The end of LendingClub

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StrangePenguin
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The end of LendingClub

Post by StrangePenguin »

Interesting news that Lending Club is getting out of its original business of P2P lending, or at least that's how the email that landed in my inbox this morning sounded to me.

Here's an article about it: https://www.lendacademy.com/lendingclub ... investors/

Personally I have been drawing down my account for a while now and am down to having almost nothing there. I believe I've seen lots of threads here where people report doing similar things, and advising new investors to steer clear. So maybe the writing was on the wall.

I haven't taken the time to understand exactly what their new offering will be. Something more in the banking sector.
runner3081
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Re: The end of LendingClub

Post by runner3081 »

I bailed about 2-years ago. Now, I just hold their worthless stock that I took a bath on during the IPO, lol.
DaufuskieNate
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Re: The end of LendingClub

Post by DaufuskieNate »

It will be interesting to see how the loans perform as they run off.
desiderium
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Re: The end of LendingClub

Post by desiderium »

DaufuskieNate wrote: Thu Oct 08, 2020 11:55 am It will be interesting to see how the loans perform as they run off.
My question as well. I have an account winding down and it seems they have been doing much better with recovering bad loans over the last 1-2years. Maybe operational improvement is behind the switch to alternative capital sources and will persist.
chw
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Re: The end of LendingClub

Post by chw »

DaufuskieNate wrote: Thu Oct 08, 2020 11:55 am It will be interesting to see how the loans perform as they run off.
Pretty much a guarantee the performance will be poor if not replacing the loans that refi or pay off (i.e. better quality loans) in the investment portfolio. The bad cream always rises to the top...
DaufuskieNate
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Re: The end of LendingClub

Post by DaufuskieNate »

chw wrote: Thu Oct 08, 2020 12:02 pm
DaufuskieNate wrote: Thu Oct 08, 2020 11:55 am It will be interesting to see how the loans perform as they run off.
Pretty much a guarantee the performance will be poor if not replacing the loans that refi or pay off (i.e. better quality loans) in the investment portfolio. The bad cream always rises to the top...
I agree. I also believe that Covid-related payment extensions have been propping up recent performance numbers. Also not sure what incentives LC has to do a good job of servicing these loans now that they have exited this side of the business.
bberris
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Re: The end of LendingClub

Post by bberris »

A while back LC reported that the main use of funds borrowed was to pay back debt. So unless borrowers have found another money source, there will be plenty of defaults.
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Re: The end of LendingClub

Post by zaboomafoozarg »

I remember when all the cool people here had 5-10% allocated to P2P loans.
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TomatoTomahto
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Re: The end of LendingClub

Post by TomatoTomahto »

zaboomafoozarg wrote: Fri Oct 09, 2020 9:17 am I remember when all the cool people here had 5-10% allocated to P2P loans.
I’ve never been happier to not be cool :sharebeer
I get the FI part but not the RE part of FIRE.
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Abe
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Re: The end of LendingClub

Post by Abe »

I never did think the return was good enough to compensate for the risk with P2P lending.
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desiderium
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Re: The end of LendingClub

Post by desiderium »

The announcement indicated a switch to a new model
Coming Soon! Just for Notes investors: A way to grow your savings
LendingClub is partnering with Radius Bank, member FDIC, to launch a high-yield savings account exclusively available to our Notes investors. Voted the best digital bank of 2020*, Radius's award-winning, digital banking platform uses state-of-the-art technology to provide a superior banking experience.

The new Founder Savings account will be offered exclusively to our Notes investors as a sincere thank you for your dedication to the LendingClub platform. The account will offer a compelling interest rate only Notes investors can access through Radius Bank.

The Founder Savings account will include an auto-save feature, which will enable investors to automatically transfer their available cash in their Notes investment account to the new savings account on a weekly basis so they can continue to grow their savings.
Instead of inviting investors to take the risk, in exchange for a 1% cut, they appear prepared to take advantage of low market rates to pay for capital and keep the whole spread between that and their loans. Just like the big banks do with credit cards and the millions of customers that carry a balance.

