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Post by jordan on Oct 25, 2017 11:29:17 GMT
Hi folks, We've recently completed analysis of Lending Crowd's loan book and published findings in our 'Lending Crowd Review' blog. The author draws parallels with Funding Circle, so could be an interesting read for Funding Circle investors - particularly those that previously enjoyed the manual bid product on FC before it was withdrawn. You can view it by clicking below. Hopefully of some use Lending Crowd ReviewThanks, Jordan
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r00lish67
Member of DD Central
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Post by r00lish67 on Oct 25, 2017 14:08:48 GMT
Hi folks, We've recently completed analysis of Lending Crowd's loan book and published findings in our 'Lending Crowd Review' blog. The author draws parallels with Funding Circle, so could be an interesting read for Funding Circle investors - particularly those that previously enjoyed the manual bid product on FC before it was withdrawn. You can view it by clicking below. Hopefully of some use Lending Crowd ReviewThanks, Jordan Hi Jordan, I note your review makes no mention of Lending Crowd's record on recoveries of defaulted loans. I would be interested on your take on this, and the comparison to FC. I also don't see any specifics around the current origination volumes and profitability of LC. I believe FC can't currently turn a profit, and I think their origination is several orders of magnitude higher than LC. So, I'm concerned about platform risk. Perhaps they save cost by not having a recoveries team
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Post by moreno1986 on Oct 26, 2017 1:28:31 GMT
Hello everyone I need a question answered, I recently started using lending crowd for the month now but I've noticed something which is confusing me. I currently have two loans with lending crowd first one is £250 at the rate of 10.35% and my second one is £240 at the rate of 12.95% but what's confusing me is my first month return, it doesn't match the calculation.
First loan
Amount: £250 Rate: 10.35% Length: 57 months First payment: £5.34 Interest earned: £0.96 (online calculation shows interest rate 4.3%) Expected first payment: £6.54 Expect Interest earned: 2.16 (online calculation shows interest rate 10.35%) Fee after payment
Second loan
Amount: £240 Rate: 12.95% Length: 18 months First payment: £14.55 Interest earned: £1.22 (online calculation shows interest rate 6.1%) Expected first payment: £15.89 Expect Interest earned: £2.59 (online calculation shows interest rate 12.95%) Fee after payment
This is my first time so I'm trying to understand this. am I reading this wrong if you can help me to understand, i would be very grateful.
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arbster
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Post by arbster on Oct 26, 2017 7:03:46 GMT
You should be thankful if you get 4.3%, let alone the headline rate. Thanks to LendingCrowd's abysmal credit assessment and recovery processes my XIRR for the past 13 months is 1.82%, although that's up from the all-time low of 0.23%.
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Post by albermarle on Oct 26, 2017 11:15:52 GMT
Hello everyone I need a question answered, I recently started using lending crowd for the month now but I've noticed something which is confusing me. I currently have two loans with lending crowd first one is £250 at the rate of 10.35% and my second one is £240 at the rate of 12.95% but what's confusing me is my first month return, it doesn't match the calculation. First loan Amount: £250 Rate: 10.35% Length: 57 months First payment: £5.34 Interest earned: £0.96 (online calculation shows interest rate 4.3%) Expected first payment: £6.54 Expect Interest earned: 2.16 (online calculation shows interest rate 10.35%) Fee after payment Second loan Amount: £240 Rate: 12.95% Length: 18 months First payment: £14.55 Interest earned: £1.22 (online calculation shows interest rate 6.1%) Expected first payment: £15.89 Expect Interest earned: £2.59 (online calculation shows interest rate 12.95%) Fee after payment This is my first time so I'm trying to understand this. am I reading this wrong if you can help me to understand, i would be very grateful.
