Author Topic: What loan purpose to avoid?  (Read 9942 times)

newstreet

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Re: What loan purpose to avoid?
« Reply #15 on: February 12, 2017, 03:37:16 PM »
So you all realize that people can check any box they want don't you??? The purpose is not verified. This is a silly discussion.

Irrelevant.  Historical data shows that when we divide loans by which box was checked, we see different performance in the different groups.  This means the variable has value.  Yes, we realize it isn't verified.  In spite of this, it has value.

Yikes!  Garbage in-garbage out. I continue to be incredulous at these comments.

Joleran

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Re: What loan purpose to avoid?
« Reply #16 on: February 20, 2017, 03:40:51 PM »
Yikes!  Garbage in-garbage out. I continue to be incredulous at these comments.

So, is your argument that some statistically significant percentage of people lie for some reason (e.g. perception of better rates offered, embarrassment, laziness, etc.), and any categorical differences observed are due to random chance?  Personally, I think most people will be relatively honest, and mistakes in loan categorization will be far more honest errors than malicious intent.

Fred93

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Re: What loan purpose to avoid?
« Reply #17 on: February 20, 2017, 11:56:18 PM »
So you all realize that people can check any box they want don't you??? The purpose is not verified. This is a silly discussion.
Irrelevant.  Historical data shows that when we divide loans by which box was checked, we see different performance in the different groups.  This means the variable has value.  Yes, we realize it isn't verified.  In spite of this, it has value.
Yikes!  Garbage in-garbage out. I continue to be incredulous at these comments.

At this point we have to make a distinction between philosophy and science.  The philosopher sits in a dark room and has grand thoughts about how he thinks the world might be.  He may decided that the world is flat, or perhaps that the loan purpose field has no value.  His logic is reasonable, but he makes false presumptions because he fails to begin with observation of the physical world.  The scientist, on the other hand, begins with observations, then learns from those observations.  He looks at the data, and tries to make use of it to help him understand the world.  He decides that the world is round, and the loan purpose field has value.

Many of us who have actually looked at the LC data have decided that some of the unverified fields have value.  You of course have the right to be incredulous and ignore the science if you like.

I don't know exactly why your logic is wrong, but the data tells me it is wrong. 

You don't need to do a lot of work to reach this conclusion.  You can get the statistics on performance of loans with various values in the purpose field with a few clicks on the nsrplatform.com web site.  I recommend that you include the filters that you normally use when investing, so you're confident that the data applies to the subset of loans you're investing in, and I suggest you check to see that the resulting categories contain adequate numbers of loans to avoid random fluctuations, and that you look for a relationship that persists over different time frames, perhaps over several years.  If all these things are true, then the data is likely telling you something.

Data Junkie

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Re: What loan purpose to avoid?
« Reply #18 on: February 23, 2017, 10:16:16 AM »
I skip renters taking out home improvement loans.  Don't understand it, therefore I am not going to participate.  But if anyone has a logical explanation for it, I am interested to hear.

rubicon

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Re: What loan purpose to avoid?
« Reply #19 on: February 23, 2017, 11:48:41 AM »
I skip renters taking out home improvement loans.  Don't understand it, therefore I am not going to participate.  But if anyone has a logical explanation for it, I am interested to hear.

my sister rented a place for a few months when she rebuilt her home

Data Junkie

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Re: What loan purpose to avoid?
« Reply #20 on: February 23, 2017, 02:13:44 PM »
I skip renters taking out home improvement loans.  Don't understand it, therefore I am not going to participate.  But if anyone has a logical explanation for it, I am interested to hear.

my sister rented a place for a few months when she rebuilt her home

The phrase "her home" suggests your sister owns the home, in which case on a loan application would she choose "renter"?

Edward Reid

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Re: What loan purpose to avoid?
« Reply #21 on: March 01, 2017, 02:45:19 PM »
I only do debt consolidation and CC refinancing. I don't have numbers, it's just that I feel I understand why people do these. Since I put my current criteria into place about 18 months ago, only one note I've taken, out of about 250, has gone south. (This restriction was not my only change.)

