Lending Club Investing: Good Passive Income Source? (Answer: NO)

[MJ DeMarco]

amazing huh guys..a new avenue/tool is offered to us outside the regular banking system. You take action with some money/investment...and same ole corrupt wall st shit happens. unreal

This is why I feel bit-coin doesn't solve the human problem. Get enough humans together and corruption won't be far behind.

 

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[greyman]

I've been using LC for about three years now. I've got ~150k invested in their platform and have averaged about a 10.5% annualized return over that period. I'm pretty strict about my filtering (no defaults in the past 36 months, credit score minimum, only doing debt consolidations) and it's worked out pretty well for me. The only downside is that it's taxed as ordinary income, but I'm still a fan of it in terms of diversification.

I bought heavily into this weeks dip in their stock.

 

[leavingslowlane]

ive been using prosper for over 4 years and have gotten a 10.5% return. pretty good, not outstanding. im currently looking for other places to put my money that can get me something a little higher.

 

[Mineralogic]

I've been using LC for about three years now. I've got ~150k invested in their platform and have averaged about a 10.5% annualized return over that period. I'm pretty strict about my filtering (no defaults in the past 36 months, credit score minimum, only doing debt consolidations) and it's worked out pretty well for me. The only downside is that it's taxed as ordinary income, but I'm still a fan of it in terms of diversification.

I bought heavily into this weeks dip in their stock.

stock shows no indication of a bottom pattern yet

 

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[Captain Jack]

I've been using LC for about three years now. I've got ~150k invested in their platform and have averaged about a 10.5% annualized return over that period. I'm pretty strict about my filtering (no defaults in the past 36 months, credit score minimum, only doing debt consolidations) and it's worked out pretty well for me. The only downside is that it's taxed as ordinary income, but I'm still a fan of it in terms of diversification.

I bought heavily into this weeks dip in their stock.

The only bad part about this is that we don't know if what they're telling us is actually true. Do these people really have no defaults in the past 36 months? The revelations uncovered this week put those statistics in doubt.

I've been in LC for 1 year and have way less invested than you do. I agree that it has given me some good returns, but I also believe that the recent disclosure is just the tip of the iceberg. I'm slowly pulling my money out of it.

Just my 2 cents.

 

[greyman]

The only bad part about this is that we don't know if what they're telling us is actually true. Do these people really have no defaults in the past 36 months? The revelations uncovered this week put those statistics in doubt.

I've been in LC for 1 year and have way less invested than you do. I agree that it has given me some good returns, but I also believe that the recent disclosure is just the tip of the iceberg. I'm slowly pulling my money out of it.

Just my 2 cents.

I definitely share your concerns about the quality standards of the notes, and we'll have to see if the issues that have surfaced in the last few weeks are systemic or were localized to that one large investor. Fingers crossed. I'm still bullish on them long term.

 

[Captain Jack]

I definitely share your concerns about the quality standards of the notes, and we'll have to see if the issues that have surfaced in the last few weeks are systemic or were localized to that one large investor. Fingers crossed. I'm still bullish on them long term.

True and it's not like we could just take our money out.

That's one of the things I'm realizing I don't like about this: terrible liquidity.

I don't have a ton of my savings invested in this, but if a situation came up where I absolutely needed this money, I'd have to wait 3 years to have all of it. Not so great.

 

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[greyman]

True and it's not like we could just take our money out.

That's one of the things I'm realizing I don't like about this: terrible liquidity.

I don't have a ton of my savings invested in this, but if a situation came up where I absolutely needed this money, I'd have to wait 3 years to have all of it. Not so great.

You can still unload your notes on their secondary market if you really needed the liquidity.

 

[Captain Jack]

You can still unload your notes on their secondary market if you really needed the liquidity.

Interesting. I didn't know that this option existed. Good info.

 

[Bobby-H]

Yep, the secondary market is nice. Using lending robot lets me put notes up for sale that automatically scale with discount. Right now I'm experimenting with selling grace period and late ones and seeing the market for those.

 

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[MJ DeMarco]

we'll have to see if the issues that have surfaced in the last few weeks are systemic or were localized to that one large investor

What bothers me is the dishonesty. To what extent does it go?

You can still unload your notes on their secondary market if you really needed the liquidity.

If there is a massive recession and LC note holders have to sell for liquidity, this will be a HUGE opportunity for buyers to buy discounted notes. When there's a liquidity push, buyers will get all kinds of assets on the cheap.

 

[GuestUser450]

What bothers me is the dishonesty.

When startups are funded to the teeth and incentivized/threatened to grow at all costs, it seems they can rationalize anything.

Ironic and hypocritical that the valley is so slow on the uptake with normal business operations too. Laplanche at LC, Conrad at Zenefits, Lefkofsky & Mason at Groupon, etc. Lack of fundamentals + manic pursuit of disruption = bad time.

