Man why can’t lending club be more like some stock exchanges where it takes one day to transfer funds… I mean it gives me a lot of time to look at the trading platform and the note platform, unfortunately I did all my research in advance.
For those interested in joining, I would signup start the transfer and research, it gives you enough time to cancel the transfer if you decide against using the program and as far as I can tell, there isn’t a fee to cancel or withdrawal. However, if someone would like to cite differently I would appreciate it.
This will beat sitting here idling and looking at things you want to invest in, but can’t because their investment system lags 4 days… I did mine on a Wed so hopefully tomorrow I can take a stab at some notes.
When I first signed on, you could do the initial transfer (and additional transfers as well) using Paypal. IIRC, once I added a bank account, I couldn’t do Paypal any more. I think that now, you can only do the Paypal for the initial funding and there’s a minimum of more than 25 dollars. Haven’t looked at the rules lately. But yeah, the lag is annoying.
I actually popped in to ask if anyone has figured out a way to find information on older loans and how they’re doing. To look at my own stuff, I can click the link on my Loans listing on Lending Club, but if it’s something I’ve sold, that’s no longer there. And once it’s aged out of “this month” on FolioFn, you no longer have that link either.
I’ve made a point of capturing all the URLs for my current loans; you can reconstruct them using the loan, note and trade ID from when you purchased them. I assume you can still get to those later even if the loan’s gone from your portfolio - will know for sure next month.
But, stuff I sold in September is G.O.N.E. Gone. Not that it officially matters to me, but I’m often curious to find out whether those loans are still performing (one, I sold as it was entering the grace period, it had gone 15-30 late by the time the month ended).
A quick status update on how I’ve been doing with more aggressive selling-off: I’m now making a point of listing pretty much every note I buy at a markup equivalent to the past month’s interest times 3, plus enough to cover the fee. So if the loan balance is 21.00 and last month’s interest was 23 cents, I’ll list it at 21 + (.23 * 3), or 21.00 + 69, plus 22 cents for the sales fee - or a total of 21.91.
Such loans aren’t getting snapped up, but enough sell that I’m keeping on with that experiment.
Older loans with less principal are selling faster despite this being much less of a bargain. I’ve unloaded pretty much all my oldest stuff, often for a profit (for me) that guarantees a loss (for the buyer). Still scratching my head over those.
I’m entering all my sales into Quicken as stock sales, with the “number of shares” equal to the “outsanding principal”, and looking at this month’s sales I’m seeing prices equivalent to 1.02 to 1.09 per share - as in, 2 to 9% profit in a single month (admittedly, on only a few dollars).
It’s hard to say what my rate of return is. LC’s page still lists it as just under 9%, Quicken (if I subtotal by month) shows some truly screwy stuff like September having a 41% loss vs July (where I sold nothing) having a 100% gain. I think it’s got to do with the vagaries of the “per share price” resulting from selling notes, or timing of when I record purchases / interest / repayment (I aggregate them all for the month and list them as being bought / repaid on the last day). The only two months where I should see a loss are the months where my two defaults were recorded.
When I subtotal by quarter it evens out quite a bit - the July-September period shows a 10% return.
I was thinking about doing something like this, but wanted to do the investing part for a little bit before I gave a go at the FOLIO side. GL on your experiment
So if I understand your question correctly, you’re just missing the note/loan/order numbers for your September notes?
If you go to your FolioFN “My Account” page, clear at the bottom of all your trades is a section with links to your Trading Statements for each month. The first important field is the “Transaction ID”. I do not know that this is. That’s why it’s important. grin It’s not the order_id, I know that much.
But then to the right you’ll see “Trade: Sell Note:123456”. That’s your note_id. Now all you need is your loan_id and you’re set for keeping tabs on the note.
Unfortunately I looked and looked tonight and did not find a way for a normal person to get that number. There is a hidden field in that html which appears to be a time field, but other than that, nothing.
So I have thrown together a quick-and-dirty tool for you to use which grabs the ID numbers you’re looking for, as well as payment history if my system has it.
You sound like a .csv person so I put in a deal there where you can paste in all the note_ids’s listed on your Trading Statement and it’ll dump a csv containing all the information you need to recreate the links like you are now capturing.
I believe you will also enjoy the convenience of seeing the most recent payment history (if available for the loan) without having to search through the LC site for the corresponding loan_id.
There’s still a lot of info in there that doesn’t need to be public so I’ll be paring it down when I have time. Just mentioning that so you don’t wonder why there are cryptic notations here and there.
How do you track the payments received (if any)? And why only the outstanding principal, when you paid for the accrued interest? Or… are these only sales in which you were originally an investor? Just trying to understand, because I don’t see any quick-and-easy way to track such things without figuring an accurate cost basis.
