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N
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OP: April 07, 2013, 11:00:00 PM
It seems that gone are the days of 1000+ loan availability. In the last couple weeks, we're seeing very low averages. At the moment, it looks like we're at about 300 loans but over the weekend it was below 200. Why is this? Social lending has two general exposure points which affect business performance: Borrowers and Lenders. Are there less borrowers or are there too many lenders? I'd wager that Lending Club business isn't growing symmetrically. More borrowers are needed to keep up with the amount of money that investors are willing to lend. With investors chasing serious returns, and the fact that every single loan since inception on Lending Club has been 100% funded, I'd argue that they could stop advertising to investors entirely and instead, focus on the borrowers. I imagine that's where the real money for Lending Club comes from. If a loan is 100% funded and Lending Club takes a 1% service fee on payment processing, it doesn't matter if five or 500 people have invested in the loan, the outcome is the same for Lending Club. It seems that Lending Club is a victim of their own success.  But that's just my thoughts...

With such low availability, how do you ensure you get the best notes? Personally, I use bluevestment.com's auto investment and selling service. It sure as hell beats sitting around refreshing the browser all day and trying to quickly pounce on notes. I'm finding $35,000 loans with six total investors (luckily, I'm one of them, even if it's only for a $25 portion). With competition so strong, how do you ensure you get the best notes? I'd love to hear people's comments on loan availability.
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N
  • Posts: 98
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#1: December 31, 1969, 07:00:00 PM
"With competition so strong, how do you ensure you get the best notes? I'd love to hear people's comments on loan availability."

Nathan, I can't comment for people who shop off the LC platform as I live in NJ and have to shop off the Folio Platform.  That means I can shop for freshly issued loans but.....ONE AT A TIME!

I'm sure you're going to find out that people here have different buying strategies.  Those will vary from people who auto invest (like you) to those picking loans, one at a time.

How do you get the best notes?  There is no guaranteed process.  However, many here will agree that the eye-ball test is the final (and best) method for qualifying a note for purchase.  You'd be surprised at how many red-flags you could pick up by being the final judge. 

Personally, I like the hunt.
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b
  • Posts: 152
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#2: December 31, 1969, 07:00:00 PM
The number of loans is lower on the platform because they get invested fully so quickly--especially in the first week of a month. Looking at the loans on the platform is like looking at a picture of a river. You get absolutely no sense of how fast the water is moving.

I use my website to pounce on loans the moment they become available. Unlike Blue's work, which requires the customer to pick a filter, we take the approach that there are many people out there who want to be provided the strategy, too. Automated investment with said strategy is in the works (realistically a few months away), but for now subscribers have to pop on within a few minutes after the magic hours at LC to get the best selection. Www.p2p-picks.com
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C
  • Posts: 5
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#3: December 31, 1969, 07:00:00 PM
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T
  • Posts: 6588
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#4: December 31, 1969, 07:00:00 PM
"I'm sure you have heard it before and will hear it again, but the "best notes" criteria is very subjective.  It's like picking the best horse on race day: a lot of people will bet on different horses based on different criteria, but at the end of the day you don't know who was right until after the race.  With P2P lending coming in second or third probably isn't so bad either."

+1
(Great analogy!)
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j
  • Posts: 4
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#5: December 31, 1969, 07:00:00 PM
Nathan, I can't help but juxtapose LC's own statistics in terms of dollar value of loans issued each month, compared with the typical number of loans we see on that platform at any given time.

I agree with you that it clearly seems that there are a lot less loans sitting on the platform waiting to be funded. Seeing 200-300 has been commonplace lately, but it wasn't long ago that you would see well over 1000.

So if the LC stats say that monthly loan issuance is still very strong, but less loans seem available on the platform, there's probably a few explanations which all are probably contributing:

1. Loans are getting funded faster in general, so they don't stay listed on the online platform for very long
2. I suspect many loans are getting funded before they ever make it to the online platform, because they are being snatched up by institutional investors.

I don't think the lower number of listed loans on the web site reflects less demand for loans from borrowers, because the monthly dollar value of loans issued (see the "statistics" section on the LC website, look at the Total Loans Funded graph) continues to be strong. In March LC issued almost $130 million in loans, so there's no weakness in loan demand.
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T
  • Posts: 6588
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#6: December 31, 1969, 07:00:00 PM
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T
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#7: December 31, 1969, 07:00:00 PM
If you have a question about my service, please post in the P2P Picks section to keep the original thread on topic and I'll answer it there. More or less it's a unique credit scoring technique, whereas filtering just looks for one specific combination of attributes.
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F
  • Posts: 282
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#8: December 31, 1969, 07:00:00 PM
I also noticed that the number of "Removed" fully-funded loans is lower recently.  Usually about half of my fully-funded loans didn't get to the "Issued" status; however, most of them do nowadays.

Perhaps this is another reason for the lower number of borrowers: LC is now more stringent on the borrowers.
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G

GS

  • Posts: 87
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#9: December 31, 1969, 07:00:00 PM
I would not be surprised if LC sees a surplus of investors as a reason to raise fees on investors.
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S
  • Posts: 31
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#10: December 31, 1969, 07:00:00 PM
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T
  • Posts: 6588
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#11: December 31, 1969, 07:00:00 PM
Down to 85 loans on LC right now ... geez ... I think I'm going to have to start investing $50 or $100 when I find a loan I like.
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Z
  • Posts: 119
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#12: December 31, 1969, 07:00:00 PM
I would just suggest everyone start using Interest Radar to compete with these big fish...it's not that there aren't enough, its that unless you have automated investment capabilities (via the API that Interest Radar uses) you can't compete to get the loans you want.

It would be the best $60 you've ever spent...trust me.

Disclaimer: I don't receive any compensation for suggesting that you join. I just firmly beleive its the best LC account management tool end-to-end. Not only does it provide you with the most extensive research options, a proprietary loan scoring model, complete portfolio management, but also risk management and SO much more....
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s
  • Posts: 78
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#13: December 31, 1969, 07:00:00 PM
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T
  • Posts: 6588
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#14: December 31, 1969, 07:00:00 PM
Lending Club's priorities lie in maximizing originations subject to some minimum acceptable basal return on their portfolio.
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