Author Topic: Worst Month Yet  (Read 262560 times)

SMWinnie

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Re: Worst Month Yet
« Reply #300 on: December 06, 2016, 10:54:54 AM »
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP

So, payment on 7 of the 140 notes which have come up on their first payment date failed.
Updating:

168  issued notes
  3  notes paid in full in first month, principal recycled into new notes included in 168 above
165  issued notes, net of bridge loans
 13  notes have not reached 1st payment (or are processing/current)
152  notes that reached 1st payment
  8  notes IGP
  3  notes (of 8 that ever went IGP) now Late 16-30
  3  notes (of 8 that ever went IGP) now Current
  2  notes (of 8 that ever went IGP) still IGP

Booleans

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Re: Worst Month Yet
« Reply #301 on: December 06, 2016, 03:04:20 PM »
I had liquidated my taxable account in anticipation of rolling over a Roth IRA to Lending Club for 2017. This thread is one of the reasons I'm hesitating now.

lascott

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Re: Worst Month Yet
« Reply #302 on: December 07, 2016, 11:13:05 AM »
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account
Well I was looking at PeerCube for my accounts and it's chart shows it is more than my conservative notes.


** The portfolio fully paid rate is the count of notes fully paid as percentage of portfolio notes lent through primary platform.
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

SeanMCA

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Re: Worst Month Yet
« Reply #303 on: December 07, 2016, 11:36:54 AM »
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account

Well I was looking at PeerCube for my accounts and it's chart shows it is more than my conservative notes.


** The portfolio fully paid rate is the count of notes fully paid as percentage of portfolio notes lent through primary platform.

Those Ds have to be getting refinanced either through LC or a competitor. 
I'm a merchant cash advance veteran exploring the p2p lending waters.

.Ryan.

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Re: Worst Month Yet
« Reply #304 on: December 07, 2016, 01:16:54 PM »

Those Ds have to be getting refinanced either through LC or a competitor.

This is the reason I found LC's response to combating the effects of rising delinquencies was in part to raise rates. Raising rates will only increase defaults and promote early refinancing vs. actually increasing the overall return to investors IMO.

Rob L

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Re: Worst Month Yet
« Reply #305 on: December 07, 2016, 02:53:29 PM »
Those Ds have to be getting refinanced either through LC or a competitor.

Just so happens that I received a pre-approved offer from Discover in the mail today.
In the letter they tout same day approval, loan terms of 3, 4, 5, 6 or 7 years, up to $35k and no origination or closing fees.
There's a "Compare the Benefits" table including LC, Prosper, Citibank Personal Loan and PNC bank. No Marcus.
Top line of the table; zero origination or closing fees for all but LC and Prosper (which they estimate to be about $675 for both).
Anyone with a loan at a Discover competitor like LC would likely pick up the phone and call Discover. It's free and easy. No downside.

Us having a lot of pre-paid loans might not be such a terrible thing. If no borrowers are pre-paying that might indicate LC is underpricing our loans.
That would be much worse.

SLCPaladin

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Re: Worst Month Yet
« Reply #306 on: December 07, 2016, 04:13:03 PM »

Those Ds have to be getting refinanced either through LC or a competitor.

This is the reason I found LC's response to combating the effects of rising delinquencies was in part to raise rates. Raising rates will only increase defaults and promote early refinancing vs. actually increasing the overall return to investors IMO.

I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.

nonattender

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Re: Worst Month Yet
« Reply #307 on: December 08, 2016, 08:40:59 PM »
Those Ds have to be getting refinanced either through LC or a competitor.

Just so happens that I received a pre-approved offer from Discover in the mail today.
In the letter they tout same day approval, loan terms of 3, 4, 5, 6 or 7 years, up to $35k and no origination or closing fees.
There's a "Compare the Benefits" table including LC, Prosper, Citibank Personal Loan and PNC bank. No Marcus.
Top line of the table; zero origination or closing fees for all but LC and Prosper (which they estimate to be about $675 for both).
Anyone with a loan at a Discover competitor like LC would likely pick up the phone and call Discover. It's free and easy. No downside.

Got one of those about six months ago and posted it here, before I started running a little experiment with my own FICO - for other reasons - which sits at well >800 with ~0% util (I've been doing PIF, even before they report balances, each month - though a couple hundred bucks here or there will show up on a card or two, last day or so of the month, and get reported)...  I decided to look like a good, Christmas-shopping consumer this month (instead of a deadbeat/tightwad) and loaded up a 0% card with a ton of stuff which I'm going to let get reported, before PIF in January (maybe, depending on if any interesting rate arb opportunities arise, w/fed move).

I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)
A little nonsense now and then is relished by the wisest men.

.Ryan.

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Re: Worst Month Yet
« Reply #308 on: December 08, 2016, 08:50:41 PM »


I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.

Makes total sense. Hope you're right SLC!!!

Lovinglifestyle

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Re: Worst Month Yet
« Reply #309 on: December 08, 2016, 11:09:16 PM »


I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.

Makes total sense. Hope you're right SLC!!!

I'd especially like the E1 rates to go higher.  Anecdotally, I don't feel the risk of E1 is being adequately compensated compared to E2.  My Nov. acc't value ended up only plus $12.18, net of fees, due to selling lates at low prices.  Maybe I'll quit doing that.

Booleans

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Re: Worst Month Yet
« Reply #310 on: December 09, 2016, 07:59:08 AM »
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

fliphusker

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Re: Worst Month Yet
« Reply #311 on: December 09, 2016, 10:26:53 AM »
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

Shawnthgreta

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Re: Worst Month Yet
« Reply #312 on: December 09, 2016, 11:33:20 AM »
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

It does lower FICO. I would imagine not materially through the very low utilization area (say less than 10%).

Booleans

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Re: Worst Month Yet
« Reply #313 on: December 09, 2016, 12:06:45 PM »
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

Your FICO score drops as your utilization gets beyond certain ranges. For example, there's no difference between 0% utilization and 5% utilization. But then once you get to 10% it might drop a little, then 30%, etc...


nonattender

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Re: Worst Month Yet
« Reply #314 on: December 09, 2016, 12:12:12 PM »
5 digits of cc bal in jan combined with score around 795 (after util goes up, score will go down) will = sweet spot for debtcon junkmail.

i was holding everything fairly steady, for a while, at ~0% util, experimenting with combining multiple cards from a single issuer into a single line - ie, going from 2 x $1k amex to 1 x $2k amex kind of thing - as well as seeing what i could learn re: effects of average age.

won't share my findings there, but will say that the old authorized user trick still seems to work - took friend from ~650 to ~770 w/an authorized user tradeline from one of my cards (had no negative effect on me, but fico 08 jumped friend's score as soon as reported).

algorithms are fun.  i get bored easily.  i want to know how stuff works.  etc.
« Last Edit: December 09, 2016, 12:28:44 PM by nonattender »
A little nonsense now and then is relished by the wisest men.