Straight Dope Message Board

[Hockey Monkey]

To date I've realized 13.6% annualized return. Wow! I really just kinda remembered I had this account. I'm bought 2 more notes today with the $30 I had sitting in there doing nothing, and I'm transferring in some more funds as soon as I verify my bank account. I had 6 loans with 5 active and 1 paid in full, bought 2 today and I'd like to get up to 25 or so. I have to trade on the Foliofn platform because of where I live, but I kind of like that you can see the history of the loan before making a decision to buy.

I limit my search parameters to loans that are current and less than 36 months, then I only purchase loans that are offered at a discount. 151

[Chefguy]

Originally Posted by Onomatopoeia

Hi Chef,

You won't see it on the home page, or login page. What you have to do first is to create an LC account. If your state doesn't allow you to use the main LC platform to fund notes, you will be given an option at that time to sign up with Foliofn, but again, you must create a Lending Club account first.

Unfortunately, it won't allow me to register because it requires a state to be entered in a field, and Oregon isn't included. 152

[Onomatopoeia]

Originally Posted by Chefguy

Unfortunately, it won't allow me to register because it requires a state to be entered in a field, and Oregon isn't included.

Hi Chef,

I just went to the account creation page and, you're correct, Oregon is not on the list. I just called Lending Club and spoke to Blake for you. I told him I have a friend in Oregon who's interested in investing. Blake told me that Oregon is one of the states not approved to invest in either the Lending Club or Foliofn side.

He did say that if you are an accredited investor, they could make arrangements for you to invest, but you'd have to speak to them for the details, and an explanation of what would make you an accredited investor.

I'm going to PM you this info as well. 153

[Chefguy]

Originally Posted by Onomatopoeia

Hi Chef,

I just went to the account creation page and, you're correct, Oregon is not on the list. I just called Lending Club and spoke to Blake for you. I told him I have a friend in Oregon who's interested in investing. Blake told me that Oregon is one of the states not approved to invest in either the Lending Club or Foliofn side.

He did say that if you are an accredited investor, they could make arrangements for you to invest, but you'd have to speak to them for the details, and an explanation of what would make you an accredited investor.

I'm going to PM you this info as well.

Don't know what an accredited investor is, but I'm reasonably sure that I don't qualify. What a pain in the arse. I wonder what the hell Oregon's problem is. 154

[Chefguy]

So what's the downside/risk of using my sister's address in Alaska? Does anything get mailed to you? What about tax statements? 155

[Onomatopoeia]

Originally Posted by Chefguy

So what's the downside/risk of using my sister's address in Alaska? Does anything get mailed to you? What about tax statements?

I know others have done it, but I don't have any info on how it would work. 156

[Chefguy]

Well, I don't want to get crossways of Oregon tax laws, so perhaps I should call the people at Lending Club. 157

[Onomatopoeia]

Originally Posted by Chefguy

Well, I don't want to get crossways of Oregon tax laws, so perhaps I should call the people at Lending Club.

I think it'd be worth the phone call to find out what you can do, if anything, through them. None of my other investments are returning anywhere near the rates I'm getting from Lending Club. 158

[drachillix]

Just for giggles I went and looked through foliofn, holy crap there are some morons posting stuff over there. Either that or there are really ugly typos...people wanting $250 for loans with $22 in principal remaining... or better yet, who posts $500 on a D loan...then tries to sell it for more than $500 when their credit drops.

Do they think we are that stupid. 159

[Chessic Sense]

Originally Posted by drachillix

Just for giggles I went and looked through foliofn, holy crap there are some morons posting stuff over there. Either that or there are really ugly typos...people wanting $250 for loans with $22 in principal remaining... or better yet, who posts $500 on a D loan...then tries to sell it for more than $500 when their credit drops.

Do they think we are that stupid.

