Author Topic: Why does NSR ROI Differ so much from Lending Club Adjusted Net Annualized Return  (Read 7167 times)

lfiske

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When I look at all the completed loans for 2010 using the excellent NSR platform, the ROI for all unfiltered loans is 6.09%. When I look at the same at the Lending Club site, the "Adjusted Net Annualized Return" is 6.69%. Several other numbers match or are very close, including the total issued and average interest rate. Why the significant difference? I'm assuming it's in the ROI calculation, but if so, which is more accurate?

rocco.g

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I believe the discrepancy is servicing fees and that whatever page you are looking at on Lending Clubs website is showing raw performance of the loans, not what an investor received.

The NSR calculation includes a 1% servicing fee to show the return that a typical investor would actually see and this is probably why all of the NSR numbers are lower.

ThinleyWangchuk

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I believe the discrepancy is servicing fees and that whatever page you are looking at on Lending Clubs website is showing raw performance of the loans, not what an investor received.

The NSR calculation includes a 1% servicing fee to show the return that a typical investor would actually see and this is probably why all of the NSR numbers are lower.

Are you sure?

"NAR includes borrower payments received each month, net of service fees, actual charge offs, and recoveries." https://www.lendingclub.com/public/about-nar.action