Category | Lending Club

If you are like me and follow more than one strategy for picking loans, it really helps to categorize your loans on Lending Club into named portfolios. The biggest advantage being that Lending Club will independently report how each portfolio is performing. If you aren't familiar with this feature, look carefully at the page displayed after placing an order for a loan. There is a box that allows you to categorize the loans just

I am happy to announce that the Smart Peer Lending Loan Recommendations Newsletter is now available. Each morning our loan recommendations engine scans the new loans open for new investment on Lending Club and passes them through our proprietary selection criteria. Loans that pass are emailed out to subscribers in a format that makes investing simple and fast. Its the same information presented on our Recommendations pages. But each Newsletter includes

In the last post of this series ( Improving Investment Returns Using Default Prediction ) we saw how a very simple strategy (investing in every high interest rate loan) combined with our default prediction algorithm yields pretty good returns. But how does this compare to a more sophisticated strategy guided by common sense and manual tuning? This post will investigate one specific example. The Challenger

Over the course of investigating Lending Club I discovered several people sharing their personal investment strategies. But there wasn't a single place that pulled this information together to make comparisons easier. This is my attempt. I've tried to represent each one as closely to the original posting as possible. But I did need to make some slight tweaks to get it into the table. Blank cells indicate that this attribute

The goal of this post is to describe some of the calculations and assumptions that went into the making of the Lending Club Stats page found here ( Lending Club Stats ) What Loans Are Included In The Analysis? As noted in earlier posts, one of the issues with computing an accurate return value for loans on Lending Club is the large

An award winner in the field of peer to peer lending, Lending Club has granted $300 million in personal loans and yielded an average return of 25% since its origin in 2007. This online platform, the leader in both investing in and obtaining personal loans, broke monthly records by issuing $20 million in loans during June 2011. This represents a 7% increase since May 2011 and double the volume of one

Diversification is a process of reducing risk by investing in a variety of different assets.  A well diversified portfolio contains assets whose prices move independently. Therefore, the overall portfolio has lower volatility and more predictable returns. Lending Club makes diversifying your loan portfolio easy by allowing investments of as little as $25 per loan. So even a small portfolio can afford to buy a sizable number of loans. With just $5,000 to invest you could construct

Before attempting to develop a strategy for picking loans, I thought it would be worthwhile to see how an uninformed investor would do if they stumbled into Lending Club and invested at random. To see what the return would be, I wrote a simulation that randomly picks 100 loans out of the pool of full term loans described in my post on Lending Club Defaults rate here .

According to the LendingClub website, as of March 4, 2011, 82% of investors with 100 loans or more have Net Annualized Returns between 6% and 18%. Referring to the graph on their statistics page ( found here ) the average looks to be around 8%. An 8% return sounds really good. But how exactly do they calculate this number? Fortunately they tell us

Tell anyone that you are investing in Lending Club and the first question will almost always be "how many loans default?" . Lending Club is mostly quiet on this data because they would rather have you focus on total return. And that is the right way to look at it. But that doesn't stop potential investors from wondering. So here is my quick investigation into the subject.

One of the more interesting aspects of Lending Club is the availability of rich historical and current loan data. They make this data available as CSV files on their website at the following location ( Lending Club Historical Data ). These files contain details on every loan processed including the current loan status (Current, Late, Fully Paid, etc.), purpose, credit score of the borrower, payment details, etc. In the hopes of better