It's not stupidity, it's laziness. Over time, the outstanding principal goes down. People post an offer of, say, $250 for $250 outstanding, and it doesn't sell. 12 months later, it's only $25 outstanding and the offer hasn't been updated or deleted because the seller forgot about it or doesn't care enough to come back to it. It'll be there until the loan has been repaid in full. 160

[Chessic Sense]

Originally Posted by Onomatopoeia

Does anyone know someone with a large LC account?

I'm currently, uh..."winning" the thread with $12,000+. Why do you ask? 161

[Onomatopoeia]

Originally Posted by Chessic Sense

I'm currently, uh..."winning" the thread with $12,000+. Why do you ask?

Because I'm thinking about doing some serious investing, maybe $10K at first. Blake said he may be able to set something up for me that would get me around the NJ restriction prohibiting me from investing directly through LendingClub, but I'd have to commit to $25K, which I'm not ready to do.

Blake also said plans to revamp the Foliofn UI are in the works, thank goodness. I told him that the search function is weak; he said he knows. 162

[Onomatopoeia]

Originally Posted by Chessic Sense

It's not stupidity, it's laziness. Over time, the outstanding principal goes down. People post an offer of, say, $250 for $250 outstanding, and it doesn't sell. 12 months later, it's only $25 outstanding and the offer hasn't been updated or deleted because the seller forgot about it or doesn't care enough to come back to it. It'll be there until the loan has been repaid in full.

If I understand you, you're talking about people who place their notes on the market, correct? If so, I don't think that's the way it works. I had a loan note (still have it actually) that I tried to place on the market 2 weeks after I purchased it when I realized the borrower's credit rating had plummeted. After 30 days, when no one purchased my note, I received the following email from LendingClub:

----
Dear XXXXX,

We thought you should know that 1 note(s) you made available for sale on the trading platform did not sell before the expiration date you selected.


Visit your Trading Account for details.




Regards,
The Foliofn team

-----


The next time I logged in, the note I attempted to sell was back in my portfolio. The borrower hasn't defaulted, or even paid late, so it's working out.


163

[Mama Zappa]

Wowsers.

I had a payment get credited today and as I often do, I glance at the loan status. The borrower's rating has dropped, which is not that unusual - people bounce up or down a notch many months.

This fellow dropped FOUR slots in one month. They were originally in the 715-749 range, had gone to the 750-779 range for several months... and plummeted down to the 640-659 range. Wow. That's 100ish points in a month. The loan's an A5 - a decent risk, supposedly.

As noted earlier, this is the third big drop I've seen this month. What happened to the economic recovery??

I wish their reporting tools included credit score trends easily viewable with the list of loans. I have to look at each one individually which can be a pain. 164

[Mama Zappa]

Originally Posted by Chefguy

So what's the downside/risk of using my sister's address in Alaska? Does anything get mailed to you? What about tax statements?

They don't do tax statements - unless you have a single investment that brings in more than 10.00 in a year. As in, a single loan. My 25.00 loans are bringing in maybe 3 bucks a year apiece in interest, so that's pretty unlikely unless you invest several hundred dollars in a loan.

Now, I do NOT know what happens if you become an investor while living in Alaska then move to Oregon, Are you locked out of future investments at that point?

BTW - tax-wise, I've basically taken my total interest income, subtracted out fees and defaults, and declared that as interest income on my schedule B. 165

[Onomatopoeia]

One of my loan notes paid off in full today...6 months early.

ETA: I purchased it at a slight markup, so I didn't even make my full investment back. Double-. I only lost 17 cents, but still. 166

[lev69]

I've been looking into Lending Club, and wanted to share some information I gathered, just trying to figure out some of the particulars in the investing.

All information in this run is for a 36 month loan. I may come up with a nice graph to post at some point, but, I think this is enough for the moment.

#1: If a loan pays off early, as some noted, you may loose money. I did some calculating and determined a few useful numbers.

At a 6% APR, you are profitable after 3 total payments.
Between 7 and 11% APR, it takes 2 payments to be profitable.
At 12% APR and above, you have become profitable after 1 payment.

