Straight Dope Message Board

[Mama Zappa]

Originally Posted by Chessic Sense

I took loans that were over a year old. LendingClub doesn't do that. I think they only count 6-month old loans. So they're boosting their numbers. Then I added in the late loans, assuming they'll go bad. Since LendingClub doesn't do that either, they get to back up another 6 months. So if you took out a loan 364 days ago, and never paid a dime on it, you still wouldn't show up in their "default" rate. I put it in quotes because it's really just some math wizardry they use to come up with a nice-looking number.

I talked to Jeff, a sales associate, and he told me that they count Charge Offs as defaults as well. "It's just an accounting term," he said, "an industry standard." I'm not sure I believe him. Nowhere on the site does it mention charge offs being counted as a default. I mean, come on - historical default rates of less than 1%? Are you joking?

Go to the statistics page and put in custom dates of July, 2007, and any date in 2008. I used Sep 30. You'll see those bright, shiny returns drop like rocks. And it confirms what I've said here - A is the best grade because they never default, especially if you also pick by purpose.

I'm also told that the largest investor on the platform has over $7 million invested. Jeff told me some magic number of loans you can have that will "guarantee" a profit, whether large or small. I think it was, like, 75 loans. He said no one that has that many loans has lost money so far. I'll get back to you on that too.

Interesting!

The one quibble / question I have is: why are you questioning that a charge-off is counted as a default? Presumably they only charge off a loan that has gone well into default (or do you think they're double-counting?).

I'm raising an eyebrow on the "size that guarantees profit" since, after all, a portfolio of 75 G class loans might well lose money! 51

[Chessic Sense]

Originally Posted by Mama Zappa

The one quibble / question I have is: why are you questioning that a charge-off is counted as a default? Presumably they only charge off a loan that has gone well into default (or do you think they're double-counting?).

I'm raising an eyebrow on the "size that guarantees profit" since, after all, a portfolio of 75 G class loans might well lose money!

It's not a theoretical point, it's a statistical fact. Jeff wasn't saying that 75 loans can't lose money, he was saying that no one with 75 loans is losing money. I guess the people that have that many loans aren't buying G class loans. Subtle difference. 52

[Chessic Sense]

Here's my count. These are loans that were issued and are at least a year old, so they've had time to go bad.


Good Late Bad Grand Total
Grade
A1 38 1 39
A2 115 1 3 119
A3 188 4 3 195
A4 230 4 3 237
A5 246 6 10 262
B1 146 7 12 165
B2 173 7 20 200
B3 182 8 18 208
B4 228 9 22 259
B5 251 5 31 287
C1 239 17 29 285
C2 205 9 29 243
C3 197 18 32 247
C4 221 7 30 258
C5 185 8 27 220
D1 156 8 27 191
D2 153 10 24 187
D3 135 10 28 173
D4 133 9 29 171
D5 96 11 18 125
E1 85 10 22 117
E2 102 11 23 136
E3 79 7 16 102
E4 65 7 23 95
E5 63 5 7 75
F1 43 2 14 59
F2 30 3 14 47
F3 23 2 12 37
F4 16 2 13 31
F5 14 3 9 26
G1 17 3 5 25
G2 9 5 7 21
G3 12 2 5 19
G4 21 2 10 33
G5 25 4 10 39
Grand Total 4121 226 586 4933

If you do (Late+Bad)/Total, you get Chessic Sense's True Default Rate:

A1 2.56%
A2 3.36%
A3 3.59%
A4 2.95%
A5 6.11%
B1 11.52%
B2 13.50%
B3 12.50%
B4 11.97%
B5 12.54%
C1 16.14%
C2 15.64%
C3 20.24%
C4 14.34%
C5 15.91%
D1 18.32%
D2 18.18%
D3 21.97%
D4 22.22%
D5 23.20%
E1 27.35%
E2 25.00%
E3 22.55%
E4 31.58%
E5 16.00%
F1 27.12%
F2 36.17%
F3 37.84%
F4 48.39%
F5 46.15%
G1 32.00%
G2 57.14%
G3 36.84%
G4 36.36%
G5 35.90%

If you break it out by purpose, using >6mo old loans, you get:

Purpose Bad Total % Bad
car 23 257 8.95%
CC Refi 95 1106 8.59%
consol 390 3337 11.69%
edu 50 304 16.45%
home Imp 67 560 11.96%
house 14 104 13.46%
purchase 29 358 8.10%
medical 21 149 14.09%
moving 13 112 11.61%
other 148 1098 13.48%
business 102 548 18.61%
vacation 2 45 4.44%
wedding 19 211 9.00%

I've bolded the ones of note here. Notice how high the small business loans and medical loans are vs. debt and vacations. Also notice the small sample size of the vacations and weddings compared to the CC Refi and the Debt Consols. 53

[drachillix]

I just had an interesting experience, one of my loans paid off in less than a month.

