My recommendation is you stop for the moment. I really don't mean to insult you and I have gone to some trouble to help you answer your question. I can tell from your question you do not understand compound interest and discounted revenue streams well enough to be putting your money in this type of investment. Look at this loan for sale on Folio:
https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=7731130&order_id=27161773¬e_id=32136061" class="bbc_link" target="_blank">https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=7731130&order_id=27161773¬e_id=32136061
Now look at the tables below:
You should recognize the leftmost portion of the table with 36 lines as the "Amortization table" for the original loan. The bold data is given and all the rest of the table is computed from those first three items, Interest, loan amount, and installment payment. You should go to the trouble of creating this table for yourself in excel.
Focus now on the middle table. The loan has had 9 payments made with 27 remaining payments. We do exactly as we did for the original amortization table replacing interest with YTM and loan amount with the asking price of the loan for sale. The borrowers payment remains the same. If you notice on line 36 everything ends with a zero balance neglecting small rounding errors of a few cents. So the first level answer to your question is that the stated YTM on Folio is correctly calculated EXCEPT it does not include the 1% they will charge you on the sale. The rightmost set of data indicates that after their service fee (add 1% to the price) the ACTUAL yield to maturity on this revenue stream (assuming THIS borrower makes all payments) is 16.99% which is iteratively determined (guess the answer and watch the ending balance get near to zero).
Notice that while Folio takes 1% the yield is reduced by a lesser amount (about .78%). You will read this if you study the LC site regarding returns and yields.
One other thing that concerns me is your "strategy has been to buy loans that have 12 months or less payments and never late". So you are purchasing loans when they are most likely to default. See http://www.lendacademy.com/forum/index.php?topic=2364.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=2364.0 and http://blog.lendingrobot.com/" class="bbc_link" target="_blank">http://blog.lendingrobot.com/)
Hope this helps. Your in the right place. Go to unread post since last visit and read the posts with most replies first and follow the links in them. These are generally important. Participate in the discussions and ask question when you don't understand. These are nice folks and someone almost always answers even the silliest of questions although you might have to grovel now and again.
Again, I mean no disrespect. If you already knew all this, welcome to the board and happy investing.
https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=7731130&order_id=27161773¬e_id=32136061" class="bbc_link" target="_blank">https://www.lendingclub.com/foliofn/browseNotesLoanPerf.action?showfoliofn=true&loan_id=7731130&order_id=27161773¬e_id=32136061
Now look at the tables below:
Loan Int | Prin | Paymnt | IntPaid | PrPaid | Bal | |||||||||||||||||
1 | 21.70% | 25.00 | 0.95 | 0.45 | 0.50 | 24.50 | ||||||||||||||||
2 | 0.95 | 0.44 | 0.51 | 24.00 | ||||||||||||||||||
3 | 0.95 | 0.43 | 0.52 | 23.48 | ||||||||||||||||||
4 | 0.95 | 0.42 | 0.53 | 22.95 | ||||||||||||||||||
5 | 0.95 | 0.42 | 0.53 | 22.42 | ||||||||||||||||||
6 | 0.95 | 0.41 | 0.54 | 21.87 | ||||||||||||||||||
7 | 0.95 | 0.40 | 0.55 | 21.32 | ||||||||||||||||||
8 | 0.95 | 0.39 | 0.56 | 20.76 | ||||||||||||||||||
9 | 0.95 | 0.38 | 0.57 | 20.18 | YTM | Pur Price | Paymnt | IntPaid | PrPaid | Bal | ADJYTM | Pur Price | Paymnt | IntPaid | PrPaid | Bal | ||||||
10 | 0.95 | 0.36 | 0.59 | 19.60 | . | . | 17.77% | 21.00 | 0.95 | 0.31 | 0.64 | 20.36 | . | . | 16.99% | 21.21 | 0.95 | 0.30 | 0.65 | 20.56 | ||
11 | 0.95 | 0.35 | 0.60 | 19.00 | 0.95 | 0.30 | 0.65 | 19.71 | 0.95 | 0.29 | 0.66 | 19.90 | ||||||||||
12 | 0.95 | 0.34 | 0.61 | 18.39 | 0.95 | 0.29 | 0.66 | 19.05 | 0.95 | 0.28 | 0.67 | 19.23 | ||||||||||
13 | 0.95 | 0.33 | 0.62 | 17.78 | 0.95 | 0.28 | 0.67 | 18.39 | 0.95 | 0.27 | 0.68 | 18.56 | ||||||||||
14 | 0.95 | 0.32 | 0.63 | 17.15 | 0.95 | 0.27 | 0.68 | 17.71 | 0.95 | 0.26 | 0.69 | 17.87 | ||||||||||
15 | 0.95 | 0.31 | 0.64 | 16.51 | 0.95 | 0.26 | 0.69 | 17.02 | 0.95 | 0.25 | 0.70 | 17.17 | ||||||||||