This means that if your loan is paid off early, it will take that number of payments in that APR range to 'not loose money'.


#2: At some point during the loan process, you will have collected enough P&I for your loan to 'break even'. Simply put, you have collected as much or more than you have loaned. Until this point happens, essentially, you have not 'made any money' on that investment. (Yes, I know you could sell it early, but, until sold, the investment has not made money).

Here are the 'break even' milestones in months for between 5 and 20 % interest rates. Granted, if you interest rate is between one, which they often are, you may be closer, but this is just for a quick glance at the overall picture.

5- 6% - 33
7 - 8% - 32
9 - 10% - 31
11- 12% - 30
13 -15% - 29
16 - 17% - 28
18 - 20% - 27

I thought some folks would be interested in seeing how long it takes to make back the original investment on any given loan. And, this DOES take into account the 1% fee that Lending Club takes on payments.

If anyone has any comments, I'd love to hear them. Otherwise, just add this to your risk assessment list.

Zach 167

[lindsaybluth]

Originally Posted by drachillix

FYI anyone else who is interested Mama Zappa or myself can send you an invite thet will get you $25 credit to start, (wish they gave US something for a signup)

Hey guys, do they still do those $25 invites? If so, somebody PM me (in fact, the SO wants to do it too, so two people PM me ) 168

[Onomatopoeia]

Originally Posted by lindsaybluth

Hey guys, do they still do those $25 invites? If so, somebody PM me (in fact, the SO wants to do it too, so two people PM me )

I don't see anything on the Lending Club site about $25 invites; perhaps it was a short term promotion or something. They are currently promoting $100 to new investors who open an account with $2500. This may or may not be an incentive for you. It wasn't for me.

I waded in slowly, starting with $250. I invested another $250 in January, and an additional $250 at the beginning of April, for a total investment of $750 since opening my account in 6 months ago. I currently have 27 loan notes; I had 28, but one paid off early 2 weeks ago. As of this morning, I've currently had payments totaling $150.73, of which $26.19 is interest. I'm now at the point where I'm receiving a payment three times a week. Yeah, they're tiny, but it's still fun to see more money in my account every time I log in.

I keep telling myself that I'm going to invest a good chunk of cash at once, but I keep holding off. I may still do that at some point, but for now investing $250 every three months feels about right. 169

[LurkMeister]

I was interested in this, but ran into two obstacles. First of all, I live in North Carolina, which is not one of the states on their eligibility list. Second, my annual gross income is under $70,000.00. I assume there's some reason that they don't want people making less than that participating. 170

[lindsaybluth]

Originally Posted by Onomatopoeia

I don't see anything on the Lending Club site about $25 invites; perhaps it was a short term promotion or something. They are currently promoting $100 to new investors who open an account with $2500. This may or may not be an incentive for you. It wasn't for me.

Mmm no way would I dump that much to begin with. I would over a year, but not in one fell swoop. Who knows, I could be shitty at picking loans for all I know. That's too bad about the $25, I was hoping to help someone out.

Chessic Sense, when you lived in PA, did you register with your PA address all smoothly? Chefguy, did you end up using your sister's address?

Originally Posted by LurkMeister

Second, my annual gross income is under $70,000.00. I assume there's some reason that they don't want people making less than that participating.

Methinks a lot of people lie about this. I know two investors IRL who are recent graduates making far less. It's supposed to be a protection thing for you and this varies by state. You're responsible enough to know you won't go dumping your whole salary into this thing. Why should you be prohibited from making a little money because you don't meet an abstract requirement? 171

[drachillix]

Originally Posted by lindsaybluth

Methinks a lot of people lie about this. I know two investors IRL who are recent graduates making far less. It's supposed to be a protection thing for you and this varies by state. You're responsible enough to know you won't go dumping your whole salary into this thing. Why should you be prohibited from making a little money because you don't meet an abstract requirement?

