P2P Lending / NFT Lending Forum

Lending Club Discussion => Investors - LC => Topic started by: OleBill on August 14, 2017, 11:00:00 PM

Title: 5 Key Things to Know About Investing at LendingClub
Post by: OleBill on August 14, 2017, 11:00:00 PM
I received an Email from Lending Club with an attached PDF brochure titled "5 Key Things to Know About Investing at LendingClub". I wonder if this was a mass Email or specifically directed to me because of my recent activities. Did anyone else get this?
Title: 5 Key Things to Know About Investing at LendingClub
Post by: sensij on August 14, 2017, 11:00:00 PM
I received it... doesn't look especially targeted, to me.

Edit:  For context, I'm ~4 mo into my Lending Club experience, and fully invested / re-investing in two IRA accounts.
Title: 5 Key Things to Know About Investing at LendingClub
Post by: Lovinglifestyle on August 14, 2017, 11:00:00 PM
I also received it, and wondered if I was targeted because of my declining balance in spite of occasional purchases.
Title: 5 Key Things to Know About Investing at LendingClub
Post by: storm on August 14, 2017, 11:00:00 PM
Received it on both my taxable account which I've been pulling out of and my IRA where I'm reinvesting.  Don't think it is targeted.
Title: 5 Key Things to Know About Investing at LendingClub
Post by: Fred93 on August 14, 2017, 11:00:00 PM
I did not get it.
Title: 5 Key Things to Know About Investing at LendingClub
Post by: dr.everett on August 14, 2017, 11:00:00 PM
Received it but haven't read it yet. Has anyone else & does it contain anything worth while?
Title: 5 Key Things to Know About Investing at LendingClub
Post by: SLCPaladin on August 14, 2017, 11:00:00 PM
I received it, glanced over it briefly, and decided it wasn't important information. The main takeaways appeared to be how to manage your expectations about LC as a new asset class.

I pulled up the PDF link from the email and copied and pasted the 5 key take-aways and the intro into each section (PDF was too large to include as an attachment on the forum site). There is nothing profound here and certainly not anything that a mere cursory reading of some of the threads on this forum haven't touched ad nauseum vis-a-vis investment strategy. With respect to point #5, in an environment of deteriorating returns, reinvesting "may" greatly impair returns (full disclosure: I've been winding down my portfolio for the past 6 months).

Introduction
LendingClub Notes provide access to consumer credit, an asset class that was previously only available to institutional investors. Because many LendingClub investors are new to consumer credit, it's important to understand the asset and what to expect. Here are five key things to know about LendingClub Notes that can help you get the most out of your investment experience.

1. Focus On Net Returns
It may be tempting to look at a Note's stated interest rate and assume that's what your return will be, but the interest rate doesn't reflect all of the factors that impact returns. Three of the most notable factors are
charge -offs (when borrowers do not repay their loans), prepayments (when a borrower pays more than their minimum required amount, reducing the amount of interest you'll receive over time), and fees. Charge-offs are typically more impactful than prepayments and fees, which we'll cover in-depth in the next section.

2. Charge-Offs Will Happen
It's inevitable that some borrowers will get behind on their loan payments. Some of these borrowers will get back on track and others will stop repaying their loans. After it's clear that a borrower won't make any more payments a loan is considered "charged-off." All investors in consumer credit experience some charge-offs, so it's important to understand them 2 and consider how they might impact your investment strategy.

3. Diversification Is Key
Purchasing multiple Notes that correspond to different loans or borrowers can help limit the impact of any single charge-off. In fact, 98% of investors who own 100+ Notes of relatively equal size have seen positive returns.

4. Monthly Payments Include Principle And Interest
Loans on the LendingClub platform are fully amortizing, which means monthly payments to investors include both principal and interest. Early on, a larger proportion of any payment is made up of interest. As the loan ages, payments are comprised of more principal.

5. Reinvestment Is Critical For Consistent Returns
Because Notes are fully amortizing, about half of your original investment principal for a 3-year Note can be returned to you within 14 months (assuming the borrower does not chargeoff). New investors can be surprised to see half of the money they earmarked for investment back in their pockets in a little more than a year.

Conclusion
Consumer credit is an exciting asset class and we're proud to make it accessible to a broad range of investors. Our Notes have some unique characteristics that set them apart from other investments and allow them to offer the potential for solid risk-adjusted returns. If you have any questions about how our Notes work or what to expect from your investment, our team is here to help. Contact us to learn more about what Notes can do for your portfolio.
Title: 5 Key Things to Know About Investing at LendingClub
Post by: Peter on August 15, 2017, 11:00:00 PM
Good that they're setting expectations, bad that they're switching between "principle" and "principal" while doing it.  -ye olde English teacher
Title: 5 Key Things to Know About Investing at LendingClub
Post by: TravelingPennies on August 19, 2017, 11:00:00 PM
@SLCPaladin- Thanks for the excellent summary- after reading it, seems to be what most of us who have been here on the forums for a while already know. In a way it's also kind of sad because as others including myself have said, it seems like LC has their head in the sand and isn't doing anything to get better. Maybe if they did we'd stop selling and fleeing? Seems silence is SOP for LC, LR, and others.  ::)
Title: 5 Key Things to Know About Investing at LendingClub
Post by: apc3161 on August 19, 2017, 11:00:00 PM
from: dr.everett on August 20, 2017, 12:14:44 AM
Title: 5 Key Things to Know About Investing at LendingClub
Post by: TravelingPennies on August 19, 2017, 11:00:00 PM
from: apc3161 on August 20, 2017, 02:08:19 PM
Title: 5 Key Things to Know About Investing at LendingClub
Post by: TravelingPennies on August 20, 2017, 11:00:00 PM
from: dr.everett on August 20, 2017, 12:14:44 AM