The exact calculation is (total remaining principal of notes charged off in the month)/(adjusted value of all my notes as reported by LC at the beginning of that month).
Thanks for explanation. I assume you can get that info from the monthly statements. I’ll take a look this weekend and see what numbers I come up with. I do put failing ones on Folio so I’m not sure how to factor in those that do sell at a loss. Any ideas on that? (not that many sell but some people do buy them from time to time)
I update the balance once a month in Quicken, so that is what I reference. I enter one transaction to sell “Lending Club” (a security I made up that has a value of $1 per share) for $0 and the number of shares is the dollar value of the capital lost on charged-off notes that month. I then look at the current value of my LC “shares” and add a transaction for interest that brings the total up to that reported by LC on their site, and buy more “shares” of LC at $1 each.
Example, I have a value of $10,000. LC reports a value of $10,080. The sum of the capital lost on charge-offs is $100. I enter:
Sale of 100 shares of LC for $0 each.
Interest received of $180, reinvested by buying $180 shares at $1 each.
If I sold any on Folio, I would add a sale transaction for those. Let us say I had a note with $10 capital left to be paid off and sold it for $8. I would enter a sale of 10 shares of LC for 80 cents each. This would lower the value of my portfolio by $2.
I’ve had a lot of defaults lately. Bear in mind, I’m small potatoes (total account balance about 3K), but right now I have 2 in grace period, 1 in default, 1 in 15-30 days late, and 5 in 31+ days late.
Plus: 12 total defaulted, 6 of which are this calendar year. 3 last year, one in 2015, and 1 each in 2010 and 2011.
I’ve turned off automatic investing, and am attempting to sell notes but as everyone knows that can take forever.
I’m guessing some of this is my own fault for putting it on autopilot and not monitoring things carefully, but I think LC’s underwriting and vetting must be messed up as well.
We’re not the only ones who have noticed the increase in failures:
6 months have gone by since I decided to ‘leave the club’, here is a status update and some random musings:
- My ‘balance’ has gone down about 25%, I’ve been siphoning off the loan payments on a weekly basis.
- LC reached out to me via some bland survey to inquire as why was I transferring money out. Told the truth; I basically don’t trust them any more. Not that they’ll ‘steal my money’, of course, but that their goals are no longer aligned with mine and I see some decision making that is definitely contrary to the interests of the members of the club.
- LC, as a stock, continues to tank. I see the Fintech pimps are still out in force hyping the P2P lending model but the results and outcomes are pretty obvious to everyone - investors in the notes and stock are getting screwed.
- This week LC indicated they were no longer originating F and G notes. I suspect that default rates were soaring and institutions AND individuals wanted no part of this tranche. Full disclosure - these notes supposedly provided good overall returns but given that I get unhappy with 7% defaults for B and C notes, there was no way I’d go even further into the sub-primes.
- I did get one question from a lurker about where I was putting the LC money and to be transparent, I am not putting it into Prosper or any other crowdfunding kind of platform. A vanilla index ETF is sufficient and has been far more profitable, tax efficient, AND less risk.
- The UI for LC continues to annoy me, lots of funky design decisions that make it hard to get to the information you want. And, no, having to download old statements and manually search/review transactions is not sufficient in the 21st century.
I’ll probably still be on LC for another 4+ years, hope to recover initial investment in another 18 months or so. Really hoping they last that long.
Thanks for the update, gregorit. I started getting out 18 months ago, withdrawing cash monthly. I have got nearly 80% out. I only did 3-year loans, so I will not have to wait as long as you.
Nobody at LC has reached out to me to find out why I am exiting.
I stopped investing so I’m still in the $7500 range but I am still buying new notes as the money comes available. Still more going south but I am still making money. I only buy B notes now.
I’ve quit reinvesting - which reminds me, I have some cash accruing there that I need to siphon off. I’ve had something like 14 defaults in the past 12 months, which is insane.
Last month was the first month I’ve taken a loss in…oh, I dunno, years.
It is still making money, just not as much. From my Nov statement: Total $7840. Year to date interest minus losses = $667. I have had $175 in charged off loans so it would be nice to have that extra $175. However, that $667 on $7840 still isn’t bad.
I am seeing more going late though.
I lost money this month, not for the first time. Charge-offs were nearly 3% of my portfolio. According to Quicken, my return for 2017 was 0.27% Lending Club continues to claim that my annualized return is over 5%
I had 14 charge off last year. I have 5 in 30-120-days-late status which I presume will charge off soon. Another one in 15-30 days late (but that was paid late at least once before).
I think most of these are ones that were picked via the automated investing.
I had 109 
Ouch!!
What percentage of your total loans would that be? I’m small potatoes, so that 14 works out to a bit over 10% of my holdings.
I cannot find out easily. I have 364 currently, but a fair number will also have been paid off during the year, so I do not know the total. I suppose as I only did 3-year loans and have not invested for a while, one third of my loans would pay off during the year (less charge-offs). The maximum loans I would have had at the start of the year would be (364 + 109) * 3/2 = 710, hence over 15% have defaulted.
I’ve made several loans on Kiva but the most recent is 4 months late in repayment. To my knowledge, there is no recourse.
I’m still in LC but I stopped adding new funds long ago - just reinvesting as I go. However, the last few days, there hasn’t been anything to reinvest in (I still do manual buying of notes). This morning, there were a whopping 6 notes available…total. That’s without any filtering. 6 for everyone on LC to nab. I’ve seen it get bad before, but not like this. I wonder what’s up?
I just logged in and, without filtering, I see 76 available.
Yep, I see 69 now. The amount goes up and down. However, while 70 is better than 6, it’s still not very many.