It made $0.21 in interest

Lending club charged me $0.25 in fees

Well I guess its better than losing it to a bad loan. 54

[Cicero]

I'm having great fun just following this thread. But then my partner is an accountant.
I have a sad life 55

[Mama Zappa]

Originally Posted by drachillix

I just had an interesting experience, one of my loans paid off in less than a month.

It made $0.21 in interest

Lending club charged me $0.25 in fees

Well I guess its better than losing it to a bad loan.

LOL and at the same time. Yeah, better than losing it to a bad loan. If they'd only held off just a few more days you'd at least have broken even!

Whatever happened with that class D loan that was heading south?

My first ever loan is now 16-30 days late - a couple of payment attempts failed and there's now a payment plan in place. It was due on the 28th of last month. I'd be out just shy of 21 dollars if it completely goes south. 56

[Mama Zappa]

An update:
That loan that was misbehaving before hasn't had a payment since the May 28th payment; there've been numerous attempts since then.

That was the first loan I participated in. Loan #2 (an adoption loan) is fine. Loan #3 (debt consolidation) is current but the borrower contacted LC in late July to set up a payment plan. That payment actually got made on time but we'll see how the next few work out.

I don't think any others are troubled. Unfortunately there's not an easy way to look at that should of looking at each loan individually. I wish LC would have a report available that listed all loans and their statuses / most recent collections-related actions. 57

[drachillix]

Currently hovering at 28 loans The one that was going south before still has not paid anything further. I have another one that just went 30 days late another class D I bought into early on, hopefully this one pulls through.

This has been VERY eye opening to me with regard to the world of loans and credit.

OTOH i still check daily and love watching the interest accrue. I have an auto payment for $10/week and combine that with payments to issue new loans whenever $50 builds up. 58

[Mama Zappa]

My bad loan's most recent activities are:
9/10/10 (Friday) Borrower not located (skip trace)
9/10/10 (Friday) Mail service returned pre-collect letter
9/2/10 (Thursday) Collections Agency attempted to contact borrower
.
.
.
8/20/10 (Friday) Engaged external collections agency

So I think it's quite safe to say I'm out the 20.86 s/he still owes. All my others (including the one D class loan) are still current. One of my other initial 3 loans (the skip was the first one) had contacted Lending Club in June to set up a payment plan. The July payment was "completed within grace period"... the August 14 payment was made on time, and there's no 9/14 payment listed. The 10/14 payment says "processing, in payment plan". Not sure what all that is about.

And one other weird one: I had a loan that went a few days late on its first payment (February). When the second payment was due, it was paid in full. Yet I looked at it just now and under Collections History, it says "8/30/10 (Monday) Contacted a 3rd party or borrowers acquaintance". 59

[lindsaybluth]

I find this thread fascinating. Right now I'm just stashing my cash in a savings account (with as high an interest as I can find, from this link someone posted earlier) but once I have 4-6 months of reserve built up, I'll certainly be doing the Lending Club. 60

[pricciar]

I think it is a neat idea. I am glad it has worked out for everyone here. Even if working out means it is fun to watch how the payments have come in, and not necessari as huge investment returns. And, for sure it has been a great read. I am glad you keep coming back to update, Mamma Zappa.

lindsaybluth, aren't you in Pittsburgh (forgive me if I have you confused with someone else)? I don't think PA residents are eligible to be Lending Club investors. I know in California they have some income rules for eligibility. I am pretty sure in Pennsylvania it is just not an option. 61

[lindsaybluth]

Blerg, I am in PA pricciar . But the website list here doesn't list PA. Do I need to join to find out if I qualify? I used the site's search function and it didn't turn up PA, but google results from a year ago say that PA is disqualified. 62

[pricciar]

What are the current “State and Financial Suitability” conditions?