16 | 0.95 | 0.30 | 0.65 | 15.86 | 0.95 | 0.25 | 0.70 | 16.32 | 0.95 | 0.24 | 0.71 | 16.46 | ||||||||||
17 | 0.95 | 0.29 | 0.66 | 15.19 | 0.95 | 0.24 | 0.71 | 15.61 | 0.95 | 0.23 | 0.72 | 15.75 | ||||||||||
18 | 0.95 | 0.27 | 0.68 | 14.52 | 0.95 | 0.23 | 0.72 | 14.90 | 0.95 | 0.22 | 0.73 | 15.02 | ||||||||||
19 | 0.95 | 0.26 | 0.69 | 13.83 | 0.95 | 0.22 | 0.73 | 14.17 | 0.95 | 0.21 | 0.74 | 14.28 | ||||||||||
20 | 0.95 | 0.25 | 0.70 | 13.13 | 0.95 | 0.21 | 0.74 | 13.43 | 0.95 | 0.20 | 0.75 | 13.54 | ||||||||||
21 | 0.95 | 0.24 | 0.71 | 12.42 | 0.95 | 0.20 | 0.75 | 12.68 | 0.95 | 0.19 | 0.76 | 12.78 | ||||||||||
22 | 0.95 | 0.22 | 0.73 | 11.69 | 0.95 | 0.19 | 0.76 | 11.91 | 0.95 | 0.18 | 0.77 | 12.01 | ||||||||||
23 | 0.95 | 0.21 | 0.74 | 10.95 | 0.95 | 0.18 | 0.77 | 11.14 | 0.95 | 0.17 | 0.78 | 11.23 | ||||||||||
24 | 0.95 | 0.20 | 0.75 | 10.20 | 0.95 | 0.16 | 0.79 | 10.35 | 0.95 | 0.16 | 0.79 | 10.44 | ||||||||||
25 | 0.95 | 0.18 | 0.77 | 9.44 | 0.95 | 0.15 | 0.80 | 9.56 | 0.95 | 0.15 | 0.80 | 9.63 | ||||||||||
26 | 0.95 | 0.17 | 0.78 | 8.66 | 0.95 | 0.14 | 0.81 | 8.75 | 0.95 | 0.14 | 0.81 | 8.82 | ||||||||||
27 | 0.95 | 0.16 | 0.79 | 7.86 | 0.95 | 0.13 | 0.82 | 7.93 | 0.95 | 0.12 | 0.83 | 8.00 | ||||||||||
28 | 0.95 | 0.14 | 0.81 | 7.06 | 0.95 | 0.12 | 0.83 | 7.10 | 0.95 | 0.11 | 0.84 | 7.16 | ||||||||||
29 | 0.95 | 0.13 | 0.82 | 6.23 | 0.95 | 0.11 | 0.84 | 6.25 | 0.95 | 0.10 | 0.85 | 6.31 | ||||||||||
30 | 0.95 | 0.11 | 0.84 | 5.40 | 0.95 | 0.09 | 0.86 | 5.39 | 0.95 | 0.09 | 0.86 | 5.45 | ||||||||||
31 | 0.95 | 0.10 | 0.85 | 4.54 | 0.95 | 0.08 | 0.87 | 4.52 | 0.95 | 0.08 | 0.87 | 4.58 | ||||||||||
32 | 0.95 | 0.08 | 0.87 | 3.68 | 0.95 | 0.07 | 0.88 | 3.64 | 0.95 | 0.06 | 0.89 | 3.69 | ||||||||||
33 | 0.95 | 0.07 | 0.88 | 2.79 | 0.95 | 0.05 | 0.90 | 2.74 | 0.95 | 0.05 | 0.90 | 2.79 | ||||||||||
34 | 0.95 | 0.05 | 0.90 | 1.89 | 0.95 | 0.04 | 0.91 | 1.84 | 0.95 | 0.04 | 0.91 | 1.88 | ||||||||||
35 | 0.95 | 0.03 | 0.92 | 0.98 | 0.95 | 0.03 | 0.92 | 0.91 | 0.95 | 0.03 | 0.92 | 0.96 | ||||||||||
36 | 0.95 | 0.02 | 0.93 | 0.04 | 0.95 | 0.01 | 0.94 | -0.02 | 0.95 | 0.01 | 0.94 | 0.02 | ||||||||||
You should recognize the leftmost portion of the table with 36 lines as the "Amortization table" for the original loan. The bold data is given and all the rest of the table is computed from those first three items, Interest, loan amount, and installment payment. You should go to the trouble of creating this table for yourself in excel.
Focus now on the middle table. The loan has had 9 payments made with 27 remaining payments. We do exactly as we did for the original amortization table replacing interest with YTM and loan amount with the asking price of the loan for sale. The borrowers payment remains the same. If you notice on line 36 everything ends with a zero balance neglecting small rounding errors of a few cents. So the first level answer to your question is that the stated YTM on Folio is correctly calculated EXCEPT it does not include the 1% they will charge you on the sale. The rightmost set of data indicates that after their service fee (add 1% to the price) the ACTUAL yield to maturity on this revenue stream (assuming THIS borrower makes all payments) is 16.99% which is iteratively determined (guess the answer and watch the ending balance get near to zero).
Notice that while Folio takes 1% the yield is reduced by a lesser amount (about .78%). You will read this if you study the LC site regarding returns and yields.
One other thing that concerns me is your "strategy has been to buy loans that have 12 months or less payments and never late". So you are purchasing loans when they are most likely to default. See http://www.lendacademy.com/forum/index.php?topic=2364.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=2364.0 and http://blog.lendingrobot.com/" class="bbc_link" target="_blank">http://blog.lendingrobot.com/)
Hope this helps. Your in the right place. Go to unread post since last visit and read the posts with most replies first and follow the links in them. These are generally important. Participate in the discussions and ask question when you don't understand. These are nice folks and someone almost always answers even the silliest of questions although you might have to grovel now and again.
Again, I mean no disrespect. If you already knew all this, welcome to the board and happy investing.