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Messages - HighROI

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Investors - LC / When and how did you discover Lending Club?
« on: December 18, 2012, 10:11:40 PM »
It would be interesting to know how fellow investors came across Lending Club and Prosper.

For me, in March 2010 while I was studying and researching notes and bonds I came across Prosper's website in a Google search, from there I looked up Prosper in Wikipedia and learned of Lending Club.

Investors - LC / Re: Still having trouble with Foliofn
« on: December 16, 2012, 08:03:26 AM »
The new bug surely arrived, now many notes are showing ridiculous yield to maturity rates which makes sorting by ytm impossible.

Let's put it this way, to take out a loan greater than the amount you are willing to risk would not be the best idea, but if lets say you plan to invest monthly $1000 or a certain amount at the end of the year I can see no reason not to do the balance transfer and pay it down each month and gain an extra year.

Just one point to remember is that your credit score will drop some 30 points if you max out a credit card, so just be careful with that. Other than that all I can ask is which credit card has a 1% charge? the ones I know charge usually 3-5%.

Investors - P / Re: Prosper Roth IRA
« on: November 27, 2012, 08:07:33 AM »
Sorry, can I ask a dumb question?
I am also looking into the option of opening a Prosper IRA. So if you withdraw the money when you are 65 years old, all the income is tax free? But I am only 29. What happens if I need a portion of the money before than? For example, if in some years, I have $100k in the IRA and I suddenly need $20k, how do I take it out?

I see no one responded so here are a few of the basics. To withdraw money early there will be a penalty of 10% (with a roth ira you will pay regular income tax + 10%). There is a way to withdraw with no penalty if you withdraw a similar amount every year, Google "substantially equal distributions ira" (you will still need to pay regular income tax even with a roth ira). If you open a roth ira you can withdraw the initial contribution whenever you want no penalty and no income tax. You can withdraw certain amounts penalty free for purchasing a first home and medical expenses.

General P2P Lending Discussion / Re: About to blacklist folioFN in my email
« on: November 27, 2012, 07:43:18 AM »
It seems that you're relisting these notes every week again, you can select all then click reprice and submit once every few days and they won't expire.

If we look at only completed loans the data is very limited and unreliable, but even analyzing just the completed loans shows even a bigger difference. I don't know what software you use but the data you posted is flawed.

Here's the results: Loans issued thru October 2009


230 of 1794 12.8%

61 of 410 14.9%

You were right, if you look at the older notes it's even more obvious.

Take notes of 2008, 2009, 2010 and you will see the following results:

478 of 5493 8.7%

187 of 1728 =10.8%

Now unlike others I explained exactly what I did so that others can check it and I was hoping others would help me with this, but just to post numbers without any explanation doesn't really help.

If you look only at loans 3 years old there's not enough data to get a clear picture, also since the average default time is about after 1 year so it would be safe to use data up to 18 months ago.

If you take a look at the latest defaults and charge offs you will see that the recent months don't have any defaults yet. In months Jan-Mar there are 30+ defaults in each but in April there are only 17 and in May only 7 and 0 from June and on. So it's pointless to count in these months since the defaults didn't start yet. Actually when calculating defaults now we should probably consider only loans till end of March.

According to the data provided by LC, there is a clear relationship between amount requested and outstanding debt with the default rate.

Here are the results of defaults to loans out of the two categories credit card refinance and debt consolidation. Included are only loans till end of June 2012. Calculations are based on amount requested and not amount issued.

1 = Outstanding debt equal to amount requested
.5 = Requested double outstanding debt


1 or more
938 of 19750 4.7%

.6 and under
448 of 8249 = 5.4%

.5 and under
369 of 6226 5.9%

.4 and under
278 of 4458 = 6.2%

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