It looks like they are still going to lend money as before. Whether or not they will attend to managing existing notes is not clear, but in a competitive fintech environment, it may.
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alpenglow
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Re: The end of LendingClub

Post by alpenglow »

TomatoTomahto wrote: Fri Oct 09, 2020 9:24 am
zaboomafoozarg wrote: Fri Oct 09, 2020 9:17 am I remember when all the cool people here had 5-10% allocated to P2P loans.
I’ve never been happier to not be cool :sharebeer
With investing, it seems wise to be as uncool as possible.
BV3273
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Re: The end of LendingClub

Post by BV3273 »

I dabbled back in the day. Nothing serious. Got burned on a few loans and got out mostly unscathed.
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StrangePenguin
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Re: The end of LendingClub

Post by StrangePenguin »

desiderium wrote: Fri Oct 09, 2020 9:33 am The announcement indicated a switch to a new model
Coming Soon! Just for Notes investors: A way to grow your savings
LendingClub is partnering with Radius Bank, member FDIC, to launch a high-yield savings account exclusively available to our Notes investors. Voted the best digital bank of 2020*, Radius's award-winning, digital banking platform uses state-of-the-art technology to provide a superior banking experience.

The new Founder Savings account will be offered exclusively to our Notes investors as a sincere thank you for your dedication to the LendingClub platform. The account will offer a compelling interest rate only Notes investors can access through Radius Bank.

The Founder Savings account will include an auto-save feature, which will enable investors to automatically transfer their available cash in their Notes investment account to the new savings account on a weekly basis so they can continue to grow their savings.
Instead of inviting investors to take the risk, in exchange for a 1% cut, they appear prepared to take advantage of low market rates to pay for capital and keep the whole spread between that and their loans. Just like the big banks do with credit cards and the millions of customers that carry a balance.

It looks like they are still going to lend money as before. Whether or not they will attend to managing existing notes is not clear, but in a competitive fintech environment, it may.
Thanks, this is a good point. The new account is going to look a lot more like a plain vanilla savings account with FDIC Insurance and normal liquidity. ( https://www.lendingclub.com/investing/i ... adius-bank). So I guess their new business model is a lot more like a normal bank -- take deposits and pay guaranteed interest, give loans, make money off of the spread. Given that even the best online banks are now paying under 1% for a savings account, I wonder what interest rate they will pay?
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Re: The end of LendingClub

Post by yogesh »

I must thank moderator here who interrupted one of the LC deal posted as response to my question when I was new to this forum and seeking guidance.
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StrangePenguin
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Re: The end of LendingClub

Post by StrangePenguin »

Since everyone has piled on to bash LC, let me point out that for me the big negatives were not actually risk of losing money due to defaults. It was (a) risk of LC going out of business and leaving me completely unsecured, (b) illiquidity, and (c) complicated taxes (and taxation as income). I made better returns than I would have made in a savings account (including the impact of huge numbers of defaults), but the big sacrifice was illiquidity.
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Re: The end of LendingClub

Post by willthrill81 »

StrangePenguin wrote: Fri Oct 09, 2020 10:07 pm Since everyone has piled on to bash LC, let me point out that for me the big negatives were not actually risk of losing money due to defaults. It was (a) risk of LC going out of business and leaving me completely unsecured, (b) illiquidity, and (c) complicated taxes (and taxation as income). I made better returns than I would have made in a savings account (including the impact of huge numbers of defaults), but the big sacrifice was illiquidity.
I suffered from both B and C at varying points in time while investing with LC.