That link from their FAQ gives a list of allowed states and PA isn't listed. 63

[lindsaybluth]

Ah, there it is. Damn. Pennsylvania is riddled with idiotic laws, so I'm not surprised in the slightest. 64

[Chessic Sense]

Originally Posted by lindsaybluth

Ah, there it is. Damn. Pennsylvania is riddled with idiotic laws, so I'm not surprised in the slightest.

*cough* No one checks *cough* where you live *cough*.

Chessic Sense
Former Pittsburgh resident 65

[Chessic Sense]

Figured I should give an update:

Funding 1
Issued & Current 448
Fully Paid 11
Late 16 - 30 Days 0
Late 31 - 120 Days 4
Default 0
Charged Off 1


Of those 4 late loans, 3 are still paying something, mostly interest. Overall, I guess that's a good thing for me, so long as it keeps up. I strictly do Debt Consols and CC Refis in the A and B classes. I've occasionally funded a C1 loan but anything more than that scares me.

For those just now dropping in on the thread, I caution you: earlier analysis and testimony by account managers says that most people don't defaul in their first year, and I funded most of my loans in June. Therefore, beware false confidence in my numbers. I'm sure that over the next 3 years, more than just these 4 loans will go bad, so 1% is NOT the expected default rate! 66

[lindsaybluth]

Originally Posted by Chessic Sense

*cough* No one checks *cough* where you live *cough*.

Chessic Sense
Former Pittsburgh resident

Duly noted .

Chessic, were your chargeoffs/really late stuff/defaults all in the C category? Or was there no specific pattern? Are you still keeping that 10% profit margin you listed earlier? 67

[drachillix]

30 loans out right now...

After my first default charged off I went like .9% negative, that has come back to 1.9% to the good. Of course I have another $25 D Class that is probably gonna charge off too.

Over the last 6 mo or so I have bought nothing but A and B Loans and all of them are paying in a timely manner. 68

[Mama Zappa]

Ouch! Sorry to hear you've got another one going south.

Is the loan officially charged off? or just way late.

My one loan that's gone bad is now 4ish months overdue (hasn't paid since May). Nothing else is running late.... yet. One loan made a large prepayment a few months ago and a smaller prepayment last month; it should be fully paid off in a couple more months if they just make their schedule pyaments.

I do have one D-class loan that's OK so far. Total of about 26 loans.

I'm not really adding new cash to the pot at this point, just letting things accrue and funding a new loan when it adds up to 25 dollars. Right now that takes just over a month. 69

[Onomatopoeia]

A question for the experienced LC lenders here.

Is there a maximum I can invest across all loans? For example, can I lend $10,000 across, say, 80 to 100 loans, or is there a limit? 70

[Mama Zappa]

Originally Posted by Onomatopoeia

A question for the experienced LC lenders here.

Is there a maximum I can invest across all loans? For example, can I lend $10,000 across, say, 80 to 100 loans, or is there a limit?

I'm quite certain you can lend 100 or more on a single loan (which would fit the 10K/100 loan scenario).

They have people with quite large portfolios - Chessic Sense mentions someone with 7 million.

And they can take quite large deposits e.g. 100,000 at once, per some emails I've gotten. This hasn't been an issue for me nor will it be any time soon . 71

[Onomatopoeia]

Originally Posted by Mama Zappa

I'm quite certain you can lend 100 or more on a single loan (which would fit the 10K/100 loan scenario).

They have people with quite large portfolios - Chessic Sense mentions someone with 7 million.

And they can take quite large deposits e.g. 100,000 at once, per some emails I've gotten. This hasn't been an issue for me nor will it be any time soon .

Thank you. That's good information, which, for me, begs the question, why aren't more people using LC as an investment vehicle? Even if all you could expect is, say, a 4% ROI, that's much more than you're going to get at any bank, and the more diversified you are, the less risk you take. Or am I missing something?

I'm seriously considering dumping some cash into LC. I've read the info on their website, and it seems a little too good to be true, so I want to temper my expectations with facts from the real world. 72

[Chessic Sense]

Originally Posted by Onomatopoeia

A question for the experienced LC lenders here.

Is there a maximum I can invest across all loans? For example, can I lend $10,000 across, say, 80 to 100 loans, or is there a limit?