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Post by albermarle on Oct 26, 2017 11:19:40 GMT
Hello everyone I need a question answered, I recently started using lending crowd for the month now but I've noticed something which is confusing me. I currently have two loans with lending crowd first one is £250 at the rate of 10.35% and my second one is £240 at the rate of 12.95% but what's confusing me is my first month return, it doesn't match the calculation. First loan Amount: £250 Rate: 10.35% Length: 57 months First payment: £5.34 Interest earned: £0.96 (online calculation shows interest rate 4.3%) Expected first payment: £6.54 Expect Interest earned: 2.16 (online calculation shows interest rate 10.35%) Fee after payment Second loan Amount: £240 Rate: 12.95% Length: 18 months First payment: £14.55 Interest earned: £1.22 (online calculation shows interest rate 6.1%) Expected first payment: £15.89 Expect Interest earned: £2.59 (online calculation shows interest rate 12.95%) Fee after payment This is my first time so I'm trying to understand this. am I reading this wrong if you can help me to understand, i would be very grateful. Are you aware that the loan period does not start immediately when the auction is closed? It usually takes 10/14 days for the paperwork to be sorted out with the borrower. If that is not the reason, then suggest you mail LC directly for an explanation.
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Post by albermarle on Oct 26, 2017 11:33:21 GMT
To follow up a couple of points made :
The historic defaulted loan recovery rate is poor/non existent , so a disadvantage compared to FC. However the interest rates are on average a bit better.
The report also does not take account that there are 2016 originated loans 'in arrears' . Assuming these will turn into defaulted loans at some point , then the 2016 default rate will be similar to 2015 i.e >5%
However no loan originated in 2017 ( and there have been a lot more than in previous years ) is in default or in arrears ( yet ) . So a relative newbie like me is easily making >10%, for now....
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Post by moreno1986 on Oct 26, 2017 16:55:52 GMT
You should be thankful if you get 4.3%, let alone the headline rate. Thanks to LendingCrowd's abysmal credit assessment and recovery processes my XIRR for the past 13 months is 1.82%, although that's up from the all-time low of 0.23%. I never said I wasn't thankful. 4% is a great return and I will never be ungrateful if I get that kind of rate but trying to understand how the system works. Like I said I'm new to this and I'm trying to understand why it doesn't match the original 10.34% and 12.95% online calculation. they're already giving me a figure on what they will pay next month (First Payment) I'm not complaining I'm trying to understand.
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Post by moreno1986 on Oct 26, 2017 17:31:07 GMT
Hello everyone I need a question answered, I recently started using lending crowd for the month now but I've noticed something which is confusing me. I currently have two loans with lending crowd first one is £250 at the rate of 10.35% and my second one is £240 at the rate of 12.95% but what's confusing me is my first month return, it doesn't match the calculation. First loan Amount: £250 Rate: 10.35% Length: 57 months First payment: £5.34 Interest earned: £0.96 (online calculation shows interest rate 4.3%) Expected first payment: £6.54 Expect Interest earned: 2.16 (online calculation shows interest rate 10.35%) Fee after payment Second loan Amount: £240 Rate: 12.95% Length: 18 months First payment: £14.55 Interest earned: £1.22 (online calculation shows interest rate 6.1%) Expected first payment: £15.89 Expect Interest earned: £2.59 (online calculation shows interest rate 12.95%) Fee after payment This is my first time so I'm trying to understand this. am I reading this wrong if you can help me to understand, i would be very grateful. Are you aware that the loan period does not start immediately when the auction is closed? It usually takes 10/14 days for the paperwork to be sorted out with the borrower. If that is not the reason, then suggest you mail LC directly for an explanation. I'll be honest and say I don't trust what they (LC) will say to me. Which is why I'm asking you guys these questions. They gave me an estimate on what I would earn in advance which matches the 4.3%, I was asking you guys if you knew why it doesn't match to 10.34%. online calculation. I understand that if I borrow at 10% I pay at 10%. If a company is having problem, you would understand if the loan goes under or rate goes down but I'm dealing with earn that doesn't match the rate already set Before Fee. 4% Return Is Amazing. What is other the 6% I'm Learning As Go Along 😁
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Oct 27, 2017 8:23:19 GMT
Hi moreno1986 , With my LC account I always found that returns received matched expectations - the problem was too many weren't received and none were recovered! I wonder if your apparent anomaly is due to buying into these loans part way thru their monthly cycle, meaning you are only getting a partial return? - ie. it's not a full month's worth of interest - which will resolve itself on the second payment. Certainly appears the case in your first example, not sure about the second, but your expected interest looks correct for the full month in both. HtH
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Post by albermarle on Oct 27, 2017 11:58:54 GMT
I think The Driver is correct.
