Author Topic: Interest Rate Calculation bei Lending Club  (Read 3361 times)

cashcount

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Interest Rate Calculation bei Lending Club
« on: April 04, 2014, 12:32:09 PM »
Hi all,

I want to start investing in P2P loans, but before I want to understand how me return is calculated. Here
https://www.lendingclub.com/public/how-we-set-interest-rates.action
Lending Club displays how they set rates. But I have to pay a 1% fee and I don't see where this is taken into account. This fee has a different effect for 36 and 60 months right? How can the interest rate be equal then?

Thanks

AnilG

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Re: Interest Rate Calculation bei Lending Club
« Reply #1 on: April 04, 2014, 01:32:48 PM »
This is the page you need to understand return calculations.

How We Measure Net Annualized Return https://www.lendingclub.com/public/lendersPerformanceHelp.action

Also look at the bottom of the page that you linked to. It shows the grade modifier based on loan term, which explains why the 36 and 60 month loans have same interest for same grade. LC accounts for loan term by changing grade.

Hi all,

I want to start investing in P2P loans, but before I want to understand how me return is calculated. Here
https://www.lendingclub.com/public/how-we-set-interest-rates.action
Lending Club displays how they set rates. But I have to pay a 1% fee and I don't see where this is taken into account. This fee has a different effect for 36 and 60 months right? How can the interest rate be equal then?

Thanks
« Last Edit: April 04, 2014, 01:46:01 PM by AnilG »
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RaymondG

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Re: Interest Rate Calculation bei Lending Club
« Reply #2 on: April 04, 2014, 01:34:19 PM »
Hi all,

I want to start investing in P2P loans, but before I want to understand how me return is calculated. Here
https://www.lendingclub.com/public/how-we-set-interest-rates.action
Lending Club displays how they set rates. But I have to pay a 1% fee and I don't see where this is taken into account. This fee has a different effect for 36 and 60 months right? How can the interest rate be equal then?

Thanks

The interest rate set on the loan determines monthly payment. 1% fee is not included in it and this fee is what you pay for the service provided by LC.

james

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Re: Interest Rate Calculation bei Lending Club
« Reply #3 on: April 04, 2014, 11:35:46 PM »
Do your own math.  LC is good, but not as good as it presents itself.  $ on the side are not included, newer accounts look better than older ones, etc
Be first, be smarter, or cheat. 2 of 3 ain't bad.

cashcount

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Re: Interest Rate Calculation bei Lending Club
« Reply #4 on: April 10, 2014, 03:03:09 AM »
Hey all,

thanks for the replies! Makes sense :-).

Booleans

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Re: Interest Rate Calculation bei Lending Club
« Reply #5 on: April 12, 2014, 10:32:05 AM »
It's too bad I don't invest in individual securities or else LC is a stock I'd definitely pick up (assuming a non-absurd valuation). I'll just keep putting money into loans instead.