Are you asking if there's a max you can have in your account or a max you can put into one loan? The answer to both is "no", unless you're a millionaire or incredibly bad at this.

LISTEN UP, though: Learn from my mistake. Only put in $25 per loan. If you feel really, really confident about a loan, you can put $50 towards it. Don't start doing that until you get at least 100 loans, though. You need to be aware of the fact that you can be one of those unlucky people that just happens to pick bad loans. Therefore, your main objective early on should be to get as many loans as possible. FORGET ABOUT PROFIT for now. Focus on getting established and diversified. Buy some A-class loans to protect yourself against loss. Then, when you get more money in play, you can start with the $50 and B4-B-5 loans.

Originally Posted by lindsaybluth

Chessic, were your chargeoffs/really late stuff/defaults all in the C category? Or was there no specific pattern? Are you still keeping that 10% profit margin you listed earlier?

The defaults/lates were C2, C1, C1, B3, and B2. The C2 one is the one that's completely late and the B2 filed for chapter 7 bankruptcy. The rest are paying lowered payments. My portfolio is perhaps 35% A-grade, and you'll notice that not a single one of them has been late yet.

As far as my current rate, I'm just quoting the number on the front of my portfolio. It's just an average of my loan's rates. It doesn't reflect losses or anything. Since I've been putting money in here and there at different rates, I can't even begin to calculate how much money I've been making. I'd guess I actually get maybe 7.5 or 8%. But it's one of those things where it spends a lot of time making a little bit more than 8% and all of a sudden, a loan goes bad and for that month, you're making -8%. It's really hard to calculate.

Originally Posted by Onomatopoeia

Even if all you could expect is, say, a 4% ROI, that's much more than you're going to get at any bank, and the more diversified you are, the less risk you take. Or am I missing something?

I'm seriously considering dumping some cash into LC. I've read the info on their website, and it seems a little too good to be true, so I want to temper my expectations with facts from the real world.

Well, for one thing, the stock market just went up by, what, 7% this summer? That's more than LC. Plus, stocks are a proven, commonly advised investment vehicle. Social lending has a reputation for huge risk.

Personally, I think LC got it worked out. They have the right process. It's succeeded where Prosper failed because they have experts setting interest rates instead of the user. That means we're all more likely to benefit. Prosper went south because the winners couldn't get their money into the market because the losers were underbidding them. The only ones making out on that deal are the borrowers.

LC also keeps adjusting their rates to reflect the situation. For example, in 2008, the rate on an A3 was 8% and a B1 was something like 9.8%. Now, it's 7.14% and 10.38%. So they're keeping the balance and making sure that those of us that are diversified are still making a profit while keeping rates down to attract more money. 73

[lindsaybluth]

Any reason not to have just class A stuff? Or would that barely pull a profit in, I suppose.

Chessic, that's all very interesting stuff, thank you! I won't be investing till I have that 6 mo cash stash, but it's all very informative. Aside from my IRA, I own a few hundred shares of Apple, so I have a ways to go at diversification. Much better listening to a wise doper than LC's website testimonials . 74

[Mama Zappa]

Originally Posted by lindsaybluth

Any reason not to have just class A stuff? Or would that barely pull a profit in, I suppose.

Chessic, that's all very interesting stuff, thank you! I won't be investing till I have that 6 mo cash stash, but it's all very informative. Aside from my IRA, I own a few hundred shares of Apple, so I have a ways to go at diversification. Much better listening to a wise doper than LC's website testimonials .

If you're well-enough diversified, the more risky classes can be profitable, I'd guess. But as CS mentions, older loans are far more likely to go bad, and the risk seems to be high enough to possibly wipe out profits even with a broad base of loans.

I initially did mostly B and C class loans; I have one D class and I'm sticking with A at the moment (with my one loan a month) but if I have more cash, I might adopt a scheme similar to what someone above (drachillix?): For every 4 As, fund 2 Bs and 1 C etc.

Even by LCs figures, the return plummets when you get into the riskier classes. Book interest rate soars, but returns drop. Something ain't right in the screening or pricing or whatever; I'd expect to have at least somewhat higher returns as you move down the ladder, even with higher risk. Otherwise who's going to bother? 75

[Raza]

Does LendingClub still have a referral bonus? If so, someone can PM me; I'm about to sign up. 76

[Mama Zappa]

Originally Posted by Raza

Does LendingClub still have a referral bonus? If so, someone can PM me; I'm about to sign up.

