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slap me silly posted:The fact that you can be reinvesting that $3200/mo in something else. To get that 5%, you effectively averaged the 9.5% return of the lending investment with the 0% return from letting your $3200/mo sit and moulder. Ahh. Thank you very much.
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Dec 4, 2012 23:13
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slap me silly posted:The fact that you can be reinvesting that $3200/mo in something else. To get that 5%, you effectively averaged the 9.5% return of the lending investment with the 0% return from letting your $3200/mo sit and moulder. Ahhhh -- I didn't realize they calculated prospective reinvestment in to the projections.
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Dec 5, 2012 03:11
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Well, it's not that so much as that they estimate based on the time your money is actually in the instrument. If you make the mistake of assuming you don't need to reinvest to get the calculated return, that's on you. Not meaning to sound all hoity toity because I went through exactly this same bit of head-scratching before I started buying notes a few years back... slap me silly fucked around with this message at 03:46 on Dec 5, 2012 |
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Dec 5, 2012 03:44
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It's just compound interest basically, right? If a bank took the interest that you savings account generated and put it in a non-interest generating account and you never moved it to the savings account then you would have a lower rate of return. Due to how a savings account is structured they don't do that, but the math (assuming no delinquent notes) works out the same, right?
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Dec 5, 2012 09:40
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So what exactly has changed about LC/Prosper since '08-ish? Any good articles that sum up the industry now? I have a five year old Prosper account I never funded; it looked promising pre-recession but my spider sense kept tingling and sure enough, everyone getting in during the early years got killed. How has LC learned from this?
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Dec 5, 2012 10:08
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Fork of Unknown Origins posted:It's just compound interest basically, right? If a bank took the interest that you savings account generated and put it in a non-interest generating account and you never moved it to the savings account then you would have a lower rate of return. Due to how a savings account is structured they don't do that, but the math (assuming no delinquent notes) works out the same, right?
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Dec 5, 2012 13:18
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Right, but when you get those payments and then reinvest them that's where it becomes compound interest, in my head anyway. Am I approaching this wrong?
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Dec 5, 2012 17:41
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Adar posted:I have a five year old Prosper account I never funded; it looked promising pre-recession but my spider sense kept tingling and sure enough, everyone getting in during the early years got killed. How has LC learned from this?
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Dec 5, 2012 21:35
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Picked up some notes @ 13.41% weighted average. I was probably too conservative, but we'll see. Did I read correctly on one of the data collection sites that one user has over a hundred million invested in notes? That's...something.
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Dec 5, 2012 23:11
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Definitely going to not do too much heavy investing with this. I'll probably start with $250 into 3 year notes. I'm pretty conservative with my vetting as well. If they're revolving credit or debt to income ratio is too high I don't bite. Also, I use a rule that if I can't afford the monthly payment then they can't either. I did see someone who worked at Wal-mart asking for a 30K loan. Yea right..
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Dec 5, 2012 23:19
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I have been in prosper for a little over a year with $500 invested. So far no defaults or late payments on any notes, and a 12% return. My strategy is to avoid debt consolidation loans because those borrowers seem likely to figure out that bankruptcy is better than paying double digit interest for 3-5 years. I aim for high income people that are bad with money and want to finance impulse buys. There are lots of professionals who want to remodel their kitchens, I give them my money. I haven't found a tool that compares default rates by loan purpose. My question is, has anyone tried doing this through a roth ira? The structure and time frame seem amenable to this. Prosper was pushing it last year around tax time, but that option seems to have disappeared.
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Dec 6, 2012 14:09
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quote:I haven't found a tool that compares default rates by loan purpose. I think interest radar does that somewhat - it looks at certain words in the description, and goes from there. So far, still holding at 2 possible defaults, 284 notes issued and 58 in funding/review. Monthly payments totaling $212.21. I will be doing one more large-ish deposit on 12/14, then going back to just buying 10 notes per pay. I obviously don't have a crystal ball, but I think if I stick to the minimum per note, and keep compounding as much as possible, I should be able to get a decent chunk over the next few years. I should add, my husband and I also put as much as possible into our Roth IRA's, and his 401k. What I put into LC is only about 15% of our long-term savings money.
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Dec 6, 2012 14:27
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From the OP:April posted:For this particular loan, I contributed $25.00, and my share of the monthly payment is $0.85. Over the life of the loan, I will earn $30.60, or slightly over 20% So you go to the effort of vetting these things for the possibility of making $5.60 in 3 years time? This sounds somewhat silly :/
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Dec 9, 2012 03:14
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cheese eats mouse posted:Definitely going to not do too much heavy investing with this. I'll probably start with $250 into 3 year notes. I'm pretty conservative with my vetting as well. If they're revolving credit or debt to income ratio is too high I don't bite. Also, I use a rule that if I can't afford the monthly payment then they can't either.