If you buy a loan on the secondary market, it is normally between payment dates . So for example if the Borrower next payment date is 14th November and you buy the loan part today , then on 14th November you will get a part payment to your account ( the rest goes to the previous lender)
For new loans , the Borrower might request a regular payment date that is convenient for them , say the 1st of each month . If the loan starts in the middle of the month then the first payment will be only a part payment.
So you should find that the second months payments will be OK ( assuming I am correct !)
Just mail them if you are still concerned.
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arbster
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Post by arbster on Oct 27, 2017 14:50:30 GMT
4% is a great return and I will never be ungrateful if I get that kind of rate but trying to understand how the system works. Sorry, you clearly missed the fact that my tongue was firmly in my cheek. 4% is a terrible gross return for an investment as risky as P2P, especially of the unsecured, small business kind that LC peddles. The gross rate on my LC investments was also 12-13%, but thanks the significant number of defaults, none of which has been recovered, I'm seeing a below-inflation net return. And before anyone asks, no, I wasn't particularly exposed to one borrower, and each default represents less than 4% of my investment.
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Oct 27, 2017 20:31:44 GMT
Hi folks, We've recently completed analysis of Lending Crowd's loan book and published findings in our 'Lending Crowd Review' blog. The author draws parallels with Funding Circle, so could be an interesting read for Funding Circle investors - particularly those that previously enjoyed the manual bid product on FC before it was withdrawn. You can view it by clicking below. Hopefully of some use Lending Crowd ReviewThanks, Jxordan Hi Jordan, I note your review makes no mention of Lending Crowd's record on recoveries of defaulted loans. I would be interested on your take on this, and the comparison to FC. . . . . . . < snip > Hi jordan, An interesting read, and it's enlightening that you haven't quoted LC's misleading statistic for Losses - but how do you rationalise the LC figure for 2015 of 2.27% against the actual 5%+ as you reported? Also, the 2016 arrears are long term, suggesting the 5%+ bad debt is likely to be repeated; and with no recoveries to date long-term surpluses look minimal. Finally, and particularly as the platform is obviously not organically viable, have you evaluated details of the run-off plan?
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Post by jordan on Oct 31, 2017 13:07:40 GMT
Thanks for the questions folks, I'll pass on to the author and return to you ASAP. Apologies for the delay!
Thanks,
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Post by Iain - Orca on Nov 2, 2017 15:01:33 GMT
Hi folks, We've recently completed analysis of Lending Crowd's loan book and published findings in our 'Lending Crowd Review' blog. The author draws parallels with Funding Circle, so could be an interesting read for Funding Circle investors - particularly those that previously enjoyed the manual bid product on FC before it was withdrawn. You can view it by clicking below. Hopefully of some use Lending Crowd ReviewThanks, Jordan Hi Jordan, I note your review makes no mention of Lending Crowd's record on recoveries of defaulted loans. I would be interested on your take on this, and the comparison to FC. I also don't see any specifics around the current origination volumes and profitability of LC. I believe FC can't currently turn a profit, and I think their origination is several orders of magnitude higher than LC. So, I'm concerned about platform risk. Perhaps they save cost by not having a recoveries team Hi, this is Iain, who conducted the analysis and wrote the review. Unfortunately making an assessment of the recoveries process at LC is difficult with the data we have a present. I agree that there is a significant platform risk at LendingCrowd, however in LC's defence their origination has dramatically increased this year which will help the business get to a sustainable position. Over the past couple of years I have generally noticed that the number of staff at LC has reduced, currently on LinkedIn their are 14. This may be a proxy for how the company is managing costs- however I've no hard data to back this up. FC are at a totally different stage. Although origination may be an order or magnitude higher than LC so are the costs of the business. They have over 600 staff members and are funded by external investors. Although they are not operating in profit they are focusing on global growth and spending to achieve this.
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