I make less than half of that, so count me in the liars. I throw in like $25 extra a month and recycle payments. I'm at like 42 loans now. 172

[Chessic Sense]

Originally Posted by lindsaybluth

Mmm no way would I dump that much to begin with. I would over a year, but not in one fell swoop. Who knows, I could be shitty at picking loans for all I know. That's too bad about the $25, I was hoping to help someone out.

Chessic Sense, when you lived in PA, did you register with your PA address all smoothly? Chefguy, did you end up using your sister's address?



Methinks a lot of people lie about this. I know two investors IRL who are recent graduates making far less. It's supposed to be a protection thing for you and this varies by state. You're responsible enough to know you won't go dumping your whole salary into this thing. Why should you be prohibited from making a little money because you don't meet an abstract requirement?

When I joined in 2007, they didn't have all these rules. After I put some money down, they went into a quiet period while they registered with the SEC. That scared the crap out of me because a quiet period sounds exactly like what a shady website would do.

But when they came back online, they had all these new rules. You had to make a certain amount of money. You had to live in certain states. You had to register stuff. They don't do it because they want you to be a happy investor. They do it because it's the law. Whatever laws PA demands that internet loan underwriters follow, and whatever regulations they are subject to, are too expensive/arcane/whatever for LendingClub to find worthwhile.

So they don't let under-$70k people invest because it's a regulation, and they don't let Pennsylvanians, et al., invest because they're not in compliance with PA law.

Fortunately, I soon moved to VA and made >$70k, so I was fine regardless. But again, no one checks. 173

[lindsaybluth]

Ahh, thanks for the info I had no idea you'd been in it since 2007, that's a long time! But clearly you've been pleased with how things have gone. 174

[amarone]

Well, I've taken the plunge. My online savings account has dropped its rate to 1.15% so I thought I would see if Lending Club can help me boost returns on the fixed income part of my portfolio. I've put $1,000 in to see how it goes before possibly investing more substantial amounts.

I bought 40 $25 notes going all the way down to an E-rating:

A 35%
B 25%
C 12%
D 10%
E 18%

The tilt towards E-rating was because statistics show that the E notes have actually defaulted less than D notes and the historical return looks good relative to the risk.

The weighted average rate is 11.42% I assume that is before fees and expected defaults (Does anyone know? A search of the Help for "weighted average return" gets zero hits). I have seen expected returns showing fees and defaults allowed for when I submit an order, but have not been able to find that again afterwards - if anyone knows how, please let me know.

As you earn only $5 or so per note, it is not worth it to me to do a lot of research, so I mostly just relied on a filter to find 36-month notes from people who have been employed 2+ years and wanted loans for credit card refi, debt consolidation, weddings or dream vacation, and for people with an income of $4k+ per month. I avoided loans that seemed for too much money. If you have to borrow for your wedding, then you should not be spending $30,000 on it. I don't trust someone like that to be able to manage their finances well enough to repay the loan.

I found it irritating that so many loans don't go through, although I suppose it is a good thing that they are vetted. Of my original 40, 10 did not complete. When attempting to purchase 10 more, one did not complete, so I had to go through the purchase cycle three times over a two and a half week period to get fully invested.

But now I am done and will sit back and see what happens. 175

[Onomatopoeia]

amarone, I don't have answers to your questions, but good luck and welcome aboard. 176

[Mama Zappa]

Originally Posted by amarone

...
I found it irritating that so many loans don't go through, although I suppose it is a good thing that they are vetted. Of my original 40, 10 did not complete. When attempting to purchase 10 more, one did not complete, so I had to go through the purchase cycle three times over a two and a half week period to get fully invested.

But now I am done and will sit back and see what happens.

Welcome to the dark side .

When I choose a loan, I usually add "reviewed by lending club" to the filters - since I've been doing that, I don't think I've had any fail to go through. Also, some of the loans might not have gotten full funding, so the borrower decided not to go through (I'd bet that's the case with some of your lower-grade loans).