 

[Bobby-H]

Here is what Lending Robot sent out the day of the LC CEO ousting-take what you want from it:


"Dear client,

You may have heard the news that Lending Club’s CEO Renaud Laplanche was forced to resign this morning, following the discovery of an improper sale of loans to an institutional investor.

Here’s the impact for individual investors in general, and LendingRobot clients in particular: zero.

That deal concerns institutional investors, and sadly illustrates the risks of dealing with ‘packages’ of loans rather than managing portfolios on a loan-per-loan basis. In addition, the underwriting of the loans themselves is not in question, only that the package of loans sold did not match the investor's investment criteria. No money was embezzled.

By using LendingRobot, you have access to individual loans, not opaque bundles. Furthermore, Lending Club assets are held by an independent third party, a qualified custodian, which means they can’t misrepresent the notes and cash in your account.

Today, like it happened yesterday and will happen again tomorrow, hundreds of thousands of borrowers will make a payment towards their Lending Club loans, some of them trickling down to your account as they should. It has nothing to do with the Lending Club stock price, and we still have the utmost trust in the management of this company.

Steady returns,
The LendingRobot Team"

 

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[Captain Jack]

Here is what Lending Robot sent out the day of the LC CEO ousting-take what you want from it:


"Dear client,

You may have heard the news that Lending Club’s CEO Renaud Laplanche was forced to resign this morning, following the discovery of an improper sale of loans to an institutional investor.

Here’s the impact for individual investors in general, and LendingRobot clients in particular: zero.

That deal concerns institutional investors, and sadly illustrates the risks of dealing with ‘packages’ of loans rather than managing portfolios on a loan-per-loan basis. In addition, the underwriting of the loans themselves is not in question, only that the package of loans sold did not match the investor's investment criteria. No money was embezzled.

By using LendingRobot, you have access to individual loans, not opaque bundles. Furthermore, Lending Club assets are held by an independent third party, a qualified custodian, which means they can’t misrepresent the notes and cash in your account.

Today, like it happened yesterday and will happen again tomorrow, hundreds of thousands of borrowers will make a payment towards their Lending Club loans, some of them trickling down to your account as they should. It has nothing to do with the Lending Club stock price, and we still have the utmost trust in the management of this company.

Steady returns,
The LendingRobot Team"

I can see this viewpoint. When I first started using LC, I bought a small package of loans and they were all over the board. Many of those initial loans defaulted. So I could absolutely see investing in $24 million of packaged loans not going well. However, unfortunately, there's really no way of verifying whether or not they are telling the truth. Was this really a package or was this individual loans that were misrepresented? Don't know.

Another thing that was mentioned in various articles was that the CEO was actually changing the loans to fit the criteria. Again, was this a change of the actual loans themselves or simply a change of the loans in the package? Again, don't know.

Further, the media itself is extremely untrustworthy. Yellow journalism has become the norm. Who knows if what is being published is actually even remotely true. It may very well not be.

But, again, there is simply too many variables here to know (or even guess) what is actually going on.

I was watching Shark Tank last night and Robert Herjavec said something that absolutely applies to this situation: "Be risky with your work. Be safe with your investments".

 

[MJ DeMarco]

http://www.businessinsider.com/lend...stigations-could-buy-more-of-its-loans-2016-5

Just screams lack of confidence...

The immediate concern for LendingClub's management is to prop up the flagging business and stop it from imploding.

LendingClub says: "A number of investors that, in the aggregate, have contributed a significant amount of funding on the platform, have paused their investments in loans through the platform. As a result, the company may need to use its own funds to purchase these loans in the coming months."

Anyhow, I'm glad I don't have six-figures there as my original caveat has rung true, far sooner than I would have expected.

Nonetheless, I truly think this will blow over and everything will turn out OK, at least in the near term. The fundamental risk however, still is there.

 

[Mineralogic]

http://www.businessinsider.com/lend...stigations-could-buy-more-of-its-loans-2016-5

Just screams lack of confidence...



Anyhow, I'm glad I don't have six-figures there as my original caveat has rung true, far sooner than I would have expected.

Nonetheless, I truly think this will blow over and everything will turn out OK, at least in the near term. The fundamental risk however, still is there.

just went thru a 90+ day late loan with them and have been tracking follow up calls,etc, looks like they are getting the borrower current for me

 

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[Get Right]

Any updates on experiences with LC?

 

[Captain Jack]

Any updates on experiences with LC?

My returns are at 9%. I'm not investing anymore and I'm slowly pulling my money out. I've been keeping up with the news and, frankly, I don't trust LC. Like MJ said, this is a new industry ant it may or may not stick around.

Based on what I've read, I'd be more likely to invest with Prosper at this point.

