Author Topic: Best Lending Club Analysis Site?  (Read 13582 times)

Pebbles

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Best Lending Club Analysis Site?
« on: January 14, 2013, 01:06:07 AM »
I rely heavily on the analysis sites.  I recently had 3 notes go to grace period and all three notes were referred by the same analysis site.  Which LC analysis site have you had the most success with?

william

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Re: Best Lending Club Analysis Site?
« Reply #1 on: January 14, 2013, 04:37:48 AM »
Your always going to have some notes go in to grace period, then late, then default (unless you sell them) that is why there is a default/loss rate. There is no way that you will not have any notes enter grace period if your notes are seasoned and you have enough notes. IMO all of the analysis sites are very similar, so instead of jumping from site to site you should try changing your strategy.

Keltset

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Re: Best Lending Club Analysis Site?
« Reply #2 on: January 14, 2013, 10:30:00 AM »
I rely heavily on the analysis sites.  I recently had 3 notes go to grace period and all three notes were referred by the same analysis site.  Which LC analysis site have you had the most success with?

3 notes probably in grace period isn't really a big deal, but a note that has gone into grace is more likely to default than one that never does and should be considered in your default rate. I almost always have about three different notes at any one time in grace period. I don't think this is uncommon considering the amount of notes a good portfolio should have as a minimum to diversify risk.

I also agree that just about all of them were the same. My personal favorite was IR however since they announced a yearly charge I ceased to use their service. I did enjoy NSR before I went to IR and found NSR to be a fantastic site. I haven't really used any of the others and do all my own analysis now instead of relying on other peoples formulas...

Peter

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Re: Best Lending Club Analysis Site?
« Reply #3 on: January 14, 2013, 10:20:57 PM »
I would like to echo the remarks of others. The fact you had 3 loans go into grace period has little to do with the stats site that referred the loan. I have 4,000+ notes these days and I have loans going into grace period pretty much every day. I consider it part of p2p lending and while you want to minimize this happening if possible, I wouldn't spend too much time worrying about it.

For the record, the stats sites we have today are fantastic. It is really only the last few months when we have had a lot of innovation and more choice.
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rawraw

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Re: Best Lending Club Analysis Site?
« Reply #4 on: January 15, 2013, 06:29:07 AM »
I would like to echo the remarks of others. The fact you had 3 loans go into grace period has little to do with the stats site that referred the loan. I have 4,000+ notes these days and I have loans going into grace period pretty much every day. I consider it part of p2p lending and while you want to minimize this happening if possible, I wouldn't spend too much time worrying about it.

For the record, the stats sites we have today are fantastic. It is really only the last few months when we have had a lot of innovation and more choice.
Has BryceMason released his yet?

Peter

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Re: Best Lending Club Analysis Site?
« Reply #5 on: January 15, 2013, 06:36:53 PM »
Has BryceMason released his yet?

No. Bryce is still working on it but I get the feeling it is not long to go now.
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OrthoInvest

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Re: Best Lending Club Analysis Site?
« Reply #6 on: January 16, 2013, 06:28:01 PM »
The ones I know of are Bryces and Interest Radar.

The problem is I am so new in all this too - So I don't know how those perform in the long run.

Does anyone have longer experiences with them?


Zach

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Re: Best Lending Club Analysis Site?
« Reply #7 on: January 16, 2013, 07:18:02 PM »
The ones I know of are Bryces and Interest Radar.

The problem is I am so new in all this too - So I don't know how those perform in the long run.

Does anyone have longer experiences with them?

Both services are relatively new, so there aren't any real indication signs from older users. With Interest Radar, you can see the historical performance of all loans issued with the IR 01 and 04 scoring:

http://www.interestradar.com/scores
http://www.interestradar.com/ir04

The performance has been very strong (relative to the entire set of loans issued).

The other services would be Lendstats.com, p2panalytics.com, and nickelsteamroller.com

brycemason

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Re: Best Lending Club Analysis Site?
« Reply #8 on: February 19, 2013, 08:28:12 PM »
My site is up and in beta, and you're welcome to join it if you like. Just send me a PM or email at brycemason at p2p-picks.com. The Profit Maximizer and Loss Minimizer products have historical performance measures (perhaps non-standard, but comparatively valid nonetheless) up you can read. It's a back-testing method but I find it about as fair as one can be without actually testing the strategy for 36 months (I'm on month 13 now with real money).

Overview of Method: https://www.p2p-picks.com/performance
Profit Max: https://www.p2p-picks.com/performance/profit-maximizer
Loss Min: https://www.p2p-picks.com/performance/loss-minimizer

Many fine folks are providing analysis and recommendations now. The diversity is great and not all people value the same features.

It's important to note that I'm not really trying to target the "help me do analysis" user. I'm more interested in the user who want to participate easily in a reasonable strategy to achieve a little alpha over the obvious competing strategies. So, there aren't any tools on my site to do analysis. That's my job!
« Last Edit: February 19, 2013, 09:26:54 PM by brycemason »

AnilG

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Re: Best Lending Club Analysis Site?
« Reply #9 on: February 19, 2013, 11:42:55 PM »

With Interest Radar, you can see the historical performance of all loans issued with the IR 01 and 04 scoring:


Be careful of "circular logic". Creating a "quality" index using analysis of historical data and then claiming how good the index is by showing how well the index fits to the historical data. It is a common circular fallacy of amateur statisticians.