I opened a small account with Lending Club in 2013. I used Nickel Steamroller, which was free at the time, to find a good set of selection criteria for high reward notes, and earned 9.5% returns, which I was very happy with. I then opened a larger Roth IRA account with them in the fall of 2016, and my returns using the exact same selection criteria as before were much lower, just above 4%. It was certainly not worth the platform risk alone for those kinds of returns, never mind the illiquidity. This is the same kind of experience that I've heard from many. The P2P companies lowered their standards for borrowers, and institutional investors greatly eroded the returns. I finished winding down both my taxable account and Roth IRA with LC in 2019 and haven't looked back for a second.
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rj49
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Re: The end of LendingClub

Post by rj49 »

It was a painful investment, since you could see the deadbeats and defaulters slowly dragging down personal returns. I preferred the simple 5% veterans bonds at Streetshares (fortunately they made WA residents liquidate before Covid hit), and now the better yields and real estate diversification of Fundrise. Prosper is still issuing notes, for those who might want some yield and can handle the risks and hassles, including confusing tax forms.
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Re: The end of LendingClub

Post by AlohaJoe »

StrangePenguin wrote: Fri Oct 09, 2020 7:18 pm Thanks, this is a good point. The new account is going to look a lot more like a plain vanilla savings account with FDIC Insurance and normal liquidity. ( https://www.lendingclub.com/investing/i ... adius-bank). So I guess their new business model is a lot more like a normal bank
A few years ago the Bank of England had blog post pondering "Should peer to peer lenders exist in theory?" I thought it was a pretty compelling argument against P2P lending. It looks like their predictions panned out pretty exactly how vanilla economic theory predicted
Economic theory says banks exist because they channel loanable funds more efficiently than individual savers and investors pairing up bilaterally. Those informational, diversification and maturity transformation considerations imply that banks should be able to out-compete peer to peer (P2P) lenders. The stylised fact that few P2P platforms have made a profit to date is in line with this theory. If so, then P2P lenders face a difficult future and they may need to become more like traditional banks in order to survive.

https://bankunderground.co.uk/2018/06/0 ... in-theory/
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Re: The end of LendingClub

Post by IowaFarmBoy »

I dabbled in LC back in the day. I got started because they gave me some cash if I put in some of my own. After a little while, it became apparent that there were too many non-pays and it just took too much time to select loans. I got out and pretty much broke even. The upside was that my having an account allowed me to participate in the IPO. I sold out in the first day and made like $1600-2000 so LC was a win for me.
jeffreys
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Re: The end of LendingClub

Post by jeffreys »

Yesterday was the last day to purchase notes. I looked at my LC account this morning and indeed, the list of loans to invest in is now gone and replaced with a FAQ type page. Also, it appears you can no longer add money to your investor account (makes sense) and only do withdrawals. At this point, I plan to do monthly withdrawals or so and if everyone pays (which won't happen) I'll get about $185 a month. I'm not seeing anything on the so-called high yield interest accounts that is replacing the notes platform yet.
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Re: The end of LendingClub

Post by jrbdmb »

alpenglow wrote: Fri Oct 09, 2020 11:49 am
TomatoTomahto wrote: Fri Oct 09, 2020 9:24 am
zaboomafoozarg wrote: Fri Oct 09, 2020 9:17 am I remember when all the cool people here had 5-10% allocated to P2P loans.
I’ve never been happier to not be cool :sharebeer
With investing, it seems wise to be as uncool as possible.
So what is the coolest investment now? I can't decide between Tesla, Bitcoin, or something I haven't heard about yet. :?
Marseille07
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Re: The end of LendingClub

Post by Marseille07 »

Biggest bullet dodge of my life as I was interviewing for a LC competitor maybe 5 years ago when FinTech was really hot back then. After verbally accepting an offer, the recruiter didn't like my lack of enthusiasm and decided not to move forward.

I went for a household name instead and my RSU went 3~4x. This LC competitor laid off 30% of their staff a year later.
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alpenglow
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Re: The end of LendingClub

Post by alpenglow »

jrbdmb wrote: Mon Dec 28, 2020 2:42 pm
alpenglow wrote: Fri Oct 09, 2020 11:49 am
TomatoTomahto wrote: Fri Oct 09, 2020 9:24 am
zaboomafoozarg wrote: Fri Oct 09, 2020 9:17 am I remember when all the cool people here had 5-10% allocated to P2P loans.
I’ve never been happier to not be cool :sharebeer
With investing, it seems wise to be as uncool as possible.
So what is the coolest investment now? I can't decide between Tesla, Bitcoin, or something I haven't heard about yet. :?
SPACs for sure.
hi_there
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Re: The end of LendingClub

Post by hi_there »

I've been hearing a lot of great things about these ARK funds.

