Author Topic: Default rate and how quickly loans get funded  (Read 14256 times)

flyp52

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Default rate and how quickly loans get funded
« on: May 01, 2013, 09:43:49 PM »

For Anil, Bryce, Viking and anyone else - Has anyone yet produced a chart that shows default rate as a function of loan grade and how quickly a loan is funded (normalized for loan amount)?  Is the necessary data or reasonable proxy available to do that?

I pick loans manually, mainly 36 mo D-G. When I can, I'll try to buy right when loans get posted. The competition for loans is brutal.  I've seen attractive loans with as much as $3K-$4K left to fund get snapped up in the few seconds it takes me to do the three clicks to get a position in the loan.  Good-looking loans are getting fully funded in fractions of a minute.  Do these loans perform better? If so, how much better?

I'm mainly interested in loans that have been funding recently, say 2013, now that competition for loans is so fierce, so I understand there won't be good data available for another year or so.  But I'd be curious to see the historical performance also.

Thanks!

Show Me The $

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Re: Default rate and how quickly loans get funded
« Reply #1 on: May 02, 2013, 03:37:44 AM »
Maybe it is just me, but I have never seen this massive funding in an instant. I am SURE it exists, but how do I see it with my own eyes? I am mostly invested, just need to do a few notes at a time to reinvest returned $.

Sorry no actual answer for your question here :)

Fred

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Re: Default rate and how quickly loans get funded
« Reply #2 on: May 02, 2013, 08:23:15 AM »
LC shares several timestamp data, such as acceptance, listing, credit pull, expiration, etc.  I am not aware of publicly available data to capture the timestamp of when loan is 100% funded.

Besides, if you are "mainly interested in loans that have been funding recently, say 2013, ...", the population for default loans would still be small.

brycemason

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Re: Default rate and how quickly loans get funded
« Reply #3 on: May 02, 2013, 09:35:33 AM »
One would need to reconstruct the "fill time" from manually saved Browsenotes files, if they had been regularly saving them at, say, ten minute intervals. Otherwise, there are only proxies available, such as the time between the list date and the borrower acceptance date. There is also the number of investors, so one could construct an average investment chunk (those with higher averages have faster times, most likely). The former is probably too coarse these days, when one is talking about the difference between filling in two minutes vs. ten vs. two days, and the randomness surrounding the borrower accept time would wash that signal out. I suppose LC could add the loan filled date and that would be the perfect measure.

If one wants to see the massive funding, take ten minutes to download a Browsenotes file at 10:01 today and at 10:11. See what's there.

Fred

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Re: Default rate and how quickly loans get funded
« Reply #4 on: May 02, 2013, 09:55:12 AM »
I suppose LC could add the loan filled date and that would be the perfect measure.

Agreed.  This should be on our LC data wish list. 

Also, it would be nice if LC can share loan payment history, not just the cumulative principal+interest+fee payment.

brycemason

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Re: Default rate and how quickly loans get funded
« Reply #5 on: May 02, 2013, 10:06:17 AM »
LC is sharing the full payment history, but I'm not sure who you have to know. One person here has a December extract file shared, and I've done some fun things with it.

Fred

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Re: Default rate and how quickly loans get funded
« Reply #6 on: May 02, 2013, 10:29:05 AM »
LC is sharing the full payment history, but I'm not sure who you have to know. One person here has a December extract file shared, and I've done some fun things with it.

Can anyone share this file with me (through PM if necessary)?

ee1x

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Re: Default rate and how quickly loans get funded
« Reply #7 on: May 02, 2013, 11:04:23 AM »
I have to believe that LC tracks this stuff internally even if it's not in their public data release. Such data is far too valuable to just be tossed out.
Investing since March 2012

yojoakak

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Re: Default rate and how quickly loans get funded
« Reply #8 on: May 02, 2013, 01:45:29 PM »
LC is sharing the full payment history, but I'm not sure who you have to know. One person here has a December extract file shared, and I've done some fun things with it.

Can anyone share this file with me (through PM if necessary)?

http://www.lendacademy.com/forum/index.php?topic=520.msg2838#msg2838

brycemason

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Re: Default rate and how quickly loans get funded
« Reply #9 on: May 02, 2013, 02:01:50 PM »
Maybe it is just me, but I have never seen this massive funding in an instant. I am SURE it exists, but how do I see it with my own eyes?...