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Dec 9, 2012 04:53
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Contra Duck posted:From the OP: You're completely missing the point. People who invest $25 in a loan don't stop at just one. They're putting money down on a number of loans and probably investing more every month (or at least periodically).
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Dec 9, 2012 07:19
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Yes, and the search tools make it pretty quick and easy to filter and search for the type loan you want to give.
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Dec 9, 2012 07:44
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Contra Duck posted:So you go to the effort of vetting these things for the possibility of making $5.60 in 3 years time? This sounds somewhat silly :/ My sole grade A note had a failed payment after 14 straight months of being on time. Just goes to show that the A/Bs aren't always as rock solid as they seem. (obviously tiny sample size just sayin).
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Dec 9, 2012 16:36
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Uranium 235 posted:Just because they work for Wal-Mart doesn't mean they work in a retail store. I wouldn't bet on that unless they live in northwest Arkansas (Wal-Mart HQ), though. Don't remember if they did, but I just didn't want to chance it since retail is so volatile when it comes to working hours.
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Dec 9, 2012 16:40
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Saint Fu posted:My sole grade A note had a failed payment after 14 straight months of being on time. Just goes to show that the A/Bs aren't always as rock solid as they seem. (obviously tiny sample size just sayin). pre:Bad rate | Avg % | Net % (includes bad rate) A: 1.21% | 7.47% | 5.71% B: 2.05% | 11.68% | 8.90% C: 3.27% | 14.44% | 10.23% D: 4.24% | 17.07% | 11.78% E: 5.23% | 19.07% | 13.03% F: 6.44% | 21.10% | 13.53% G: 9.83% | 21.76% | 12.21% Bonus Edit: Based on a quick glance, there are currently no loans at F or G-ratings that meet my search criteria to even look at, but if I found an F-rated loan I liked I might consider it. Alereon fucked around with this message at 18:55 on Dec 9, 2012 |
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Dec 9, 2012 17:57
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Is there a similar service in Canada? It sounds like a fun thing to do with slush savings...
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Dec 9, 2012 20:51
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Am I missing something? This seems like a huge amount of work to do for such a small return... You could scale it up, but the risk is high so I'm not sure that would be a wise idea.
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Dec 9, 2012 21:12
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Why does LC have a $70,000 annual gross income requirement in states other than California and Kentucky? Is this something that they really even look into? This is something I'm interested in, but I wouldn't meet that requirement.
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Dec 9, 2012 21:23
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kansas posted:Am I missing something? This seems like a huge amount of work to do for such a small return... You could scale it up, but the risk is high so I'm not sure that would be a wise idea. Scaling up (in the form of investing in more $25 loans) is a good thing for your risk because it reduces the impact of a single loan defaulting and moves you closer to the net annualized return. Note that this does NOT reduce your risk from overall economic factors that make people less able to return loans in general.
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Dec 9, 2012 21:42
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monsieur fatso posted:Why does LC have a $70,000 annual gross income requirement in states other than California and Kentucky? Is this something that they really even look into? This is something I'm interested in, but I wouldn't meet that requirement.
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Dec 9, 2012 21:43
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kansas posted:Am I missing something? This seems like a huge amount of work to do for such a small return... You could scale it up, but the risk is high so I'm not sure that would be a wise idea. Correct me if I am wrong, but the days of getting ~5% returns without any work are pretty much over. For comparison,Bankrate is telling me that 3 year CD rates are about 1.3%.
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Dec 10, 2012 15:27
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SubjectVerbObject posted:Correct me if I am wrong, but the days of getting ~5% returns without any work are pretty much over. For comparison,Bankrate is telling me that 3 year CD rates are about 1.3%.
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Dec 10, 2012 17:49
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Uranium 235 posted:Well you can always just throw money in a stock market index fund. That takes almost no work. There's no way of knowing what return you'll get, but 5% isn't out of the question. Yeah, I probably should have added "and without decent risk". LC looks like it takes work, but by doing so you can get returns and minimize risk.
