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Author Topic: Feedback on Lending Club Business

f
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Feedback on Lending Club Business
OP: January 09, 2013, 12:00:00 AM
Hi There,

Looking for some feedback on starting a business around Lending Club...

My Background: I worked in the credit card industry for 7 years and know credit policy inside and out. Since I started investing in Lending Club in 2010, I've made 267 loans, have never had a charge-off or default, and am getting >15% returns.

Feedback requested: I'd like to find a way to make a side business off my credit policy knowledge. I want to help others invest, and make sure people that are good credit risks get their loans funded. I'm looking for feedback from this group on a couple ideas on if you think they would work or are interested in them:
  • A daily newsletter where I highlight any loans I would personally invest in, with a link to the loan. I would charge ~$10 per month to be on the list.
  • An investor service where you deposit your money with me and I invest it for you (similar to the Prime service on Lending Club), but I will get you better returns and take a small fee.
  • Any other ideas on how I can help people make better investment decisions?

Thanks!
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J
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Feedback on Lending Club Business
#1: December 31, 1969, 07:00:00 PM
I have been cautiously funding loans for only a few months now with great success so far....   I am still getting my feet wet and am only risking a few hundred dollars a month until I build more confidence in the system.  So for me I would have to be investing a lot more per month to justify the $10 monthly fee and by the time I build up enough confidence in the system I probably won't feel the need for this kind of service.  Have you considered offering a rating system for a few cents per loan?  This would be justifiable for someone investing on any scale and it would open up a lot more prospects for you.  A possible way to market it would be to post previous ratings vs success rates for those loans.

 
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T
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Feedback on Lending Club Business
#2: December 31, 1969, 07:00:00 PM
That's helpful. Thanks John
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r
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Feedback on Lending Club Business
#4: December 31, 1969, 07:00:00 PM
You portfolio doesn't seem too old -- what is the average age?  Not knocking your skills, just saying defaults are part of the game and they'll happen.
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Feedback on Lending Club Business
#5: December 31, 1969, 07:00:00 PM
This forum is DIY types so you are not likely to get a positive response. You will be better off targeting institutions, investment advisors, and hands-off high net worth individuals.

I think you have potential opportunity with both 1 and 2. The #2 will require you to be RIA with the state. The #1 will likely work if the newsletter is daily as loans fill up quickly and targets investment advisors. You can also consider offering your services as consultant. The P2P industry is still very new, as the industry grows I am sure more 'services' opportunities will come up.

I run PeerCube http://www.peercube.com, a Lending Club loan selection platform and quantitatively analyze Lending Club loan data on my blog Random Thoughts http://andirog.blogspot.com. Last year, I was approached by both institutions and high net worth people to consult.

Send me a PM through PeerCube or my blog if you want to discuss more.


from: flojoflojo on January 09, 2013, 01:12:13 PM
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T
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Feedback on Lending Club Business
#6: December 31, 1969, 07:00:00 PM
Thanks Anil - your thoughts are greatly appreciated. I PM-ed you via your blog.
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b
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Feedback on Lending Club Business
#7: December 31, 1969, 07:00:00 PM
15% without one default is amazing. I'd love to know how you think about picking, as well as how old your average note is. Welcome to the forum!
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D
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Feedback on Lending Club Business
#8: December 31, 1969, 07:00:00 PM
No offense, but 15% without a default from only 267 notes is good..................but hardly amazing. How old is the average note? What is the mix of 36 to 60 month notes?? 15% NAR or ROI?

If the answer to those 3 questions are appropriate then I'd be willing to use the word "amazing".................in another year, assuming at least another 200 notes that are at least that old in the portfolio.
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S
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