Here's an example from P2P-Picks ProfitMax list today.

10:03: No loans identified.
10:04: 19 loans on list and only 1 had 10% or more funding.
10:09: 11 loans on list and only 2 had 60% or LESS funding.
10:59: all but one gone!

Randawl

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Re: Default rate and how quickly loans get funded
« Reply #10 on: May 02, 2013, 02:13:00 PM »
It won't be long before almost everyone uses some form of automated investing and LC will need to devise a queue system.

ee1x

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Re: Default rate and how quickly loans get funded
« Reply #11 on: May 02, 2013, 05:51:45 PM »
It won't be long before almost everyone uses some form of automated investing and LC will need to devise a queue system.

Randawl, can you elaborate on what you mean by "a queue system" here?
Investing since March 2012

LonghornSF

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Re: Default rate and how quickly loans get funded
« Reply #12 on: May 02, 2013, 06:46:23 PM »

I pick loans manually, mainly 36 mo D-G. When I can, I'll try to buy right when loans get posted. The competition for loans is brutal.  I've seen attractive loans with as much as $3K-$4K left to fund get snapped up in the few seconds it takes me to do the three clicks to get a position in the loan.  Good-looking loans are getting fully funded in fractions of a minute.  Do these loans perform better? If so, how much better?

I'm mainly interested in loans that have been funding recently, say 2013, now that competition for loans is so fierce, so I understand there won't be good data available for another year or so.  But I'd be curious to see the historical performance also.

I used to manually pick loans but many of the best loans are literally fully funded within minutes of being posted. Even using interestradar on "testing" mode can be too slow. I suspect we will be at a point this year (maybe we're there already?) when the best loans will effectively only be accessible by people with automated investing. Whenver I see a loan that's survived more than two posting cycles (i.e., was posted at 10am and is still available at 4pm) it's usually a low return loan.

yojoakak

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Re: Default rate and how quickly loans get funded
« Reply #13 on: May 02, 2013, 07:19:17 PM »
It won't be long before almost everyone uses some form of automated investing and LC will need to devise a queue system.

Randawl, can you elaborate on what you mean by "a queue system" here?

They should auction them off, like they do with US Treasuries:

"At the close of an auction, Treasury awards all noncompetitive bids that comply with the auction rules and then accepts competitive bids in ascending order of their rate or yield (lowest to highest) until the quantity of awarded bids reaches the offering amount. All bidders will receive the same rate or yield at the highest accepted bid."

http://www.treasurydirect.gov/instit/auctfund/work/work.htm

Randawl

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Re: Default rate and how quickly loans get funded
« Reply #14 on: May 02, 2013, 07:52:48 PM »
It won't be long before almost everyone uses some form of automated investing and LC will need to devise a queue system.

Randawl, can you elaborate on what you mean by "a queue system" here?

Investing limits per loan per investor or a round robin system.


Here is a link to some discussion regarding the queue system that Zopa uses:
http://talk.zopa.com/topic/8173-the-new-lending-queue/
http://blog.zopa.com/2012/08/21/the-zopa-part-3-%e2%80%93-your-place-in-the-queue/

Likewise for Isepankur:
http://forum.isepankur.ee/f_postst1690_Is-lender-based-queuing-unfair.aspx

Quote
Up to the beginning of January it was no problem to invest my funds fast (compare lower part of chart 4). Since then lender money influx hugely outpaces borrower supply. Due to the structure of bidding mechanism this did not result in sinking interest rates (average interest rate of my successful bids is 26%) but rather in more seldom possibilities to bid. Isepankur reacted to the circumstances by announcing a  limit of 500 Euro for the maximum amount any lender may bid on any loan and introducing a lender queue. This has a somewhat British touch to me I always picture the lines at a bus station. Once my automated bidding profiles made a bid I have to step back to the end of the line and patiently wait my turn to make the next bid. The rationing has led to more equal opportunities but it is still hard to invest more funds.

Above quote from the following site at the bottom of the page:
http://www.wiseclerk.com/group-news/countries/baltic-review-of-my-isepankur-portfolio-after-5-month-of-p2p-lending/.