Author Topic: Ridiculous number of defaults, anyone else?  (Read 1086 times)

DSGDSG

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Ridiculous number of defaults, anyone else?
« on: February 02, 2018, 04:59:21 PM »
Hello everyone.  I had been contributing to lending club for some time and turned on the automatic investing.  Out of 75 loans right at this moment I have:
2 in grace period
2 16-30 days late
3 31-120 days late
3 charged off

This has knocked my return down to just over 2%.  The stock market has been booming meanwhile I'm getting porked on money I've invested here.  I feel like something has changed with the way they issue loans out?  Have the standards become lax?  How can I have such a high rate of default when I'm not invested on the conservative side??  I have just now turned off automatic investing and I'm going to start taking my money back out.  This is just unacceptable.

Fred93

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Re: Ridiculous number of defaults, anyone else?
« Reply #1 on: February 02, 2018, 05:13:52 PM »
What grades did you invest in?

What is the average age of your portfolio?

DSGDSG

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Re: Ridiculous number of defaults, anyone else?
« Reply #2 on: February 02, 2018, 05:54:00 PM »
What grades did you invest in?

What is the average age of your portfolio?

A,B, and C.  I don't see anywhere that tells me what the average age of my portfolio is but if memory serves me correctly I began with lending club in the summer of 2016.  I have yet to have any note get paid off due to reaching the life of the loan.

Wenessanut

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Re: Ridiculous number of defaults, anyone else?
« Reply #3 on: February 13, 2018, 03:42:57 AM »
I want to know who is who. Is it a faulty number?

au88

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Re: Ridiculous number of defaults, anyone else?
« Reply #4 on: February 13, 2018, 10:02:18 PM »
See the post "worst month yet".

lendingprosper23

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Re: Ridiculous number of defaults, anyone else?
« Reply #5 on: February 15, 2018, 09:56:31 PM »
I experienced the same thing.

I also have been selling my notes for over 1 year, a huge amount never late, and even at 3-6% discounts they dont sell.

Private lending is dead via these sites. The returns make it pointless to invest. The volatility is not for everyone, but I moved as much as possible last august into crypto and have made quite literally 50x the profit I did from p2p lending that I did for 3 years.

p2p lending, such as ethlend, makes beautiful sense on a decentralized platform where individual lenders set terms and collateral is put up. I beg anyone still into private lending give crypto a real look because lending club and propser are a joke.

Fred93

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Re: Ridiculous number of defaults, anyone else?
« Reply #6 on: February 15, 2018, 10:33:02 PM »
What grades did you invest in?

What is the average age of your portfolio?

A,B, and C.  I don't see anywhere that tells me what the average age of my portfolio

On the main summary page, just to the left of your ANAR number, make sure you've selected "primary notes".  Now click on the words "understanding your returns".  This will take you to a page with a chart showing everyone's returns, broken out by portfolio age.  Your account will be shown as a large dot.  You can see how you stack up vs other folks with similar age portfolios.  To the left of the chart it shows you the average age of the loans in your portfolio. 

If you had all 3-year loans, and they all ran for the entire 3 years, and you had this portfolio long enough so that you have a mix of loans of different ages, they would average out to 18 months.  Most porfolios are mix of 3 and 5 year loans, and lots of loans pay off early, so 15-20 months is the typical age of loans in a mature portfolio.

Portfoios with small # of loans experience significantly varied returns just because of the luck of the draw.  Its like flipping pennies.  Even tho you know the probability of heads should be 50%, you can flip 10 times and get only 3 heads, and that isn't strange.  Its just what happens with a small number of flips.

In statistical lingo, the performance of your portfolio is a SAMPLE of the performance of the strategy you are following.  With such a small portfolio (75 loans) you may well be following a strategy that will produce 4.5% returns, but your sample right now is returning 2%.

kcook73

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Re: Ridiculous number of defaults, anyone else?
« Reply #7 on: June 16, 2018, 12:46:05 PM »
I am amazed to see people with $150k + salary that own their house and always had high credit rating default on their loan -- how does that happen, unless they know the ins and outs of the lending system and are running a scam against LC (knowing the loans are backed by 3rd party individuals versus the company itself)?

Data Junkie

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Re: Ridiculous number of defaults, anyone else?
« Reply #8 on: June 16, 2018, 05:45:30 PM »
I made the mistake of starting off with automated investing, and my returns have been decimated by the defaults.  I've learned a lot since then, most of it from this forum.  Why I haven't bailed on LC is that the majority loans do get paid in full (well, so far, anyway).  So I have challenged myself to find a fairly reliable way to avoid loans that default.  Betting on my own investment strategy keeps it interesting.