Lending Club Strategy Challenge

In my 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 crafted through a lot of tuning and back testing? This post will look at one specific example.

Used on its own, our default prediction algorithm has been shown to perform better than one of the best publicly available strategies today. But used in combination with a really good manually developed filter the real power emerges. And the result is an ROI that is quite possibly better than anything else out there.

If you think your strategy can do better, test it out by doing the following.

  • Start from our loan search page. Search Loans (free registration required)
  • Enter your filtering parameters. Leave Issued Date and Status blank.
  • Enter an "Age Min" value of 75
  • Click Submit

If you get a Projected ROI > 10% I'd love to hear from you. Copy and paste the filter description and results into a comment below and let us know. I'll be organizing, verifying and publishing all the best submissions in a later post.

Leave a Comment

Your email address will not be published. Required fields are marked *
Comments are moderated and will not be displayed until approved.