Author Topic: Rejected Loans on LendingClub – The Post-IPO Edition  (Read 5534 times)

lascott

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Rejected Loans on LendingClub – The Post-IPO Edition
« on: May 13, 2015, 03:24:47 PM »
Rejected Loans on LendingClub – The Post-IPO Edition -- May 04, 2015
http://www.orchardplatform.com/blog/rejected-loans-on-lendingclub-the-post-ipo-edition/

Great to see their analysis.

Quote
In November 2013, we analyzed the dataset of LendingClub’s rejected loan applications. At that time, we found that approximately 90% of applicants were not approved for a loan. Over the past year and a half, much has changed. LendingClub originated over 2 times the volume in Q4 2014 as it did in Q3 2013, and the entire marketplace lending ecosystem has garnered significant attention. While we generally spend most of our time focusing on the volume, composition, and performance of loans that were successfully originated, it is interesting to also explore those borrowers who did not qualify for a loan, particularly as a measure of general consumer awareness of LendingClub as a financing option. Today, we will revisit this now larger dataset and explore any changes in the population of declines. <snip>

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yojoakak

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #1 on: May 13, 2015, 04:04:19 PM »
LendingClub rejects anyone with a FICO score below 660.

Why do people with such low scores even bother applying?

And more importantly, why muddy up these charts with those applications?

Fred93

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #2 on: May 13, 2015, 04:48:33 PM »
The analysis described in orchard blogs is never deep.  Its just "Look... we like... know stuff."

More interesting would have been to look at all the other available variables, to see if criteria vs them had changed.

AnilG

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #3 on: May 13, 2015, 06:17:51 PM »
While I really like what Orchard is doing business model wise, their analysis and reporting leaves a lot to be desired. The data and charts shared in this article doesn't show anything related to their claims. They should consider hiring better people to do data analysis and publish findings. This article most probably was just a quick "marketing" response to institutional concerns about borrower quality post IPO.
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Joleran

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #4 on: May 13, 2015, 08:48:45 PM »
LendingClub rejects anyone with a FICO score below 660.

Why do people with such low scores even bother applying?

It's almost like people with low credit scores don't know how to knowledgeably manage their credit!

lascott

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #5 on: May 13, 2015, 10:48:34 PM »
So others have reviewed declined applications? Where is that data even located?

Indeed that graph is hard to see details on but I think they just wanted you to see the pattern of it being the same. Look left, look right.  Overlays would have been better to see the data relative to each group. 

Regarding less than 660 FICOs there was just news today about a middle man company having an exchange of this data. Declined by LC then LC can provide this data to the middle man and the loan can go to another company. I assumed LC gets something for doing that. That is perhaps someone thought they had a good enough FICO (or didn't even know their FICO or follow it regularly) and applied. Perhaps they are at 650 or 640 or whatever. Food for thought.
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Fred

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #6 on: May 13, 2015, 11:08:21 PM »
So others have reviewed declined applications? Where is that data even located?

LC posts their "DECLINED LOAN DATA" here https://www.lendingclub.com/info/download-data.action

lascott

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #7 on: May 14, 2015, 12:11:34 AM »
So others have reviewed declined applications? Where is that data even located?

LC posts their "DECLINED LOAN DATA" here https://www.lendingclub.com/info/download-data.action
Thanks. Sorry I missed that. Didn't recall people reporting or writing articles on it but I likely just forgot.


http://i.imgur.com/n2BeIo7.png
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Randawl

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Re: Rejected Loans on LendingClub – The Post-IPO Edition
« Reply #8 on: May 14, 2015, 01:48:09 AM »
I am left with similar feelings from reading certain posts of theirs over the years.  It's all a bit amateurish and as touched on is a bit of a marketing front.

While I really like what Orchard is doing business model wise, their analysis and reporting leaves a lot to be desired. The data and charts shared in this article doesn't show anything related to their claims. They should consider hiring better people to do data analysis and publish findings. This article most probably was just a quick "marketing" response to institutional concerns about borrower quality post IPO.
The analysis described in orchard blogs is never deep.  Its just "Look... we like... know stuff."

More interesting would have been to look at all the other available variables, to see if criteria vs them had changed.