Done (let me know if you want me to send it to an email other than your SDMB account's email). 77

[Raza]

I signed up, but was disappointed that the minimum for funding the account with PayPal was $250 - that was more than I was planning to start with. 78

[Mama Zappa]

Originally Posted by Raza

I signed up, but was disappointed that the minimum for funding the account with PayPal was $250 - that was more than I was planning to start with.

Wow - that's definitely changed. When I first signed up, you could transfer any amount via Paypal. Maybe that was because I signed up "cold" without such a transfer. They only wanted you to do Paypal for a limited time, however. I hated having to set up the bank account because Paypal was instant gratification, but the bank account takes 3-4 business days to add money.

If you had to link a bank account to take the hundred bucks, you should be able to transfer any amount that way (I just transferred 15 dollars and have done less than 5 when it was what I needed to top off some accrued payments). 79

[Enderw24]

I'm considering signing up as well. So if someone wants to send a link to me I'll use it to give this a shot. I've got some extra money from eBay sales and would be willing to invest $250 to try this out.

My e-mail is in my profile. I think. 80

[Chessic Sense]

Originally Posted by Raza

Does LendingClub still have a referral bonus? If so, someone can PM me; I'm about to sign up.

There's no bonus for the person already using the service. There's only a bonus for the person signing up. If they were to give bonuses for referrals, then they'd fall under a different SEC category (something about "selling interests" or giving advice or something) and thus have different regs that they're not set up/don't want to handle. 81

[Mama Zappa]

Originally Posted by Enderw24

I'm considering signing up as well. So if someone wants to send a link to me I'll use it to give this a shot. I've got some extra money from eBay sales and would be willing to invest $250 to try this out.

My e-mail is in my profile. I think.

It is, and I did.

As Chessic Sense noted, the bonus is to the new person signing up; an existing client who invites you doesn't get anything except a warm glow . 82

[Mama Zappa]

Oh - and as I understand it, the hundred dollars is reported to the IRS as income - which makes sense. Plus of course whatever earnings you have on that hundred dollars, that would be either interest or dividend. They don't send out 1099s for the interest income unless a single loan's income is greater than 10 dollars, which is annoying. You could have 5 bucks in income on each of a hundred loans, but you won't get a 1099. I assume then you just have to take the figures from the year-end statement and plug those into the tax forms. Whether it should be interest (how I treated my 79 cents last year), or dividend, I'll need to check before this coming January. 83

[Mama Zappa]

Huh - I just reread the whole "invite" page and it now seems that recipients get the hundred dollars ONLY if you invest 10,000 or more. WTF???

Used to be they gave you the bonus (which was a bit smaller, admittedly - 25-50 bucks) regardless.

So much for that! Sorry, enderw24 and Raza!! 84

[Telcontar]

I was going to sign up for this, but one of the fine print checkboxes requires the lender to attest to having income greater than $70,000 and assets greater than the same. I'm presuming it's a tax thing, but it rules me out and is a little weird. 85

[Enderw24]

Originally Posted by Mama Zappa

Huh - I just reread the whole "invite" page and it now seems that recipients get the hundred dollars ONLY if you invest 10,000 or more. WTF???

Used to be they gave you the bonus (which was a bit smaller, admittedly - 25-50 bucks) regardless.

So much for that! Sorry, enderw24 and Raza!!

heh. Well thanks anyway. I'll still look into it this weekend. I'm willing to put as much as $500 into this investment initially. But $10,000? Nu uh. No way. 86

[Mama Zappa]

Originally Posted by Enderw24

heh. Well thanks anyway. I'll still look into it this weekend. I'm willing to put as much as $500 into this investment initially. But $10,000? Nu uh. No way.

Hell, me neither!

I've deposited something less than 600 dollars total, over the course of the year, and have the attitude that if it makes money overall that's fan-dandy-tastic, but it's nothing I can't afford to lose and it's a learning experience.

We may have a windfall in a few months and I might go crazy and put another 500 bucks in... but won't be transferring any major assets just now. 87

[Enderw24]

Whelp, I took the plunge.

$250 invested in 10 different people. My portfolio's 6A, 3B and 1C for a theoretical 9.13% return rate.