It is funny, that blip in the expected returns at the lower grades!

I have 42 or so loans outstanding right now, though not a full thousand dollars in value, since quite a lot of them were purchased with repayments from earlier loans. So far no others have defaulted aside from my very first loan, though my second loan (for adoption) shows a two-notch drop in credit rating in recent months. So things don't look so great there.

I had another one drop 3-4 notches in a single month... then rebound completely the next month. I wonder if they had something reported incorrectly then removed.

At 40 loans, you'll have enough repayments to fund a new loan a bit more than once a month (I estimate 80 cents per loan, so that would be 32 dollars a month). So let's say every 22-23 days you can fund a new loan just from the proceeds. 177

[Mama Zappa]

Originally Posted by Chessic Sense

...
Fortunately, I soon moved to VA and made >$70k, so I was fine regardless. But again, no one checks.

I know they don't have a good way to check on the income... but when you register, don't you have to provide a mailing address? (it's been so long since I did, that I don't remember, but I have to assume I did). And what would they do if you signed in with, say, a PA address? Say "sorry!"? 178

[Chefguy]

Originally Posted by Mama Zappa

I know they don't have a good way to check on the income... but when you register, don't you have to provide a mailing address? (it's been so long since I did, that I don't remember, but I have to assume I did). And what would they do if you signed in with, say, a PA address? Say "sorry!"?

Yes, you have to provide an address. The 'state' block is a dropdown list that excludes states that don't allow this type of investment, so you never get off the registration page. 179

[Orionizer]

Originally Posted by Onomatopoeia

Hi Chef,

I just went to the account creation page and, you're correct, Oregon is not on the list. I just called Lending Club and spoke to Blake for you. I told him I have a friend in Oregon who's interested in investing. Blake told me that Oregon is one of the states not approved to invest in either the Lending Club or Foliofn side.

He did say that if you are an accredited investor, they could make arrangements for you to invest, but you'd have to speak to them for the details, and an explanation of what would make you an accredited investor.

I'm going to PM you this info as well.

Would it be possible for you to contact someone about when NC might be available? 180

[Mama Zappa]

Just found this (when trying to google "accredited investor"): there's a competitor coming:
http://www.sociallending.net/news/ne...b-and-prosper/

And there's a link in that article to the wiki article on accredited investors. I suspect most of us would not qualify!!

Originally Posted by wikipedia

for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars not including the value of one's residence or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.

181

[Onomatopoeia]

Originally Posted by Mama Zappa

Just found this (when trying to google "accredited investor"): there's a competitor coming:
http://www.sociallending.net/news/ne...b-and-prosper/

And there's a link in that article to the wiki article on accredited investors. I suspect most of us would not qualify!!

Originally Posted by wikipedia

for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars not including the value of one's residence or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.

Zounds! A million excluding one's residence? 182

[Onomatopoeia]

Originally Posted by Mama Zappa

At 40 loans, you'll have enough repayments to fund a new loan a bit more than once a month (I estimate 80 cents per loan, so that would be 32 dollars a month). So let's say every 22-23 days you can fund a new loan just from the proceeds.

I'm at the point where I'm able to purchase a new note with proceeds from the previous 5 weeks. I just purchased another one with no additional investment. I'm back up to 28 notes after the one that paid off early brought me down to 27. 183

[Chefguy]

Originally Posted by Onomatopoeia

Zounds! A million excluding one's residence?

I could get there, but I'm not about to release my financials to anybody. 184

[Orionizer]

Actually looks like you can setup an account in NC now, but it states the minimum is $250 for a PayPal transfer... What happened to the $25 minimum???

ETA - My mistake - I was able to sign up, but cannot use the standard site - have to use the note trading... 185

[Onomatopoeia]

Originally Posted by Orionizer

Actually looks like you can setup an account in NC now, but it states the minimum is $250 for a PayPal transfer... What happened to the $25 minimum???

