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Post by df on Mar 9, 2019 14:49:38 GMT
Like some of you I entered LC some time ago and was hit by exploding Pizza and other detritus. Due to early losses and the fact that about 60% (or more) of new offerings are with NO security I shy away from the A+ loans. I believe the high risk of losses on this platform require a higher return. I also keep investment per loan to a minimum. According to LC figures on the Dashboard my lifetime return is about 5% future return just over 10% My portfolio is A-7% B+-38% B-39% C+-15% (Note the B & C+ loans are mostly aged.) 16 Losses A-1% B+-56% B-31% C+-6% (1-2016, 4-2017, 8-2018, 2-2019) Surprisingly the so called high risk B & C+ loans have not suffered the greatest losses, but then It is difficult to fathom how LC assess the risk levels, without more information being provided by the platform. To date total loss recoveries have been a paltry 1.352% , hence the reduction of investment per loan. This is one reason why I would never consider an ISA with LC. I can offset the losses against tax, which I could not do if the loan returns were not taxable. It is also the reason why LC is very low in my P2P portfolio. I would be interested to see a similar loss chart from A - C+ if anybody can provide one. My current life time return is 8.67% (projected 9.37%). Difficult to assess my portfolio without clicking on each individual loan (I'm in 362 loans)... I do not invest in A+ - the rate is too low for the risk. I have a small number of A (mostly recent investments), small number of C+, more of B, but the majority are B+. I currently have 9 defaults. 1 is A, 5 are B+ and 3 are B.
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Post by Berkeley on Mar 10, 2019 12:32:53 GMT
That is interesting, it would appear that the B+ loans are the riskiest, but it could simply be that there are more of them.
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Post by df on Mar 10, 2019 16:25:46 GMT
That is interesting, it would appear that the B+ loans are the riskiest, but it could simply be that there are more of them. Yes, definitely more of B+ than anything else, but I've noticed the balance recently started to shift towards A (second largest). B is smaller than A and A+/C+ are very small proportion of LC loan book. Naturally, if you invest in almost every loan, most defaults will be B+ loans.
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pip
Posts: 542
Likes: 725
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Post by pip on Mar 12, 2019 15:30:29 GMT
I have to be fair to LC the quality of their loans appears to have improved a lot since a few years ago (when it was poor!). I have had some defaults in the past year (and some the due diligence on was clearly not great - e.g. an electrician with HSE prohibition notice and terrible reviews getting a loan and then promptly doing a runner) but overall the default levels have been acceptable.
Still the bonuses are the only reason I invest in LC, without them the risk/rewards do not add up.
I will take advantage of the ISA transfer offer ongoing. Don't want to get in too deep though.
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Post by df on Mar 12, 2019 15:50:50 GMT
I have to be fair to LC the quality of their loans appears to have improved a lot since a few years ago (when it was poor!). I have had some defaults in the past year (and some the due diligence on was clearly not great - e.g. an electrician with HSE prohibition notice and terrible reviews getting a loan and then promptly doing a runner) but overall the default levels have been acceptable. Still the bonuses are the only reason I invest in LC, without them the risk/rewards do not add up. I will take advantage of the ISA transfer offer ongoing. Don't want to get in too deep though. I ignored all bonuses because by taking up these offers I would end up being too overexposed to a single platform dealing with mainly unsecured SME loans. I already have 10% of my p2p in LC - don't want any more. 8.57% "actual rate of return" is fine for me. Recently I stopped adding any new funds, only use returns for purchasing new loan parts. If my return falls below 7% I will probably start withdrawal process, but so far (25 months since I joined LC) it's been a good experience.
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Post by captainconfident on Apr 8, 2019 15:54:59 GMT
I've been with LC for nine months now and it is one of the few platforms (+Abl and Rebs, -FC,FK,Ly, steady the rest.) that I am actively adding to. In the end, I find PG only platforms with money spread thinly are less risky than bigger bets on secured loans. I made a mistake in allowing my FC investment to drift on as its black box allocator made bigger and bigger punts on a load of dross, but LC now fills this gap. I haven't had any defaults over 200 loans chosen and just a couple of persistent late payers. I only intended to chip in a few quid for the cashback promotion, but it has been going far better than I expected.
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