Oh, and while I’m here:
The LC secondary market is officially borked, or at least has been for the past month. I’m being routinely left stuck with notes that don’t sell at -5% at times when all they have wrong with them is one payment in the grace period. I’m not aware of anything cyclical that would cause October to be bad, but this is bad. There are several pages of no-late notes available at more than 1% discount, which is unusual. A nontrivial percentage of those are mine. Aw well.
Huh - I’ve actually had quite a few notes sell in October, all at a profit.
Payments received to date: Those get lumped into my regular monthly Lending Club accrual - I take the end-of-month statement and enter all the interest paid across all loans as a single entry, ditto principal repaid. So if I have 100 notes, and each paid 10 cents in interest and each had 70 cents repaid principal, I’ll have an entry recording 10.00 in interest, and an entry recording 70.00 in sales (minus 80 cents fees, or whatever the total fees are).
Then when a note sells, let’s say its balance is 22.00 plus 10 cents accrued interest, and I sell it at 23.00. I net 22.77 because of the 23 cent fee. My profit on the sale is .77. Whether I record that as a cost basis of 22.00 (the outstanding principal) plus a gain of 77 cents, or 10 cents interest, cost basis 22.10, and 67 cents capital gain, the net income from the loan that month is still 77 cents.
The only real difference from a tax standpoint is if I’ve held the loan for more than a year, that pushes the gain from short to long-term, and the tax hit is lower. Since my loans are all low-value (25 or rarely 50 dollars), we’re talking a maximum difference of 10 cents per loan in taxes owed. Figure 25% of 10 cents plus 15% of 67 cents, vs 15% of 77 cents.
The prior repayments / interest (3 dollars plus interest) are already handled by the monthly total method for my LC loans, so aren’t an issue.
I did, by the way, finally stumble on how to get the order number information - turns out Lending Club has an “orders history” page which for some reason I’d never checked before. While it’s not easy to figure out out since the order number is the only thing that displays there, I was able to click on orders with dates around the time my loans were issued, and find the details that way. I updated my spreadsheet and now I can track even sold loans (speaking of which, one I sold as it was just going into grace period: 31-120 dates late now. Ouch on behalf of the purchaser).
As have I. I guess the difference is if I don’t get $3k then it doesn’t even pay my living expenses and it $hurts, big time. I can’t just shrug that off “ohh well, only 1k this month” too many months in a row.
Thanks! I’m still mostly a buy-and-hold person - I will not purchase a loan I’m not willing to do that with. If I wind up able to sell it for a short-term profit, cool, but the ongoing income is good too.
My sales are going to slow down now since most of my older notes have gone (mostly for a profit) and the newer ones aren’t selling as quickly.
I did figure out a big part of why my returns (per Quicken) were so screwy. It was calculating month-end balances based on the “per-share” price - which was skewed by the sales. If I had 1000 dollars in principal one month, but had sold a note mid-month for a 5% profit, it would calculate my portfolio value as 1.05*1000, or 1050. Causing that month’s profits to seem high and the next one’s to seem low.
Mamma Zappa, I am going to refer to a post of yours from a long time ago I think it was the beginning of this thread. You stated that one of your borrowers credit dropped a bit and assumed it was because of the new loan. Later you posted you were having trouble with that borrower. Did you ever find a way to see why their credit dropped? I am curious because I just noticed my C rated borrower just drop from the 680-684 bracket to the 675-680 bracket. Not a huge drop, but I am curious to know why.
I don’t honestly know, though of course everyone’s credit bounces around a fair bit. A 10 point drop is barely worth noticing, unless the next month it’s another 10 points or so.
That’s one disadvantage, if you will, to the newer credit score information - Something that showed as a drop before was usually more significant - e.g. 760 to 720 - vs. now you see that down arrow and it could be 5 points which is of zero concern.
As far as whatever loan I was mentioning: no, we don’t have any way of finding out why their credit drops unless we see behavior directly affecting our loans - e.g. a late payment or a bankruptcy filing.
If you see a loan drop a lot, you know something is going on with the borrower. Could be significant, could be nothing, but you could take it as a nudge that you might want to sell the loan. I don’t honestly recall the note I was referencing. It may have been one of the two I’ve had go bad.
Depends on what you want to do with them, tracking-wise, I guess. When I first set things up, I tried entering every single purchase at the time it happened, but that’s of limited benefit unless you’re doing nothing but buying and selling and really want to treat it as a stock, for capital gains purposes.
