun 2009 00:27:10 +0000 http://www.p2plendingnews.com/?p=115#comment-204 [...] interesting disclosure about the company funding loans a la Lending Club appears on page [...] [...] interesting disclosure about the company funding loans a la Lending Club appears on page [...]

]]> By: P2P Lending News http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-115 P2P Lending News Fri, 10 Apr 2009 22:34:38 +0000 http://www.p2plendingnews.com/?p=115#comment-115 No, it's still there. There are two documents that LC files with the SEC, one is the listing summary, the other is the sales summary. Only the sales summary contains the amount (if any) that LC committed to a loan. No, it’s still there. There are two documents that LC files with the SEC, one is the listing summary, the other is the sales summary. Only the sales summary contains the amount (if any) that LC committed to a loan.

]]> By: Mike http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-113 Mike Fri, 10 Apr 2009 21:42:31 +0000 http://www.p2plendingnews.com/?p=115#comment-113 I may be mistaken, but I think LC removed the information regarding their contribution to a loan in the prospectus. It used to be located in the last box on the right on the loan listing prospectus, as in the screen shot above. Please let me know if this is true. I may be mistaken, but I think LC removed the information regarding their contribution to a loan in the prospectus. It used to be located in the last box on the right on the loan listing prospectus, as in the screen shot above. Please let me know if this is true.

]]> By: Lending Club’s CEO Explains Loan Funding, Privacy Issues | P2P Lending News http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-112 Lending Club’s CEO Explains Loan Funding, Privacy Issues | P2P Lending News Thu, 09 Apr 2009 16:35:37 +0000 http://www.p2plendingnews.com/?p=115#comment-112 [...] March 10, P2P Lending News published a story about how Lending Club had funded 24% of the loans issued through their platform. Renaud Laplanche, the Founder and CEO of Lending Club was nice [...] [...] March 10, P2P Lending News published a story about how Lending Club had funded 24% of the loans issued through their platform. Renaud Laplanche, the Founder and CEO of Lending Club was nice [...]

]]> By: Lending Club to Announce $12 Million in New Venture Capital? | P2P Lending News http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-48 Lending Club to Announce $12 Million in New Venture Capital? | P2P Lending News Tue, 17 Mar 2009 22:45:46 +0000 http://www.p2plendingnews.com/?p=115#comment-48 [...] confirms my suspicion just last week that Lending Club is running a little low on funds after their recent lending binge. On top of Lending Club’s previous fundraising of $16.4 million, A $12 million round would [...] [...] confirms my suspicion just last week that Lending Club is running a little low on funds after their recent lending binge. On top of Lending Club’s previous fundraising of $16.4 million, A $12 million round would [...]

]]> By: Tom http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-35 Tom Tue, 17 Mar 2009 15:16:10 +0000 http://www.p2plendingnews.com/?p=115#comment-35 I think it's actually a good thing that LC funds some of their own loans. They have a classic chicken and egg problem - how do they get borrowers without lenders and how do they get lenders without borrowers. This helps them get to the point where the p2p market can operate by itself. In addition, with their own skin in the game to the tune of millions of dollars they are much more likely to take collections seriously. Their interests are closely aligned to the success of the borrower. I think it’s actually a good thing that LC funds some of their own loans. They have a classic chicken and egg problem – how do they get borrowers without lenders and how do they get lenders without borrowers. This helps them get to the point where the p2p market can operate by itself.

In addition, with their own skin in the game to the tune of millions of dollars they are much more likely to take collections seriously. Their interests are closely aligned to the success of the borrower.

]]> By: F http://www.p2plendingnews.com/2009/03/lending-club-self-funds-24-percent-of-loans/comment-page-1/#comment-28 F Wed, 11 Mar 2009 15:47:37 +0000 http://www.p2plendingnews.com/?p=115#comment-28 One more thing... I am fearful of LC's involvement in note origination as it could be used to influence the secondary note market's overall pricing. They could artificially lower the markup rates on notes or dump large quantities into the market thus diluting it and prolonging the selling process for legitimate lenders selling notes for liquidity. They should pledge to NEVER put any notes they purchased up for sale on the secondary market unless they make the market transparent (so I know who's selling it). I am also wondering why they purchased notes after the SEC ruling since such purchases can only be viewed as influencing default numbers in the long term and keeping them muddy. By muddy I mean LC can see more info than the lenders can typically see, therefore they may have made their purchasing decisions based upon full credit profile transparency advantages we lenders don't have. Unfair perhaps? One more thing… I am fearful of LC’s involvement in note origination as it could be used to influence the secondary note market’s overall pricing. They could artificially lower the markup rates on notes or dump large quantities into the market thus diluting it and prolonging the selling process for legitimate lenders selling notes for liquidity. They should pledge to NEVER put any notes they purchased up for sale on the secondary market unless they make the market transparent (so I know who’s selling it). I am also wondering why they purchased notes after the SEC ruling since such purchases can only be viewed as influencing default numbers in the long term and keeping them muddy. By muddy I mean LC can see more info than the lenders can typically see, therefore they may have made their purchasing decisions based upon full credit profile transparency advantages we lenders don’t have. Unfair perhaps?

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