Well, I do have one number: as I type, 79% of the notes offered are in these categories. In grade C, where I invest, it's 85%. If I went studying the other categories, it would be a waste of my time. (I'm not saying it would be a waste of everyone's time, just of mine.)

The OP's followup mentioned "additional risk over index funds to make a 5% return". I assume they meant a stock index fund. I did look at the numbers on this before I started, and concluded that investing in Grade C or better is much less risky than a stock index fund, and was very likely to yield better than 5%. While it's possible to lose money on LC, with a properly diversified portfolio selected to avoid loss it's very rare. Even in 2008-2009, the highest grade to go underwater was D. Far rarer than losing money in a stock index fund.

That's why I'm here: better returns than bonds or CDs, and safer than anything involving stocks. A LC portfolio has economy risk: when the entire economy goes south, more loans default. But a stock index fund has market risk: the market can go down for many reasons even when the economy is good.

Edward


KidorioL

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Re: What loan purpose to avoid?
« Reply #22 on: February 10, 2020, 10:49:38 AM »
Hey, so what do you think about having a high salary job, but not to taking a loan? Since it is pretty unusual thing, for me (because a take a lot of loans in the past) I think that there is a thing that can improve my budget and it's a job because when I asked too many loans, guys from "Debt Collection Agency" has comed to me and asked for a money, and on that time I didn't had it. Since then my thoughts is only about the job or creating a small business with a good team.
« Last Edit: February 13, 2020, 04:05:43 AM by KidorioL »

nonattender

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Re: What loan purpose to avoid?
« Reply #23 on: February 11, 2020, 04:21:25 AM »
So you all realize that people can check any box they want don't you??? The purpose is not verified. This is a silly discussion.
Irrelevant.  Historical data shows that when we divide loans by which box was checked, we see different performance in the different groups.  This means the variable has value.  Yes, we realize it isn't verified.  In spite of this, it has value.
Yikes!  Garbage in-garbage out. I continue to be incredulous at these comments.

At this point we have to make a distinction between philosophy and science.  The philosopher sits in a dark room and has grand thoughts about how he thinks the world might be.

The philosopher is the guy who thinks "Fred's happy making underwriting decisions based purely upon statistics.  Make sure Fred - or people who think like Fred - are never able to implement such a one-size-fits-all statistical control method to qualitative humanitarian enterprises."

You ever see Errol Morris' documentary about Bob McNamara?  All kinds of data, but not much in the analysis/insight department - a ton of collateral damage.

Same shit playing out in a variety of disciplines/fields, right now...  Technology - actually, more of a false Scientism - is on the loose.

I say "false Scientism" because I think that a lot of what you imagine as philosophy is actually "sociology dressed up in Science talk."

You might enjoy the preface to Kant's Critique of Pure Reason where he talks about how function Reason(Reason) is a bit 'recursive.'

Anyway... I know this is like 3 years old... I do wish I'd seen it back then...  Sad that philosophy/science won't unite against bullshit!

:)
-t
A little nonsense now and then is relished by the wisest men.

Facelesslk

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Re: What loan purpose to avoid?
« Reply #24 on: February 18, 2020, 05:10:46 AM »
This is about me. I'm one of those who takes a vacation loan. Because I can't afford the vacation in one fell swoop that my wife and kids want. So I have to take out a loan to please my family. But I am a good taxpayer and pay all loans on time. I just don't have a huge salary to meet the needs of my family, so I prefer to pay in parts. Thanks to this opportunity, I was able to book a wonderful vacation for my family here (westgateresorts.com), and I am very proud of it. I am sure that we are waiting for interesting adventures, and our children will visit Disney World, which they have long dreamed of. To be honest, it was a childhood dream for both me and my wife. And so, we can't wait for our vacation to start.
« Last Edit: Today at 09:54:00 AM by Facelesslk »