It was interesting looking at people's applications. For the most part, I could get a good sense of who I thought would be most likely to pay off their loans. A few I took a gamble on but at $25 it's nothing too crazy. Almost all of them were credit card/student loan refinances.
The ones that wanted to use their loan to buy a wedding had to pay me $25 just for the privilege of punching them in the face.

So I guess now I just sit and wait.

::checking::

No money yet. I'll check again in an hour. 88

[Mama Zappa]

Originally Posted by Enderw24

...
The ones that wanted to use their loan to buy a wedding had to pay me $25 just for the privilege of punching them in the face.
...

Dang - I didn't know we could link up with those sorts of loans. So what'll you invest the face-punching 25 bucks in? .

Actually I agree on the wedding expenses. A wedding is NOT something to go into debt for, IMO. My BIL and SIL each had the 20 grand weddings and the parents chipped in money they couldn't afford, to help pay for same, and 20+ years later they're no more married than we are (with a wedding that cost under a grand). So even tho Chessic Sense's analysis above indicates these to be relatively safe, I'm not playing.

And... welcome to the dark side, LOL. You'll be able to see the accrued interest starting once the loans actually issue. There's typically a few days between when it's fully funded and issued, and when the month starts (I guess it doesn't disburse for a few days then interest starts accruing).

My near-term goal is to get enough loans that I've got one coming due every day or two. I've pretty much got the entire month covered now except for one persistent gap between the 2nd and 8th of the month. Somehow the timing of sufficient cash / the right loan haven't converged yet. . My next sufficient-cash moment should be in about 10 days and maybe this'll be the month!

I'm also fairly close to the point where I will have enough cash flow to invest in a new loan each month just from the repayments (still a couple dollars short now). 89

[drachillix]

Just ordered #31 a B1/36 CC refi. 90

[drachillix]

#32! Move over Wells Fargo!

Interesting that the interest rates seem to be falling. Is this an effort to stay competitive with other loan providers? 91

[drachillix]

Originally Posted by Telcontar

I was going to sign up for this, but one of the fine print checkboxes requires the lender to attest to having income greater than $70,000 and assets greater than the same. I'm presuming it's a tax thing, but it rules me out and is a little weird.

I think it's more along the lines of not having people throwing money in that they cannot afford to lose since there is no refund option and it's very easy to get in over your head. 92

[Mama Zappa]

Originally Posted by drachillix

#32! Move over Wells Fargo!

Interesting that the interest rates seem to be falling. Is this an effort to stay competitive with other loan providers?

I'd bet it is.

At my credit union right now, I could get a car loan for 2.99 % and a 36 month signature loan for 10.75% (a 1 year loan would be less than 7%). 93

[Raza]

I just signed up for my first two loans, a B3 and C2, both debt consolidations. After examing rates of return and my comfort level with the amounts/risk, the B/C seemed to be sweet spot. 94

[Onomatopoeia]

Okay, this past Friday I jumped in...with $250

Because I'm in New Jersey, I can't fund notes on the Lending Club main site. Although I heard Chessic's cough loud and clear, because I'm planning to work up to a sizable investment, in addition to not having a second residence in one of the approved states, I'm just not comfortable skirting the legality. However, I can invest, and have, in their secondary market under FolioFN.

Now that I've taken a plungelet, here are the differences between the two sides of the investing tool that I've been able to ascertain.

On the Lending Club side, you invest in loans that are not yet fully funded. On the FolioFN side, most, if not all loans are already fully funded. The note you are contemplating purchasing is being sold by a Lending Club member who, for whatever reason, is looking to liquidate his or her note(s).

On the Lending Club side, I believe the minimum you can invest in a loan is $25 (someone correct me if I'm wrong here). On the FolioFN side, there is no minimum. You pay whatever the asking price is, whether it's 99 cents, or $13.87, or whatever.

On the Lending Club side, you invest for one of two terms, 36 or 60 months. On the FolioFN side, there is no minimum investment term. You invest for the balance of the term of the specific loan. An advantage of this is you can factor in the borrower's payment history on the loan you're interesting in before purchasing the note. Of course, as the saying goes, past performance is no guarantee of future returns, but it's an additional piece of intelligence that those who invest on the Lending Club side don't have.

Like the Lending Club side, FolioFN investors have access to the borrowers credit information, employment history, salary, debt load, reason for opening the loan, and the questions and answers communicated between potential investors and the borrower before the loan was originally funded.

