Author Topic: Borrowers' loan descriptions (all blank)  (Read 4474 times)

soksniffer

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Borrowers' loan descriptions (all blank)
« on: January 26, 2015, 10:46:01 PM »
I'm new to p2p investing, and after pulling 4/5's of the money I'd intended to invest with prosper back out due to their website having (in my opinion) an awful lot of problems for what's supposed to be a reputable financial platform, have been exploring lending club.  I'm trying to do my (preliminary) due diligence of researching loans, but of the 20 or so I've clicked on, not a single borrower has offered a word of explanation as to why they wish to borrow money.  Here's an example:

https://www.lendingclub.com/browse/loanDetail.action?loan_id=39792276&previous=browse

This "farm hand" with 96% credit utilization wants another $20K for... what?  I don't have any idea because he hasn't offered any explanation.  And yet he's (at the time I'm writing this) 87% funded, with none of those investors seeming to have asked what he'd planning on doing with the money.

Am I missing something here?  I really feel like I am. How do you decide who are good loan candidates when they're all just anonymous cyphers telling nothing about themselves or their plans?

Fred93

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Re: Borrowers' loan descriptions (all blank)
« Reply #1 on: January 26, 2015, 11:26:00 PM »
I'm trying to do my (preliminary) due diligence of researching loans, but of the 20 or so I've clicked on, not a single borrower has offered a word of explanation as to why they wish to borrow money.
...
Am I missing something here?

The loan description is a depricated feature.  They used to have descriptions on loans, but they disabled them some time ago.  I don't keep track of dates.  Seems like it was several years ago.  They never bothered to clean up all the investor user interface and API to remove the places the description used to appear. 

lascott

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Re: Borrowers' loan descriptions (all blank)
« Reply #2 on: January 27, 2015, 12:53:05 AM »
This "farm hand" with 96% credit utilization wants another $20K for... what?  I don't have any idea because he hasn't offered any explanation.  And yet he's (at the time I'm writing this) 87% funded, with none of those investors seeming to have asked what he'd planning on doing with the money.
I wasn't around when there were descriptions but read pros/cons a few times.  Problem was that you had no idea if it was made up.  Now a days folks are using either basic filters (credit util < ##% AND $request < $## AND ....) or a rating system or various other algorithms (like genetics).  So basically analyzing the numbers.
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

avid investor

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Re: Borrowers' loan descriptions (all blank)
« Reply #3 on: January 27, 2015, 07:34:24 AM »
This "farm hand" with 96% credit utilization wants another $20K for... what?  I don't have any idea because he hasn't offered any explanation.  And yet he's (at the time I'm writing this) 87% funded, with none of those investors seeming to have asked what he'd planning on doing with the money.
I wasn't around when there were descriptions but read pros/cons a few times.  Problem was that you had no idea if it was made up.  Now a days folks are using either basic filters (credit util < ##% AND $request < $## AND ....) or a rating system or various other algorithms (like genetics).  So basically analyzing the numbers.
I was "around then", and to my surprise, I had a disproportionate number of defaults on the loans where a description WAS entered vs. where no text was entered in that field.  Almost like the borrower "protested too much" ... to borrow from Shakespeare.

lascott

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Re: Borrowers' loan descriptions (all blank)
« Reply #4 on: January 27, 2015, 11:31:46 AM »
This "farm hand" with 96% credit utilization wants another $20K for... what?  I don't have any idea because he hasn't offered any explanation.  And yet he's (at the time I'm writing this) 87% funded, with none of those investors seeming to have asked what he'd planning on doing with the money.
I wasn't around when there were descriptions but read pros/cons a few times.  Problem was that you had no idea if it was made up.  Now a days folks are using either basic filters (credit util < ##% AND $request < $## AND ....) or a rating system or various other algorithms (like genetics).  So basically analyzing the numbers.
I was "around then", and to my surprise, I had a disproportionate number of defaults on the loans where a description WAS entered vs. where no text was entered in that field.  Almost like the borrower "protested too much" ... to borrow from Shakespeare.
;)
I think you meant: "thou doth protest too much"
Urban Dictionary: "Overly insistent about something, to the point where the opposite is most likely true."
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

avid investor

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Re: Borrowers' loan descriptions (all blank)
« Reply #5 on: January 27, 2015, 01:23:01 PM »
Yes, I was paraphrasing.  You got the point.

soksniffer

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Re: Borrowers' loan descriptions (all blank)
« Reply #6 on: January 29, 2015, 10:13:00 PM »
I see... said the blind carpenter as he picked up his hammer and saw.  (Substitute "investor" for carpenter.)  Thank you for the replies.  I wonder why they haven't just removed that field altogether, though -- another case of retail investors playing second fiddle to institutions?  But after such a long time surely they could task an intern with cleaning things up.  Oh, well.  Thanks again.

rawraw

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Re: Borrowers' loan descriptions (all blank)
« Reply #7 on: January 30, 2015, 11:29:18 AM »
The field may be useful in the future.  For example, I couldn't realistically seeing real business loans without some sort of actual narrative.

TonySaunders

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Re: Borrowers' loan descriptions (all blank)
« Reply #8 on: January 30, 2015, 12:04:43 PM »
It's unintuitive, but it turns out that borrowers who write long descriptions tend to default more often. You are statistically better off investing in borrowers who write little or nothing.

I speculate that maybe it's the liars that do a lot of talking, when it comes to loans. And people with good credit mostly assume that you are going to rely on what the data tells you anyway.

My personal anecdotal experience is that it doesn't matter one bit what someone has to say. But it DOES seem to help if you avoid borrowers who can't spell and/or ignore grammar and/or don't know the difference between there/they're/their, that kind of stuff.