Anyone else noticing more late payments on Lending Club since the bad publicity?

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kiddoc
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Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by kiddoc »

During my first year in P2P investing, there were sporadic notes going in and out of Grace period and a rare late payment. I was achieving an after-tax rate of return of 7-8%. It seems like the rate of late payments has really accelerated after the recent adverse publicity. Has anyone else noticed the same? Maybe borrowers sense the instability and recent turmoil and are testing the waters to see if they can simply wait it out till Lending Club fails. Maybe this is what happens to everyone over time as the notes mature. I understand that higher returns = risk. I am wondering is if the recent news reports have accelerated the risk.

Disclaimer: I read several threads about the reasons/ lack thereof for P2P investment in a Boglehead portfolio. I am still in my 2 year "dabbling" phase where I put a reasonably small amount into a taxable account before I commit fully to an asset class. I do not think I will put more into P2P but the experience has been quite educational so far. I still have a positive rate of return. FWIW, my small account "beat the market". :sharebeer
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton
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Phineas J. Whoopee
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by Phineas J. Whoopee »

Which market did it beat? Low-quality fixed income? If not, they aren't directly comparable.
PJW
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kiddoc
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by kiddoc »

Phineas J. Whoopee wrote:Which market did it beat? Low-quality fixed income? If not, they aren't directly comparable.
PJW
It was not my intent to compare the two or to say P2P is superior in any way. Tongue in cheek, I was using the language the "advisors" use to qualify their investments. I use the US total stock market return and the 3 fund portfolio to benchmark my long term returns. I agree my small account in P2P is not comparable to either of these.
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton
Jack FFR1846
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by Jack FFR1846 »

Out of my 5 notes, 1 paid off, 1 has been in grace period twice. I'm pulling money out as I am able. Mainly just because my experiment with P2P has yielded meaningful results.
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chrisjul
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by chrisjul »

No, I have not noticed that, but I don't have the data to know.

I am very happy with my investment in Lending Club and have added money (again) this year. I also moved more into the C level loaning from primarily B.

Happy with the results also.
mindboggling
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by mindboggling »

I have thirty 25-dollar loans split 50-50 between A and B ratings. One has just entered the grace period and one was paid-off early. I am gradually getting out of P2P mostly just for simplicity's sake.

steve
In broken mathematics, We estimate our prize, --Emily Dickinson
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White Coat Investor
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by White Coat Investor »

Returns generally drop a bit in the second year as defaults climb. Not sure yet what effect the recent publicity has had on note payors and the note holders.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
chrisjul
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by chrisjul »

I have been investing in Lendingclub making only $25 loans at a time.

I have made a total of 515 loans with only 11 defaults in 3 years, a rate of about 2.1% (much lower than Lending Club projected).

My adjusted net annualized return is currently 8.22% (adjusted for any late or overdue payments). I do not automate my loan selection but choose myself and am about 50/50 between B and C loans.

I have been very pleased with this investment and actually enjoy selecting the loans to make. I don't loan for vacations, and don't loan to anyone with ANY defaults, and I don't like large loan consolidation loans. I like home improvement loans, etc. You can filter all loan selection by the factors that are important to you. I like for the borrower to be a homeowner, for example and to have a full time job with a work history, etc.
kosomoto
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by kosomoto »

I have a negative return with 100+ notes. Late payments and defaults have sped up in the past six months. I also need to pay taxes on my interest even though my overall return is negative. I am done and liquidating.
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kiddoc
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by kiddoc »

Hmm... the consensus seems to be worsening returns as an account matures. This is one of the major reasons I have stopped putting in new money. I am glad my IPS had a "dabble in" period for any new asset class.
Sequence of P2P returns, annualized, almost seems like:
:moneybag :moneybag :moneybag
:moneybag :moneybag
:moneybag
:confused
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton
veggivet
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Re: Anyone else noticing more late payments on Lending Club since the bad publicity?

Post by veggivet »

I haven't noticed any difference in loans going into grace period or going late recently. I hold two accounts at LC, one taxable, and one retirement account. At this point, I am just letting the loans mature while siphoning off the cash as it builds up and not adding any new funds.
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