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Author Topic: E Loan, 1% expected default rate  (Read 3077 times)

stanny2

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E Loan, 1% expected default rate
« on: October 13, 2013, 09:17:55 AM »
Has anyone seen such a low default rate with an E or lower rated loan? Interesting, if one thought there was so low risk, shouldn't the rate be lower?

25% of it is still available...

https://www.lendingclub.com/browse/loanDetail.action?loan_id=7698713



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faeriering

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Re: E Loan, 1% expected default rate
« Reply #1 on: October 13, 2013, 09:35:59 AM »
I have never seen a E loan that low.  Do you have the Loan number?  I wonder if this is another example of LC's awesome math skills.
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Randawl

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Re: E Loan, 1% expected default rate
« Reply #2 on: October 13, 2013, 09:43:14 AM »
Loan #:  7698713

https://www.lendingclub.com/browse/loanDetail.action?loan_id=7698713&previous=browse

It's obviously a mistake for the expected default rate to be displayed that low.  I just wonder how it was caused, why this loan, and what other loans were effected.

Core, Dan, NJG, it's time for a Thinktank meeting.
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faeriering

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Re: E Loan, 1% expected default rate
« Reply #3 on: October 13, 2013, 09:51:24 AM »
IR is showing the following for expected default rate:
IR01 Expected Loss   7.31%   Lending Club Expected Default Rate   10.10%

Looks like LC is off by a factor of 10 :)
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core

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Re: E Loan, 1% expected default rate
« Reply #4 on: October 13, 2013, 10:16:27 AM »
Quote from: faeriering on October 13, 2013, 09:51:24 AM
Looks like LC is off by a factor of 10 :)

Good find.  Yes, in this case it would seem to be a simple programmer error.  It's rather easy to do.  In a line of code, the difference  between val*1000.00 and val*10000.00 can easily slip by even the most careful pair of eyes, especially when combined in a long calculation.  If this was the case though, I would expect it to be affecting all loans displayed in the same manner...?  I am unable to investigate since Stephanie won't let me browse new notes due to my state.

"Awesome math skills" is right, faeriering.  I think out in California they're still teaching New Math.
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GS

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Re: E Loan, 1% expected default rate
« Reply #5 on: October 13, 2013, 01:08:19 PM »
Quote from: stanny2 on October 13, 2013, 09:17:55 AM
Has anyone seen such a low default rate with an E or lower rated loan? Interesting, if one thought there was so low risk, shouldn't the rate be lower?

25% of it is still available...

https://www.lendingclub.com/browse/loanDetail.action?loan_id=7698713

I saw the exact same thing on an E a couple weeks ago, and assumed it was a mistake/glitch.
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Lloigor

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Re: E Loan, 1% expected default rate
« Reply #6 on: October 14, 2013, 05:10:41 PM »
I just got one too, where do they come up with this?

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ggnoob1337

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Re: E Loan, 1% expected default rate
« Reply #7 on: October 15, 2013, 01:49:50 PM »
I've seen that a few times...just shrugged it off as a glitch in the system.
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