P2P Lending / NFT Lending Forum

Mountain America Credit Union just upped their 5-year yield to 2.8%:

https://www.depositaccounts.com/banks/mountain-america-cu.html" class="bbc_link" target="_blank">https://www.depositaccounts.com/banks/mountain-america-cu.html

4-6% returns at LC with unfavorable tax treatment is not enough to compensate me for the risk when I can CD ladder at 2.8% risk-free yield. I'm not hot money, I've been here for years. But things have changed pretty substantially. I stay around because I am hoping there is some canary in the coal mine that signals we've somehow turned a corner. I have yet to see anything convince me otherwise. I'm worried the macro economy will hit a snag and we'll take another step downward on the sliding return ladder.

As Sean has pointed out, who knows if it will even be 4-6 with the downward trend we are seeing. There is enough uncertainty in the direction of returns, and certainly a high degree of volatility, that LC's interest rates should be higher to compensate. Yet they don't move. Retail lenders are probably a lot less "hot" than institutional money. But we're so insignificant now in the grand scheme of things, I get why we wouldn't register on LC's radar.

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https://forum.lendacademy.com/index.php?topic=4535.msg41686#msg88888888Quote"> from: jennrod12 on August 12, 2017, 11:46:30 PM

As of 11/2/2017:

Adjusted Net Annualized Return:  6.92%
Weighted Average Interest Rate: 14.21%
Weighted Average Age of Portfolio: 31.4 mos
Number of Notes: 6415

Grade
A (11.3%) B (26.8%) C (23.4%)
D (17.8%) E (17.2%) F (2.7%) G (0.7%)

Term
36 (40.6%) 60 (59.4%)

For me it's the same old, same old. I continue to draw down my account. At this point I'm kicking myself that I have so many 5-year notes. This is taking forever.

https://forum.lendacademy.com/index.php?topic=4567.msg42080#msg42080">Quote"> from: kib on October 16, 2017, 01:54:59 PM

Sorry that no one has chimed in on this thread. I'm in the process of winding down my portfolio (although I'm not liquidating on Folio like others). As a result, I don't get into the weeds as much any more. But I think that the collection fee does not go to the investors. I believe the collection fee is viewed as a service provided by LC, so they keep that amount. Someone more knowledgeable may be able to correct me if I have misstated.

Is this LC's version of a partially inverted yield curve? It does make intuitive sense that interest rates should be higher on notes with longer maturity. The fact that this is not the case is perplexing.

And Prosper's latest SEC reports show they are the ones that were profitable last quarter (not LC). Perhaps despite the turbulence they are doing something right? Everyone always knocked Prosper and favored LC on this forum (or so it seemed), but my Prosper returns have always done better than my LC returns (yes, even with the egregious return miscalculations aka "rategate"). Go figure.

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.

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I second depositaccounts.com, that is a great site. PenFed Federal Credit Union put out 3.1% 5-year CDs in 2013 for a brief time and I found out about it there and snapped some up. The deal only lasted about one or two months. I check that site at least once a week for the best CD rates. Currently, I'm getting 2.6% at Mountain America Credit Union NCUA insured on 5-year term deposits.

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https://forum.lendacademy.com/index.php?topic=3365.msg41563#msg88888888Quote"> from: arcee49 on August 04, 2017, 12:23:39 PM

https://forum.lendacademy.com/index.php?topic=4464.msg41506#msg88888888Quote"> from: nonattender on July 31, 2017, 05:19:53 PM

I read the feature article on lendingacademy.com about Wunder capital (e.g., retail investor solar financing platform) and I was wondering if there are any Lend Academy forum participants who have invested on their platform. If so, what is your experience been?