An added feature on the FolioFN side is the ability to purchase notes at a discount (or markup).

The 8 notes I purchased below were all originally 36 month loans, and all borrowers have made 0 late payments. Loans are either for debt consolidation or to pay off credit cards.


1. $14.38 @ 7.68% Int on $7200 with 12 payments left, A2

2. $8.76 @ 8% Int on $6500 with 12 payments left, A3

3. $12.35 @ 7.51% Int on $10,000 with 14 payments left, A4

4. $51.00 @ 11.89% Int on $25,000 with 20 payments left, B4

5. $55.00 @ 11.36% Int on $23,500 with 30 payments left, B5

6. $25.00 @ 13.22% Int on $8000 with 26 payments left, C2

7. $25.00 @ 13.22% Int on $7500 with 26 payments left, C2

8. $58.51 @ 13.47% Int on $8400 with 18 payments left, C4

And there you have my $250

I have a high probability of seeing these loans closed on time and paid in full, except possibly #5, for which it is too early to tell. My expected rate of return across all 8 loans is 12.05%

I've already accrued $1.88 cents in interest even though I recently purchased the notes, because one of the loan's payments was this weekend. Another one of my notes has a payment due today (10/26), and another on 10/28, so even though I purchased the notes only a few days before the scheduled payment, I get the full interest payment.

I'm just going to watch how things play out with these 8 loans over the next few months. If I'm comfortable, I'll probably drop $1000 across 40 or so loan notes in January.

95

[lindsaybluth]

Very cool guys! I love read updates. Sounds like I'll have to go the route of Onomatopoeia, because LC isn't allowed in PA. 96

[Mama Zappa]

Originally Posted by Mama Zappa

I'd bet it is.

At my credit union right now, I could get a car loan for 2.99 % and a 36 month signature loan for 10.75% (a 1 year loan would be less than 7%).

Updating my own comment: They're about a point lower (in the A-class range anyway) than similar-grade loans already in my portfolio.

I've got a total of 28 loans, most for 25 dollars but a handful for 50. One is fully paid. One hasn't had a payment since May 28 and is in collections. One just funded (an A2, at under 6%). One is under a "payment plan" which seems to be adjusting the due date by a few days but otherwise is keeping current. One has prepaid all but about 5 dollars of my 25 bucks. 97

[Onomatopoeia]

Just checking in to crow that I just received my first payment, after only 5 days as a member. 83 cents! Woo-hoo! What should I buy first?

There's a payment scheduled for tomorrow for a different loan for $1.91. Where's my top hat, monocle, and cigar? I'm rollin' in it, man!

As you can tell, I'm liking this, probably a bit too much.

My only issue is the 83 cent payment was actually scheduled for yesterday, but when I logged in yesterday morning, the status was "Processing", and didn't change to "Current" until approximately 30 minutes ago today, at which time the payment showed in my account. There seems to be a 24- to 36-hour period of processing for some reason. Anyone else experiencing this?

Anyway, I think I'll treat myself to a steak dinner at Ruth's Chris tonight, now that I'm so rich and all, not to mention suddenly cool and important. 98

[Mama Zappa]

Originally Posted by Onomatopoeia

Just checking in to crow that I just received my first payment, after on...
My only issue is the 83 cent payment was actually scheduled for yesterday, but when I logged in yesterday morning, the status was "Processing", and didn't change to "Current" until approximately 30 minutes ago today, at which time the payment showed in my account. There seems to be a 24- to 36-hour period of processing for some reason. Anyone else experiencing this?...

I'm finding that it takes a tad over 4 full business days for the payment to actually show up in the cash balance. So if it's due on Monday, my cash increases the Friday. If it's due on Tuesday, it hits the following Monday. If there's a holiday in there, it takes a full calendar week. If you're truly getting credited in 24-36 hours that's much better! 99

[Onomatopoeia]

Originally Posted by Mama Zappa

I'm finding that it takes a tad over 4 full business days for the payment to actually show up in the cash balance. So if it's due on Monday, my cash increases the Friday. If it's due on Tuesday, it hits the following Monday. If there's a holiday in there, it takes a full calendar week. If you're truly getting credited in 24-36 hours that's much better!

Cool! Then I have absolutely nothing to complain about. Want some of this caviar? 100