 

[TJH]

My returns are at 9%. I'm not investing anymore and I'm slowly pulling my money out. I've been keeping up with the news and, frankly, I don't trust LC. Like MJ said, this is a new industry ant it may or may not stick around.

Based on what I've read, I'd be more likely to invest with Prosper at this point.

I've had suspicions recently about notes I've purchased. I see Lending Club has been in the news, so this is disappointing to shareholders and note buyers, like myself. I can see the SEC issuing new rules regarding peer-to-peer lending businesses, which I prefer over prohibiting peer-to-peer lending.

 

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[MJ DeMarco]

Any updates on experiences with LC?

At this very moment I have 180 notes, with 200 total.

My current annualized return right now is 9.42% -- adjusted by the lates and charge offs (3 are over 30 days late) the return is stated as 6.8%.



I've stopped putting money into it -- as I mentioned somewhere else in this thread, I don't trust any significant amount of money to a financial startup who has minimal oversight.

 

[Bananas]

At this very moment I have 180 notes, with 200 total.

My current annualized return right now is 9.42% -- adjusted by the lates and charge offs (3 are over 30 days late) the return is stated as 6.8%.

View attachment 13170 View attachment 13171

I've stopped putting money into it -- as I mentioned somewhere else in this thread, I don't trust any significant amount of money to a financial startup who has minimal oversight.

I've just now been an investor for a total 12 months, started in Sept. 2015. Currently sitting at 8%, unsure if I want to continue.

 

[illmasterj]

Higher yields in what appears to be a reputable New Zealand P2P lending company: https://www.harmoney.co.nz/

Disclaimer: I have no skin the game yet, waiting on a reply from them DYODD.

 

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[G-Man]

Had my first chargeoff on LC. My Annualized return is still 6.4%, with 200+ notes, but I'm winding it down. I can find greener pastures even for stuff that's totally passive.

 

[MJ DeMarco]

Had my first chargeoff on LC. My Annualized return is still 6.4%, with 200+ notes, but I'm winding it down. I can find greener pastures even for stuff that's totally passive.

Yea, I got 3 charge-offs and stopped investing. My net return is about 8.5%.

IMO it's not worth my time (although I spent just a few minutes per login) unless I'm willing to go six-figures on it-- and as I stated above, I AM NOT.

I don't trust LC or any P2P company should shit hit the fan.

 

[VDon]

I use bondora for my p2p investments, currently my return is around 10%, already has been around 20%, however I got greedy and tried to cash in early on some good loans, got stuck with the bad ones, plenty of those were complete busts.

I deposit around €150 a month, which is totally irrelevant if I lose it.


Gesendet von iPhone mit Tapatalk

 

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[Phones]

I use bondora for my p2p investments, currently my return is around 10%, already has been around 20%, however I got greedy and tried to cash in early on some good loans, got stuck with the bad ones, plenty of those were complete busts.

I deposit around €150 a month, which is totally irrelevant if I lose it.


Gesendet von iPhone mit Tapatalk

Get out of Bondora, their return calculations are bullshit. Move your money to Twino's Buyback loans.

 

[ljean]

I have had an SDIRA with LC for about a year and a half. My notes are primarily D & E risk and the return is 6-7% which is disappointing. Lots of defaults/charge offs.

 

[MJ DeMarco]

I've essentially given up on examining this further. Even at a few minutes per week, it's hasn't been worth it. And especially since I refuse to allocate big $$ into it.

My return currently stands at 8.16%.

My investment criteria was as follows:

a) Credit over 700
b) Loan considation / Credit card payment only.
c) Verified income.
d) Mortgage or own.

IMO, it's mostly loans to Sidewalkers (scammers/deadbeats), whereas I was hoping it was loans to Slowlaners (responsible people looking to do better). I've had multiple charge-offs involving people who make one payment on a $35,000 loan and then disappear. F*ck that.

 

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[G-Man]

IMO, it's mostly loans to Sidewalkers (scammers/deadbeats), whereas I was hoping it was loans to Slowlaners (responsible people looking to do better). I've had multiple charge-offs involving people who make one payment on a $35,000 loan and then disappear.

This is exactly what I thought. Failed to consider that responsible slowlaners can walk into any bank to get a loan. They don't need to go onto some online platform.

These days LC reminds me of the jenga block scene from The Big Short where he's explaining the logic of piling enough dog shit into a security and saying it's AAA because it's diversified.

 

[Runum]

I've essentially given up on examining this further.

IMO, it's mostly loans to Sidewalkers (scammers/deadbeats), whereas I was hoping it was loans to Slowlaners (responsible people looking to do better). I've had multiple charge-offs involving people who make one payment on a $35,000 loan and then disappear. F*ck that.

My observations exactly. Quick defaults. Take the money and run.

My returns got down to 5% at one time due to defaults. Back up to mid 7% now. Seeing those quick defaults pisses me off.