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Jrb599
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Has anyone tried this? I signed for an account a couple of days ago and put a few dollars in it. I'm curious how others have done both borrowing and lending money. They post positive stats for people who do over 20k, but I'm looking in the 2k-3k range.

Most importantly, does anyone here have successful strategies for picking a loan to finance?

[Edited on February 5, 2013 at 4:24 PM. Reason : Oh yeah...because it might become a thing on here, if you need a referral please pm me]

2/5/2013 4:23:57 PM

David0603
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I'd pick a ton of very small loans so you're well diversified. As face said,

Quote :
"I used lending club in 2008 and actually had great returns. Only one default which was a bad loan I made. The guy had a really high verified income but he basically used the loan to pay off IRS debt and then he declared bankruptcy after a few payments.

I opened my portfolio on January 2008 and all the loans were paid off around Feb 2011 and my ROR was in the double digits, 12% I believe including the write-off. And that was during one of the worst credit crises ever.

It can definitely be a valuable piece of a well diversified portfolio. That being said I haven't checked their site since my portfolio cleared, so I don't know if their fee structure is still the same.


The key is to make loans to people who are credit worthy. Don't touch students, minorities, people looking to finance vacations, etc. Go after people with solid DTI, who can type complete sentences, who are consolidating debt and seem serious about paying you back."

2/5/2013 5:31:18 PM

Jrb599
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^paging face ; why don't you use it anymore.

2/5/2013 7:24:02 PM

Jrb599
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Also what would be considered a good DTI?

2/5/2013 7:42:03 PM

face
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conflicts with my profession, i'd have to file like 1,000 pages worth of disclosures. Not worth the headache.


Just look for a DTI that is sustainable. If someone is up over 60%, they are much more likely to end up filing bankruptcy. Don't get blinded by the interest rate.

A 18% interest rate is terrible if the guy defaults after 4 months.

2/5/2013 8:41:48 PM

Jrb599
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What grade loans did you go with? What about dtis? 30%

2/5/2013 9:13:03 PM

David0603
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^^ Well damn, if that's the only reason then I may actually check this site out.

2/6/2013 10:15:12 AM

Jrb599
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One thing I found is you can only buy notes on the 'trading market' from other lenders. Doesn't look like you can buy directly from lendingclub IF you're in NC.

[Edited on February 6, 2013 at 10:22 AM. Reason : was hoping face may know something about this.]

2/6/2013 10:19:55 AM

David0603
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How do they verify what you're using the money for?

2/6/2013 10:55:25 AM

Jrb599
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?

Apparently there is state legislation that won't let us finance loans on lendingclub.com It will only let us into the secondary market.

[Edited on February 6, 2013 at 11:29 AM. Reason : ]

2/6/2013 11:12:27 AM

face
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sorry last bought in 2008. After that they got involved with the SEC and i stopped using the site.

2/6/2013 11:29:48 AM

Jrb599
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makes sense

2/6/2013 1:12:02 PM

David0603
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Trading Member Application Received

Your application has been received and will be processed within 4 business days.

We will send you a notification email upon the approval of your application.

In the meantime, you can:

Go back to Lending Club

2/6/2013 1:15:44 PM

Jrb599
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Are you in NC?

2/6/2013 1:21:49 PM

David0603
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Yes

2/6/2013 1:29:28 PM

Jrb599
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SO are you planning on just doing secondary market trading?

2/6/2013 1:58:31 PM

David0603
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That's kind of my only option, right?

2/6/2013 2:16:03 PM

Jrb599
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I heard someone say they were gonna open an LLC through another state and trade through that.

2/6/2013 3:18:50 PM

David0603
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Uh, ok.

2/6/2013 4:09:58 PM

Jrb599
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^uh huh

Bought my first notes today. Pretty happy with the 2nd hand market

2/12/2013 9:39:16 AM

David0603
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Sweet. I haven't bought any yet. Any advice?

2/12/2013 12:41:32 PM

Jrb599
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Nope, what face says is pretty much spot on. The only thing to keep in mind is they don't regrade bonds on the 2nd hand market, so it's good to look at the persons change in credit score.

I wish they had better filters to narrow down bonds of interest

2/12/2013 12:56:08 PM

David0603
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What did you end up buying?

2/12/2013 1:00:30 PM

Jrb599
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I only put $50 in to start until I get paid.

But right now two ~$20 bonds. One is A5 and one is B1. Both around 9.5%. Both have an improved credit score change. Both have 26 payments left.

2/12/2013 1:07:08 PM

afripino
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Quote :
"Don't touch students, minorities, people looking to finance vacations, etc. "


2/12/2013 5:05:31 PM

Jrb599
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^Get that crap out of the lounge.


Found you can download all their lending data. Building a few statistical models now.

2/14/2013 10:15:01 AM

David0603
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I want in on said models.

2/14/2013 10:32:29 AM

Jrb599
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Be curious to see what I can get - might take a day or two since i have other things.

I'm hoping they'll let us buy in NC from them because I can score all the data and then pick the ones with the lowest probability of default

2/14/2013 10:40:09 AM

Jrb599
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^^If you have any derived variables you recommend, please let me know. This is not my domain.

2/14/2013 11:42:00 AM

David0603
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Ok, guess I'll do some research. Where do I start out "Browse Notes" ?
This search kind of sucks. Wish I could filter out "in grace period notes"
And what's up with the crazy markup on some of these?
Hmmmmm, maybe I should just be looking for ones marked "issued"?
Thoughts on this one: 144892 17879546

[Edited on February 14, 2013 at 12:05 PM. Reason : ]

2/14/2013 11:51:03 AM

Jrb599
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Sorry - I'm looking at there data set they have for downloading.

