Category | Loan Calculations

Every method that computes ROI on a loan portfolio must decide how it deals with loans that have not run to completion (fully paid or charged off). One approach popularized by lendstats.com is to use the current status of a loan to estimate how much of the outstanding balance will get paid off. The logic being that the later a loan is currently the more likely the borrower will

Spend any time discussing peer-peer lending and it quickly becomes apparent that there are many different ways people represent their returns. In a previous post I took a quick look at the way Lending Club's Net Annualized Return is calculated. But this method is specific to Lending Club and can be tricky to compute with loan defaults. Using NAR also makes it hard to compare your peer-to-peer lending portfolio

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