[jamaicabound]

Myself and my buisness partner both joined lending club a while back. I wound up going more conservative with nothing lower than c rated loans where my partner went with all d, e, or whatever the lowest ones are. He is somewhat picky he wont invest in a business startup focuses more on debt consolidation, home improvements, buying a new car, etc.

Anyhow, he's making like 15% while I'm making 7%. He's had 0 defaults. I've only had one but oddly enough my one default is on a B rating not one of the D's or F's I have as I do have a couple.

I think it's better to go with a more risky portfolio, sure you'll probably get a few more defaults but you're also making 2-3x what you would going more conservative. I'm switching my strategy to going with teh riskier but higher paying loans moving forward

[samsamsam]

Was flipping through Reddit reading more about this and came across a guy who speculated in debt that went bad. I probably wouldn't do it, but seems to scratch the gambler's itch.

Quote:

I've been having some fun goofing around with note speculation on Lending Club's trading platform.
Rather than pick notes that won't default, I sift through notes that are behind on payment and likely to go current again. As soon as they do, I sell them for a quick 15-18% profit. If they don't, I sell them at a 5-10% loss. (Remember they're already steeply discounted when I buy them.) I've only eaten one note so far.
That's with like two grand though; my returns are beer money. It's something to do when nothing is on TV. So in all seriousness, I don't think P2P lending orgs are a great place to park your investing money.

[DVY]

Spreads have really tightened across the board for LC and prosper.

I longer advocate putting any $$$ into it except as a corporate or US govt treasury bond substitute (B or higher)

I was getting upwards of 14-16% on B/C/D notes. Now its looking like its dropped 4-5% across the board for high-yields which makes it very unappealing risk-reward

[Brodiaga]

Bumping this thread, because I am considering investing in Lending Club to try it out.

The idea is to buy about 200 25-dollar notes and see how it goes.

I see some good ideas about strategies and selection criteria in this thread. If anyone else could share more on that would be great.

Specifically,
-Automatic selection vs manual vs a combination of both
-Specific investment criteria
-Picking the best notes - timing, strategies
-Any other web sites/3rd party resources

[portofmanteau]

(04-09-2016 03:14 PM)Brodiaga Wrote:  

Bumping this thread, because I am considering investing in Lending Club to try it out.

The idea is to buy about 200 25-dollar notes and see how it goes.

I see some good ideas about strategies and selection criteria in this thread. If anyone else could share more on that would be great.

Specifically,
-Automatic selection vs manual vs a combination of both
-Specific investment criteria
-Picking the best notes - timing, strategies
-Any other web sites/3rd party resources

I still have about the same amount in LC, have not continued investing. I currently have 632 notes. At this point I have it running on auto-invest, with slightly worse results than picking manually. I was aiming mostly for D,E,F,G loans but it's very difficult for the auto invester to find loans that meet my target filter, so I generally have about 3-5% of my portfolio sitting in cash.

I'm still using the same filter I outlined earlier in the thread. In the automated investment section, under "special instructions" you can set the filter you want to use.

LC's auto invester tool states an effective interest rate of 17% for my filter + allocation, with an 8% charge-off rate and 1% in fees, leaving a projected return of 8%. In my case, this has been very accurate. I've been invested 4 years and my net annualized return is 8.74%, with an adjusted NAR (projecting likely defaults) of 7.8%. This is about 1% worse than where I was last year, and since I've been using almost exclusively auto-investing.

[Brodiaga]

^
Thanks, portofmanteau. The filters you use make sense. I copied and pasted them below.

Quote:

No delinquencies in the past 2 years
Max loan amount: $25k
Max DTI: 20%
Home ownership: Mortgage/own
36 month loans only
Minimum length of employment: 4 years
Location: All except California
Loan purchase: Refinance, Consolidate, Wedding, Car, Major Purchase
Earliest Credit Line: 10 years or more

I have signed up, will start investing in a few days. I tried the filters and came up with a very restrictive combination, but maybe i'll try yours to begin with. If there are too many notes available using these filters, I'll probably add restrictions, because I'm not in a hurry to invest, just trying it out. Additional filters I'm considering (the above list looks very good, but to each his own):

-A limit on hard inquiries, probably up to 2 within the last 6 months. I don't want people who've been shopping around for loans recently in addition to Lending Club, but a couple of inquiries is ok, because they may have gotten them for other reasons (new cable contract, bank account, etc).

-Monthly income - at least 6K, verified (though I'm not sure what percentage of borrowers go through income verification, so this may be too restrictive).

-Collections excluding medical - 0. Total collection amount - 0. I don't want to lend money to anybody who has ever defaulted on any loans.

-Minimum credit score - around 720 (still not sure about the specific cut-off).

-No delinquencies in last 2 years. Again, to screen out unstable/irresponsible people.

-Loan purpose - will probably keep Refinance and Consolidate only. Not sure about people who have to use p2p lending for weddings, cars or major purchases.

I will also consider lending to people with less than 10 years since the earliest credit line, but more than 5 years definitely. Also, will probably remove home ownership from the list of criteria, because other criteria are already pretty strict.

Any comments/critiques from more experienced lenders are welcome.

[el mechanico]

I asked about this.. Ok here's my scenario. I'm wanting to buy an unfinished cabin in North Carolina butting up against a national forest. The banks won't loan on it because not septic in place etc.

A Divorce vacation home..


How does this work exactly? I'm not going to do 11 or whatever percent but will downstroke 50%