I've imported all the data into SAS, cleaned it for my needs, and now I want to make sure I have all variables I want. For example maybe I want age at time of loan, and I have birthdate and loan date.

So I would do age Age=loan_date-birth_dt;

Something like that. Deriving new variables. But since I don't have domain expertise, I wasn't sure if there were common variables created for this kind of stuff. Maybe face knows.

You can find their data here: https://www.lendingclub.com/info/download-data.action

[Edited on February 14, 2013 at 2:00 PM. Reason : ]

2/14/2013 1:47:33 PM

David0603
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Downloading now. Figured it would be bigger. I don't know SAS, just java.

2/14/2013 1:49:15 PM

TJB627
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I put $25/month into this for a few months a year or two back and I've just been reinvesting it over and over. I never put more than $25 in any one loan so I'm very diversified plus I have some other stringent rules that I use to narrow down which loans I invest in. My rate of return is better than any of my other investments unfortunately and I've never had a loan default. I wish I had more money in there although technically people from NC aren't allowed to invest I think.

2/14/2013 2:06:06 PM

Jrb599
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^thanks for the insight.

^^Models are meh, but I have a friend in default modeling who I'm gonna talk to.

2/14/2013 3:45:18 PM

dharney
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sounds cool, but as a friend mentioned to me sounds kinda sketch when one of their featured borrower guy is getting a 14.57% interest loan and bragging about it.

2/21/2013 4:08:41 PM

face
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Because many of these people are paying 50-100% more than that interest rate on their credit cards prior to securing these loans.


People think credit card rates are usurious but they are actually much lower than the interest people used to pay. Prior to credit cards when people wanted to make a big purchase (think a washing machine or new refrigerator) they'd have to make monthly payments to retailers at MUCH higher than 20% interest rates.

2/21/2013 9:02:58 PM

Jrb599
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Bought a couple more loans. Bought one I regret, oh well.

2/22/2013 11:11:07 AM

Str8BacardiL
Real Estate Agent
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Quote :
"I used lending club in 2008 and actually had great returns. Only one default which was a bad loan I made. The guy had a really high verified income but he basically used the loan to pay off IRS debt and then he declared bankruptcy after a few payments."


IRS debt = not bankruptable

Personal debt = bankruptable

That guy was a Michael Glapion or something.

[Edited on February 22, 2013 at 11:35 AM. Reason : .]

2/22/2013 11:34:46 AM

Jrb599
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Okay I sold my bad note for a $2 loss, and then of course they made a payment. Wish folio would update real time.

Anyways, when buying notes what general rules do you have? So far here are the general guidelines I have:

1) Speaks decent english
2) Debt consolidation only. No IRS payoffs, vacations, major purchases
3) Total loan should be under <15,000 (more likely to pay it off)
4) Loan payment should be roughly no more than 10%-15% of their income
5) DTI of about 15% or less.


Thoughts? Any other rules?

[Edited on February 23, 2013 at 7:26 AM. Reason : ]

2/23/2013 7:26:24 AM

face
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if it's like an addition to their home i think it's fine. i did a few weddings and didn't get burned on them either...

mainly i just tried to get a sense of If I knew this person and they asked me to borrow money would i expect to get it back. Worked well, but then again i had a fairly small sample size of maybe 25-30 loans probably before i quit

2/23/2013 10:01:12 AM

TJB627
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^^ I only look at the following:

Max Debt to Income Ratio - 15%
36 month loan
0 delinquencies
at least 90% funding progress
max loan amount $10k
credit score of at least 660

It severely limits the loans to invest in but I've never had one default or miss a payment.

2/23/2013 12:28:06 PM

Jrb599
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Some interesting stats -











^ Delinquencies doesn't look it's the most important thing. However, loan length is huge!

[Edited on February 23, 2013 at 2:11 PM. Reason : ]

2/23/2013 2:06:47 PM

neolithic
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Is there a data dictionary available for that data set? What does it mean if a loan is "charged off"?

Found a definition. It's bad.

[Edited on February 23, 2013 at 3:32 PM. Reason : .]

2/23/2013 3:31:14 PM

Jrb599
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Yes there is - i can't remember where it was. i did that analysis in a huryr.

2/23/2013 3:32:08 PM

Jrb599
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when I get my PC back - I think I'll try to create a few trees by grade (A,B,C,D, etc.)

2/24/2013 8:50:20 AM

neolithic
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NC is only allowed to participate in secondary markets? Is it worth signing up if you don't have access to the primary?

2/24/2013 9:35:13 AM

kiljadn
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Was looking at this the other day after Mint.com suggested it to me.

Interesting to see that NC only allows secondary trading. That, along with the fact that I'd need to fill out metric fucktons of paperwork like face mentioned due to my job takes away a lot of the appeal.

Oh well.

2/24/2013 10:11:15 AM

Jrb599
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Secondary market hasn't been bad at all. A lot of good bonds on it.

2/24/2013 12:03:31 PM

neolithic
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Not having access to the primary marker sort of kills it for me. Why doesn't NC allow access to it?

2/24/2013 1:18:44 PM

face
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I don't feel like looking into it but why would it matter to you if you are trading on the primary or secondary market?

2/24/2013 2:40:20 PM

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