Author Topic: LC Lowers Some A SubGrade Interest Rates  (Read 1109 times)

Rob L

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LC Lowers Some A SubGrade Interest Rates
« on: November 08, 2017, 09:33:11 AM »
In "Q3 2017: An Update from our CIO" from the LC blog:

"LendingClub Rates. On the LendingClub platform, we are implementing decreases in two A subgrades (A2 and A3) this quarter, from 7.07% to 6.08% for A2, and from 7.21% to 6.72% for A3. This reflects the shift to higher quality borrower profiles we are seeing and our expectations on charge-offs. Overall, we expect pricing for A grade loans to remain relatively stable."

My guess this was forced by competition (Marcus, et al). Originations trump investor returns every time, but hey they gotta survive.

For the whole blog post see https://blog.lendingclub.com/q3-2017-cio-update/.



Reginald

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Re: LC Lowers Some A SubGrade Interest Rates
« Reply #1 on: November 17, 2017, 11:14:48 AM »
Well that sucks.  Even if you go for lower interest rates, you cant escape the threat of scam artists, and people on their deathbeds taking out loans to 'consolidate'. Now significant drops to the A-grade rates. Retail investors are getting bled to death. I should have noticed it a lot sooner. Their more recent quarterly earnings, and their 'temporary freeze' on offering loans to the lower grades speaks to the fact that there is a serious sub-prime debt problem. Lending club should stop charging off, and instead eat the cost of the excessive chargeoffs or they will not get new investors.

We all know the Fed is raising their rates in December and February. Lending Club needs to get at least give  the investors a chance to see positive returns year over year. Since the tax code doesnt favor P2P interest investments (and losses cant offset interest, only cap gains) I am negative for the last 2 years on my after tax LC investments in taxable accounts. I'm disappointed in their lack of honesty - especially when they still advertise their 'solid returns': 

Fred93

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Re: LC Lowers Some A SubGrade Interest Rates
« Reply #2 on: December 04, 2017, 09:26:32 AM »
I've updated my picture...


Rob L

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Re: LC Lowers Some A SubGrade Interest Rates
« Reply #3 on: December 04, 2017, 12:28:16 PM »
Do you not have the data for earlier times or have you put updates of earlier times on the todo list?

Fred93

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Re: LC Lowers Some A SubGrade Interest Rates
« Reply #4 on: December 04, 2017, 04:57:31 PM »
Do you not have the data for earlier times or have you put updates of earlier times on the todo list?

I gathered this data from their 8K filings.  I forget the sequence of events... I stopped going back into time at some point in the search, and now I forget whether that was because I just thought it made sense to stop or whether the 8K's stopped.