Personally (may be biased view), I like Bad Loan Experience Risk Index that I use at PeerCube and on my blog. It is an index based on published research and variations are used in consumer lending for over 75 years. It also fits well with Lending Club historical data.
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Zach

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Re: Best Lending Club Analysis Site?
« Reply #10 on: February 20, 2013, 01:27:49 AM »

With Interest Radar, you can see the historical performance of all loans issued with the IR 01 and 04 scoring:


Be careful of "circular logic". Creating a "quality" index using analysis of historical data and then claiming how good the index is by showing how well the index fits to the historical data. It is a common circular fallacy of amateur statisticians.

Personally (may be biased view), I like Bad Loan Experience Risk Index that I use at PeerCube and on my blog. It is an index based on published research and variations are used in consumer lending for over 75 years. It also fits well with Lending Club historical data.

The problem with the BLE (for me) is the inability to see how it performs...That's a very important characteristic of a loan analysis site.

Interest Radar shows the performance of both the IR01 and IR04 scores on these pages:
http://www.interestradar.com/ir04
http://www.interestradar.com/scores

There seems to be clear evidence of historical out-performance of the higher rated notes.

Why do you not believe that utilizing historical performance against the index/rating system is effective to predict future performance?

LC is a different unsecured loan than almost any other product offered by banks/lenders (different payment and collection procedures, issuance policies, and credit criteria)

Zach

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Re: Best Lending Club Analysis Site?
« Reply #11 on: February 20, 2013, 01:30:27 AM »
Also, why don't you post the expected performance of your BLE ranking system based on both performance of similar consumer lending, AND Lending Club loan stats?

Even if your assumptions are correct, how can a user trust the BLE without seeing how the service out/under performs?

I appreciate hearing your opinion on this, BTW.

rawraw

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Re: Best Lending Club Analysis Site?
« Reply #12 on: February 20, 2013, 02:02:12 AM »

LC is a different unsecured loan than almost any other product offered by banks/lenders (different payment and collection procedures, issuance policies, and credit criteria)
How so?  Looks pretty standard to me.

Quote
Why do you not believe that utilizing historical performance against the index/rating system is effective to predict future performance?
Check other fields of finance and see how accurate 3 year time frames are.  Also, LC just dramatically increased the number of loans that get through (20% vs 10%), so the population is not nearly the same as the previous historical one you are drawing comparisons from.

The circular logic he refers to is data mining.  I could make and sell you a strategy that performed absolutely the best over the past.  And I'd bet you money if you followed that filter strategy, it's performance wouldn't be the same for the next 3 years.

Zach

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Re: Best Lending Club Analysis Site?
« Reply #13 on: February 20, 2013, 02:26:35 AM »

LC is a different unsecured loan than almost any other product offered by banks/lenders (different payment and collection procedures, issuance policies, and credit criteria)
How so?  Looks pretty standard to me.

You can't compare the procedures used to collect on a late/defaulted loan. Every lender will have different credit criteria...I haven't come across another lender with the same requirements exactly. You don't know how LC makes determinations to pull certain listings that may meet inital credit criteria. Also, other lenders may factor in differents credit attributes that LC does not.

Unless you're comparing the exact same variables with the same operational procedures, industry data doesn't seem too relevant - but could be a point of comparison.

Again, its too hard to guess without seeing the performance of the PeerCube system applied to LC loans.

If you're comparing credit criteria that has always been available to lenders in the data download, you should see similar performance.

Rev, any comment on this?

AnilG

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Re: Best Lending Club Analysis Site?
« Reply #14 on: February 20, 2013, 03:23:14 AM »
Zpbsfg,

Rawraw hit the nail with his comment about circular logic. If you do an analysis of a certain set of data and come to find a correlation, that correlation will always the best fit for the same set of data. But it doesn't prove validity of correlation until the correlation successfully predicts outcome for new/different set of data.

As for BLE, I shared the original research paper of 1928 and showed BLE calculation for several loan attributes using lending club historical data on my blog last year. Later on i found out that similar BLE variations are underpinnings of loan underwriting models for consumer loans. My own BLE finding was that Lending Club did a great job assigning credit grade A through D for their loans.

The composite BLE Index that I use on PeerCube is straight derivation of original research. Actually, writing a detailed description of BLE for PeerCube is on my list of things to do. I am also working on calculating composite BLE for historical loans. Unfortunately, it is arduous task as BLE includes most, if not all, loan attributes and a multidimensional array manipulation. And every month of new historical data requires new calculations for base numbers to use for new loans.

Only time will tell how good BLE predicts the risk of new loans.

BTW, there is nothing different about lending club loans, except the term p2p, than your conventional amortized loans such as mortgage and auto loans or any other equal repayment loans. The basic models stay the same.

Btw, I am currently working on background research for returns of lending club loans as there seems to be lot of misinformation out there. It has been another of my pet peeves that seems to be becoming generally accepted way of figuring returns.
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Anil Gupta
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