ETA - My mistake - I was able to sign up, but cannot use the standard site - have to use the note trading...

I use the trading platform exclusively. Let me know if you have any questions. 186

[Mama Zappa]

Just noticed something: Apparently they've locked down the questions you can ask the borrower, to a handful of canned ones (that seem to correlate with the loan's stated purpose). Which is annoying; I wanted to ask the borrower to comment on a delinquency listed on the loan page.

I'm not one of those ones who won't ever lend to someone with a delinquency - I figure a single goof is not a huge issue; bills get misplaced etc. More than one, I'd probably run away from. 187

[Mama Zappa]

Originally Posted by Onomatopoeia

I use the trading platform exclusively. Let me know if you have any questions.

Oooh - I do, I do!

Since I'm in a state where I can invest directly, I do so. But if I were to wish to liquidate some loans, what sort of things do you look at when deciding what to purchase?

For example I've got a couple that are good rates (B or C class) and the borrower's credit score has improved since the initial loan, and stayed at the improved level. I'd assume those would be more appealing and I might sell them for a little more than the loan balance? 188

[Mama Zappa]

Originally Posted by Mama Zappa

Just noticed something: Apparently they've locked down the questions you can ask the borrower, to a handful of canned ones (that seem to correlate with the loan's stated purpose). Which is annoying; I wanted to ask the borrower to comment on a delinquency listed on the loan page.

I'm not one of those ones who won't ever lend to someone with a delinquency - I figure a single goof is not a huge issue; bills get misplaced etc. More than one, I'd probably run away from.

They have indeed locked down the questions:
http://steadfastfinances.com/blog/20...b-investments/

http://blog.lendingclub.com/2011/04/...y-and-privacy/

Pure bullshit, in my opinion. There's no privacy issue. And the list of questions is not a comprehensive one. Nor is there a way to say "dude, you didn't ANSWER THE QUESTION"... which was the case with one loan I looked at today (the person didn't answer the canned question that another lender had already posted). 189

[Orionizer]

Originally Posted by Onomatopoeia

I use the trading platform exclusively. Let me know if you have any questions.

How exactly does it work? Do you have to buy out an entire note? If so, I'm not in any kind of position financially to do that... 190

[Baracus]

Originally Posted by Mama Zappa

For example I've got a couple that are good rates (B or C class) and the borrower's credit score has improved since the initial loan, and stayed at the improved level. I'd assume those would be more appealing and I might sell them for a little more than the loan balance?

Personally I won't buy anything marked up more than say 0.5%. If you pay a premium for a loan and it pays off early, you can end up with a negative return. And which borrowers are most likely to pay off early? Those whose credit has improved. If you wait you can always find an equally good loan at a discount instead, so there is no point in paying a premium. 191

[Onomatopoeia]

Originally Posted by Mama Zappa

Oooh - I do, I do!

Since I'm in a state where I can invest directly, I do so. But if I were to wish to liquidate some loans, what sort of things do you look at when deciding what to purchase?

For example I've got a couple that are good rates (B or C class) and the borrower's credit score has improved since the initial loan, and stayed at the improved level. I'd assume those would be more appealing and I might sell them for a little more than the loan balance?

What I, personally, look for first is the mark up/mark down. I try to purchase all notes at a mark down. The larger the mark down, the more attractive it is to me. I will purchase a note with up to a .75 mark up, but it has to be at a high interest rate to be attractive to me as in the short term I'll be taking a loss.

If I were selling, yeah, I'd try to get a little mark up. You can't go too crazy though, because the note will just sit there unsold if the mark up is too high. 192

[Onomatopoeia]

Originally Posted by Orionizer

How exactly does it work? Do you have to buy out an entire note? If so, I'm not in any kind of position financially to do that...

Just like the main Lending Club, you're purchasing fragments of loans, not entire loans.