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Dec 10, 2012 18:52
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quote:Am I missing something? This seems like a huge amount of work to do for such a small return... You could scale it up, but the risk is high so I'm not sure that would be a wise idea. The return on individual notes isn't much, especially if you put the minimum on each note. What's exciting to me is the compounding that can happen. If you get enough notes to reinvest in new notes every so often, you keep spreading out the risk, and growing your returns, without putting in any more of your own money.
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Dec 10, 2012 20:56
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I just took a debt consolidation loan through LendingClub. It's a very easy process and I'm happy to have one payment now instead of 3, and I saved ~6% on the interest rate. The loan is at 9% vs. the 15% I had with Chase. Payments come out of my bank account automatically, with a reminder e-mail 5 days in advance. The loan was funded within a week. It got to around 50% funded, with about 25 people putting some in, and then one guy took the whole rest of it. It's neat to have all of these individuals putting their 'faith' in me and helping me out.
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Dec 10, 2012 23:32
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Astonishing Wang posted:I just took a debt consolidation loan through LendingClub. It's a very easy process and I'm happy to have one payment now instead of 3, and I saved ~6% on the interest rate. The loan is at 9% vs. the 15% I had with Chase. Payments come out of my bank account automatically, with a reminder e-mail 5 days in advance. The loan was funded within a week. It got to around 50% funded, with about 25 people putting some in, and then one guy took the whole rest of it. It's neat to have all of these individuals putting their 'faith' in me and helping me out. It's nice to read an account from the other side. I was incredibly skeptical about the 27% interest rates on some P2P loans, but then I learned that many credit cards will soon have a max interest rate of 29.99%. I guess it makes sense to consolidate at anything less than that. Does anyone know if there's a way to monitor a specific loan's performance without investing in it? Or one from the past? I'm skeptical about some loans that reach 100% funding but I don't know how to see if my call was correct or not.
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Dec 16, 2012 20:28
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I don't think you can do that - once the loan is funded, you can only see it if it's actually in your portfolio. You could look on the trading site, though, and see if someone is trying to offload it?
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Dec 17, 2012 18:15
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Is LC down for anyone else?
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Dec 17, 2012 18:35
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quote:Is LC down for anyone else? It was down for me for a couple of hours earlier, seems to be back up & running now.
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Dec 17, 2012 19:34
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I know its been said before, but my God it takes a long time to transfer money to Lending Club. Content: I read today that they are expanding to Indiana.
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Dec 20, 2012 02:52
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I seem to have interest trickling into my account? Every day it adds a few cents. It's enough that over a year it would be significant. I thought it might be an ongoing estimate of the payback rate of the notes over time, but it's much less than that.
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Dec 20, 2012 16:00
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Jalumibnkrayal posted:I seem to have interest trickling into my account? Every day it adds a few cents. It's enough that over a year it would be significant. I thought it might be an ongoing estimate of the payback rate of the notes over time, but it's much less than that. The accrued interest is added daily, then moved to "available cash" when a payment is made.
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Dec 20, 2012 17:34
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How good is this for borrowers? I wouldn't mind refinancing a credit card debt because the current APR is awful.
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Dec 20, 2012 18:53
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Sylink posted:How good is this for borrowers? I wouldn't mind refinancing a credit card debt because the current APR is awful. AW just took out a loan a little over a week ago and sounds like it went smoothly: Astonishing Wang posted:I just took a debt consolidation loan through LendingClub. It's a very easy process and I'm happy to have one payment now instead of 3, and I saved ~6% on the interest rate. The loan is at 9% vs. the 15% I had with Chase. Payments come out of my bank account automatically, with a reminder e-mail 5 days in advance. The loan was funded within a week. It got to around 50% funded, with about 25 people putting some in, and then one guy took the whole rest of it. It's neat to have all of these individuals putting their 'faith' in me and helping me out.
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Dec 27, 2012 18:53
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I just had my first charge-off. The borrower had made several payments, so my loss was only about $20. I have a few others that are over 30 days late, but I'm thinking it's the season for bad financial choices, and I'm hoping they start getting back on track in January. Here's how my account looks right now:quote:My Notes at-a-Glance (433) If the 3 that are over 30 days late end up defaulting, that's still less than a 1% failure rate. I'm still getting regular payments, and so far it looks like this: quote:Payments to Date - $607.75 So far, so good! Most of my notes are newer, though, so it'll be interesting to see how it plays out over the next year or so.
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Dec 27, 2012 19:07
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I applied for a loan but it wasn't that great of a rate nor was it enough to actually consolidate the debt and be worthwhile. That was neat, though. For the record, I have good credit but I'm guessing the amount of debt is too high for them or something.
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Dec 28, 2012 14:09
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