Author Topic: folio ytm  (Read 9101 times)

RaymondG

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Re: folio ytm
« Reply #30 on: March 04, 2016, 05:07:48 PM »
Any thoughts on maturity while we are at it?  would a 36 mo loan with 24 months left be more desirable than a a new 36 mo loan at an equal ytm assuming no credit status degradation in the interim on the older note?

How about a 60 mo loan with 36 months left vs.a new 36 mo loan with all other credit history/info at ytms assumed to be equal.
definitely 36 mo loan with 24 months left; and 60 mo loan with 36 months left, if the past payment history and credit history are good.

mfriedma

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Re: folio ytm
« Reply #31 on: September 05, 2018, 01:30:06 AM »
I think you all might be interested in the response I got from LendingClub when I e-mailed asking about the YTM calculation:

Additionally, I am unfamiliar XIRR and it is not what we utilize to calculate YTMs. Please note, we do not provide statistical support and I am unable to calculate the Yield to Maturity manually on your behalf.

To my knowledge you would not be able to use XIRR to arrive at our figures. Investors in the past that have successfully calculated our YTM have used Euler's method to compute the answer.


FACEPALM!
In case anyone is curious, Euler's Method is used to approximate differential equations.

Rob L

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Re: folio ytm
« Reply #32 on: September 05, 2018, 10:08:12 AM »
I think you all might be interested in the response I got from LendingClub when I e-mailed asking about the YTM calculation:

Additionally, I am unfamiliar XIRR and it is not what we utilize to calculate YTMs. Please note, we do not provide statistical support and I am unable to calculate the Yield to Maturity manually on your behalf.

To my knowledge you would not be able to use XIRR to arrive at our figures. Investors in the past that have successfully calculated our YTM have used Euler's method to compute the answer.


In case anyone is curious, Euler's Method is used to approximate differential equations.

Thanks for the info. I'm pretty sure no one on this forum ever claimed to successfully compute the same Folio YTM as LC. There were plenty that tried. In 2016 I wrote some code that sold notes on Folio and I used the secant method to compute YTM. IIRC the result didn't match LC's but was reasonably close. I thought it produced the correct YTM and converged very quickly so I used it. See below for a very good description of the computation:

https://en.wikipedia.org/wiki/Internal_rate_of_return