If you’re just buying, holding, and need to record interest, I ran across the suggestion to just aggregate everything monthly. So for example if I purchase 4 new loans, have received 31.00 in repayments, 6.00 of that is interest (so 25.00 in principal) and 38 cents in fees, I would record it as follows, as of the last day of that month:
Bought: 100 shares at 1.00 each.
Sold: 25 shares at 1.00 each, with a 38 cent commission
Interest Income: 6.00 to the account’s cash balance.
If I had 90 dollars in cash in the account on the first of the month, my ending cash balance should be 90 + 25 + 6 - 100 - .38, or 20.62 (if my arithmetic is correct).
At the end of the calendar year, then I just add up those interest figures and net them out (subtract fees). So my income for the year would be (6 - .32) * 12.
To set this up in your Quicken account, just pick a point at some point in the past, say last December 31, and enter a purchase for whatever number of shares your LC statement said it had in principal, and enter a cash-in transaction for whatever amount of cash LC said it had. Then enter monthly transactions as above to get up to date.
If you’re going to be doing a lot of selling, and want Quicken to do your capital gains calculations accurately, this approach will skew your capital gains figures. You have to tell Quicken to either record sales as specific lots, or as average cost. The latter is a lot easier, because it works well with the monthly aggregate approach, however I don’t know the IRS rules regarding aggregating a single stock (vs. a mutual fund).
If you use the average-cost method when recording a sale, it looks like Quicken puts a “purchase date” in its records of the earliest stock purchase until those shares are all sold, then goes for the next purchase date, etc.
Since I have sold a lot this year, I’ve got about 40+ “capital gains” transactions to record. I’m going to have to manually do that crunching to correctly sort them out for capital gains purposes. I suppose I could try changing Quicken to do specific lots, but I’m not sure how that would affect the regular monthly repayments.
In a “perfect” world, you could record every single purchase as it happens, and every single repayment as it happens, and tie those repayments to the correct initial purchase date. And in a perfect world, Quicken could calculate the OID figures based on that data (OID is what LC sends if you have a single loan that returns more than 10 dollars). If you’ve got more than 3 loans, this becomes impossible to manage. Hence my aggregation approach.
Mama Zappa, Thanks for getting back to me. Yes the 10 point drop isn’t a huge deal it just brought to mind to start watching that note to see what else happens. It did bring to mind to see if there was a way to check it out. Oh well, it happens. Thanks for the information.
The aggregation approach is probably fine for your purposes. IRS doesn’t know or care whether you got 36 payments of 20 cents each, or 7.20 total. With such a small portfolio it’s certainly feasible for you to report each repayment at the time it happens (you’d need to report a sale, and interest income, for each repayment). If your portfolio gets bigger, it becomes too onerous.
IRS has guidance on reporting investment income, and there’s something in there about bad debts:
I’m interested to see how FolioFn reports sold notes - there is a statement saying they will issue a tax document. Has anyone here sold anything in 2011 or earlier, and can tell us what the document looked like?
While my approach (subtracting it from total income for the year) may not strictly be kosher, the net result is the same. If I had a lot of losses and they exceeded the income, that might be a different story.
Hey guys, I’m at the point where I’m receiving, on average, a payment of approximately $25 per day. Up to now, I’ve been rolling everything back in to new notes, but I have a question.
Say I wanted to take a portion of my available cash and transfer it back into my bank account twice a week. Does LC charge a fee for this, or can I transfer for free as often as I want? I could probably just look this up, but it’s quicker to simply ask here. What? Lazy? Me?
Actually I have never been able to locate any mention of withdrawal fees for electronic anywhere on the site. I assume this means there aren’t any fees for reasonable withdrawals, and I’ve never heard of anyone being charged a fee for an ACH withdrawal. Asking for $2/day, on the other hand, might be considered abusive.
For what it’s worth, competitor Prosper does not charge any fees but if the amount is below $25 you can only do that once per month.
I did some searching around to make sure I was correct. The ACH is suppose to be free, however, if you want a check sent to you, it will cost you $15 per check. I feel having a check sent to you is one heck of a ripoff, if they still offer that. Wire transfers are just plain old expensive and will never change. Let us know if they give any complications with withdrawing multiple times per week.
CRAP!!! Blew an entire month’s profit in 2 seconds.
I had a new note. 25.00. Tried to list it at 26.01.
Typed 16.01.
Hit submit - saw what I had done, tried to change, and it was GONE. Dammit.
Clearly there’s some kind of automated tool in use. Core_dump, how do you do your query that you listed a while back? I don’t know of any way to easily access the entire for-sale portfolio, and I have to guess that LC or FolioFn must have something in place to nab such stuff.
Oh - and when I called FolioFn, they said they have no transparency and I had to call Lending Club. I called Lending Club and nope, no way to cancel. Egad. 2 seconds.