You have a little more flexibility on the trading platform as notes are made available for just about any amount. For example, I paid $9.85 for one of my notes. It happened to have a pretty decent discount of (1.63%). 193

[Onomatopoeia]

Missed the edit window.

I also purchased a note for $97.20, which also had a decent discount. It depends on what you want.

I also only purchase notes for which at least 5 payments have been made and all payments have been made on time. There's a 'Never Late' filter in the search function. I don't really pay attention to the credit scores, unless there was a precipitous drop in the last 30 days. I'll purchase a note for someone who's made 15 payments and has never paid late even if their credit rating isn't the best.

Another advantage of the trading platform is because you're purchasing existing loan notes, you don't have to wait for the loan to fund. As soon as you plunk down your cash, the note is yours, and you begin earning interest on it from that day, although you may not see it in your list of notes for 24 hours or so. No waiting days for the loan you're interested in ultimately gets funded, and no chance for it not to be, and therefore, no chance of your funding attempt to ultimately be a waste of time. 194

[Onomatopoeia]

A big advantage of the trading platform is because any loan note you've just purchased has been accruing interest charges since the last payment was made to the previous note holder, on the next payment you receive all the interest accrued since the last payment, not just since you've owned the note. For example, say someone holds a loan note with payments due March 1 and April 1. March 1 comes and the holder receives his payment, including interest. He then decides he doesn't want the note anymore and places it on the market on March 20. You then come along, see it on the market and decide to purchase it on March 25. Although the previous note holder owned it from March 1 to March 25, because you purchased it before the next scheduled payment on April 1, when the payment is made, all the accrued interest gets paid to you; none to the previous note holder.

Another advantage of course is you can ostensibly purchase a loan note that has a scheduled payment of 2 days from now, thereby allowing you to realize revenue almost immediately after purchasing the note. This happened to me on one of the first notes I purchased. I was surprised to see available cash and accrued interest in my account a few days after I 'spent' all my available funds. 195

[Onomatopoeia]

Originally Posted by Onomatopoeia

Another advantage of the trading platform is because you're purchasing existing loan notes, you don't have to wait for the loan to fund. As soon as you plunk down your cash, the note is yours, and you begin earning interest on it from that day, although you may not see it in your list of notes for 24 hours or so. No waiting days for the loan you're interested in ultimately gets funded, and no chance for it not to be, and therefore, no chance of your funding attempt to ultimately be a waste of time.

The bolded, highlighted part above is incorrect. You actually begin earning interest from the last payment date, whether you owned it or not. 196

[Onomatopoeia]

Monthly Journal Note

Join date: 10/15/2010
Investment to date: $750
Payments to date: $168.81
Interest to date: $29.47
Notes currently held: 28
Current Net Annualized Return: 11.41% 197

[amarone]

Well, the money has begun pouring in. Seven loans have made their first payment giving me a grand total of $4.41 in receipts so far. Two of these seven borrowers have had a reduction in their credit score, falling two bands. One has improved their score by one band. Does the very act of taking out a loan tend to cause a credit score reduction, or have I probably picked a couple of lemons? 198

[Mama Zappa]

Originally Posted by amarone

Well, the money has begun pouring in. Seven loans have made their first payment giving me a grand total of $4.41 in receipts so far. Two of these seven borrowers have had a reduction in their credit score, falling two bands. One has improved their score by one band. Does the very act of taking out a loan tend to cause a credit score reduction, or have I probably picked a couple of lemons?

There might well be a ding as a result of a hard credit inquiry. That shouldn't cause a big enough drop to make it fall two bands, unless they've got other stuff going on.

I have a few that have dropped 3-4 bands total; I'm watching those pretty carefully! But unless it falls over multiple months in a row I figure that it's mostly normal fluctuations. 199

[Mama Zappa]

Oh - and they've added a lot more "canned" questions to the list of questions you can ask borrowers. 200