LC RIP - Aug 2013

[berniemadeoff]

Given the paltry amount of loans I've been getting with Auto Invest (E-G, 400+), looks like we're now shut out of LC.  RIP

Time to go back to playing the stock market.   

[yojoakak]

Given the paltry amount of loans I've been getting with Auto Invest (E-G, 400+), looks like we're now shut out of LC.  RIP

Time to go back to playing the stock market.   

There's $11 trillion in outstanding Consumer Debt.

Why is it so hard for LendingClub to find people to loan money to?

[Dennis]

Personally I'm doing okay with Lending Club.  I found about 125 notes in July that met my criteria and so far in August I'm still finding them, although it hasn't been easy.  I do not use automated software, my notes are all hand picked.  That said, I have to be VERY fast at purchasing notes at their issue times throughout the day.  Most of the ones that fit my criteria go in seconds, minutes at most.

On the other hand, Prosper has become almost impossible to manage.  I'm barely keeping up with reinvestment and have no chance of adding new funds until Prosper finds a way to bring more borrowers to the platform.  It would seem that we've reached a point on both lending platforms where growth is being limited only by supply.  But if Prosper could find enough borrowers, I believe it would grow to profitability very quickly, of course Lending Club is already there.

Finding borrowers may be the biggest challenge to growth going forward with P2P.  We all know though that there are plenty of debtors out there, but the challenge will be bringing the qualified ones to these boards.  It should be interesting to see how well Lending Club and Prosper does at addressing this.

[rawraw]

Yea, it's either E-G loans or the stock market.  There isn't any other options out there    How is Puerto Rico bonds doing?

[JDowding]

I seem to be doing okay, still willing to take a mix that includes A-C loans.   

[Dennis]

Yea, it's either E-G loans or the stock market.  There isn't any other options out there    How is Puerto Rico bonds doing?

I'm not sure I understand your comment.  Are you suggesting you can't find enough A - D notes, or do you find A - D notes undesirable?  C and D notes have been the easiest for me to find, and with returns of 13.68% - 20.31% I find them very desirable, but you have to be fast at getting them.  E and F are the most difficult to find, but I am finding them and I have what I consider pretty conservative criteria.  The best notes (subjective) will go very very fast at any grade so you do have to work a little.

[SarahV]

E-G/400+ is an extremely restrictive filter... you're throwing out 98% of all loans before you even start. Of course you'll have trouble finding enough of them if things get a bit competitive. You think every other Interest Radar user isn't looking for those same exact loans? It's probably the first filter set everyone tries when aiming for high-interest loans on IR.

Try a custom filter giving you 395+ or 397+ for IR01. Try a custom filter including notes over 18% or 19% interest rate instead of E-G. You'll pick up extra loans that the lazier filterers won't get and they're going to give you a very similar return to your E-G 400+.

[berniemadeoff]

Yea, it's either E-G loans or the stock market.  There isn't any other options out there    How is Puerto Rico bonds doing?

PR bonds are doing great.  5% tax free baby and no defaults yet!

[berniemadeoff]

E-G/400+ is an extremely restrictive filter... you're throwing out 98% of all loans before you even start. Of course you'll have trouble finding enough of them if things get a bit competitive. You think every other Interest Radar user isn't looking for those same exact loans? It's probably the first filter set everyone tries when aiming for high-interest loans on IR.

Try a custom filter giving you 395+ or 397+ for IR01. Try a custom filter including notes over 18% or 19% interest rate instead of E-G. You'll pick up extra loans that the lazier filterers won't get and they're going to give you a very similar return to your E-G 400+.

I could relax the filter, but I see that every one is finding loan availability an issue that is getting worse by the day.  I expect my returns will gradually diminish over time and soon become unattractive vs. other asset classes.  I was afraid this would happen eventually but not this soon.

[SarahV]

It's your choice when to give up and what return is worth it to you, of course. For me it's a small part of my portfolio, I consider it an experiment, and it's not a huge deal if I make one percent more or less.

[berniemadeoff]

It's your choice when to give up and what return is worth it to you, of course. For me it's a small part of my portfolio, I consider it an experiment, and it's not a huge deal if I make one percent more or less.

Take the returns while you can get them..  they probably won't last.

[investforfreedom]

Personally I'm doing okay with Lending Club.  I found about 125 notes in July that met my criteria and so far in August I'm still finding them, although it hasn't been easy.  I do not use automated software, my notes are all hand picked.  That said, I have to be VERY fast at purchasing notes at their issue times throughout the day.  Most of the ones that fit my criteria go in seconds, minutes at most.

On the other hand, Prosper has become almost impossible to manage.  I'm barely keeping up with reinvestment and have no chance of adding new funds until Prosper finds a way to bring more borrowers to the platform.  It would seem that we've reached a point on both lending platforms where growth is being limited only by supply.  But if Prosper could find enough borrowers, I believe it would grow to profitability very quickly, of course Lending Club is already there.

Ditto.  I am still okay with LC, but Prosper is just impossible.  Not only are there few quality D and E loans, the good ones are gone in literally seconds.  Too much front-running by the institutions and big investors using auto-invest.

Finding borrowers may be the biggest challenge to growth going forward with P2P.  We all know though that there are plenty of debtors out there, but the challenge will be bringing the qualified ones to these boards.  It should be interesting to see how well Lending Club and Prosper does at addressing this.

My view is that there is just too much money going after too few borrowers.  Regardless of how many new borrowers come onto the platform, there is always ever more institutional "hot money" floating around to scour for yields and other asset classes.  (Corporations have been hoarding so much cash these days--for the past few years after the financial crash of 2008.) 

[Fred]

berniemadeoff, sad to see you leave!

On the other hand, I take a comfort on having 1 fewer competition.

[berniemadeoff]

berniemadeoff, sad to see you leave!

On the other hand, I take a comfort on having 1 fewer competition.

I'll keep adding new money and reinvesting until I can't get any more loans. It seems that day may be coming soon.

[rawraw]

Yea, it's either E-G loans or the stock market.  There isn't any other options out there    How is Puerto Rico bonds doing?

I'm not sure I understand your comment.  Are you suggesting you can't find enough A - D notes, or do you find A - D notes undesirable?  C and D notes have been the easiest for me to find, and with returns of 13.68% - 20.31% I find them very desirable, but you have to be fast at getting them.  E and F are the most difficult to find, but I am finding them and I have what I consider pretty conservative criteria.  The best notes (subjective) will go very very fast at any grade so you do have to work a little.

I was being slightly facetious.  LC isn't built around the E-G notes.  I use a barbell strategy of sorts and have a few to up the average return, but I'm having no problems finding notes (generally BCD).  I'm still earning my double digit return which is plenty for me -- but I've never been on the edge of credit quality like many here, so I'm not used to getting those DEG notes in the first place.