Anyway, not sure what the full story is with LendingClub, but I always suspected they would crash and burn during the first major economic crisis. Earning 7% interest in bonds backed by some random guy who maxed out credit cards building a backyard swimming pool, double wrapped in junky startup credit just seemed like an awful formula. So again... not sure if this is what killed their product, but the timing is interesting.
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Re: The end of LendingClub

Post by FIREchief »

jrbdmb wrote: Mon Dec 28, 2020 2:42 pm So what is the coolest investment now? I can't decide between Tesla, Bitcoin, or something I haven't heard about yet. :?
You won't find that out here. You need to go to a non-financial forum. I'm following a thread now about what a great opportunity Bitcoin is. You just buy some and wait for it to go up. Then you sell and wait for it to go down. Then you buy again. Genius!! :shock:
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: The end of LendingClub

Post by AerialWombat »

deleted
Last edited by AerialWombat on Sat Feb 05, 2022 7:53 pm, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
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Re: The end of LendingClub

Post by Jack FFR1846 »

I may have initially seen LC on MrMoneyMustache and put in some small investments. I watched it pretty closely and also MMM's blog, where he reported monthly how things were going. I could see things going badly and stopped investing early, let loans go to the end, then cash out. As LC was circling the toilet, the MMM spread sheet confirmed that. I sold off at discounts. In the end, I "only" made 10% consistently, had a few late payments but no write offs and got all my money out. I only invested in A and B loans (opposite of what Pete did). I always beat his monthly numbers. Seems LC was a "rewards for not taking as much risk" kind of investment.
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Valuethinker
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Re: The end of LendingClub

Post by Valuethinker »

FIREchief wrote: Mon Dec 28, 2020 6:54 pm
jrbdmb wrote: Mon Dec 28, 2020 2:42 pm So what is the coolest investment now? I can't decide between Tesla, Bitcoin, or something I haven't heard about yet. :?
You won't find that out here. You need to go to a non-financial forum. I'm following a thread now about what a great opportunity Bitcoin is. You just buy some and wait for it to go up. Then you sell and wait for it to go down. Then you buy again. Genius!! :shock:
Smacks forehead.

You mean investing is *that* simple?

How could I have been so stupid all these years?

;-)
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Re: The end of LendingClub

Post by White Coat Investor »

Started getting out (and mostly got out) about 4 years for two reasons:

# 1 I didn't like the shenanigans with the CEO. It really demonstrated the platform risk.
# 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.

I still have $24.68 in there. Took forever to fully liquidate.
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Re: The end of LendingClub

Post by oldfort »

Was there anything about why P2P failed?
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Re: The end of LendingClub

Post by willthrill81 »

White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am I still have $24.68 in there. Took forever to fully liquidate.
I sold all of my notes on the secondary market almost two years ago, which took quite a while. After they were all sold, I only had notes in default left, and I rarely recovered any funds from those, so I had Strata, my Roth IRA administrator, transfer all of the funds to another administrator. But as it turns out, I recovered a fair amount of funds from the defaulted notes, and I've been going through a merry-go-round with LC trying to get those funds and close the LC account. :x
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Re: The end of LendingClub

Post by ClevrChico »

I remember this being hyped up by financial bloggers whom I suspect were getting paid for it. Those who suggested it was simpler/better to buy junk bonds instead were proven right IMO.
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Re: The end of LendingClub

Post by nisiprius »

I have a spectator's (not speculator's!) interest in LENDX, an interval fund (NOT mutual fund and it's important to understand the distinction) from Stone Ridge. This interval fund "pursues its investment objective primarily by buying and selling alternative lending-related securities that generate interest or other streams of payments and that the Adviser (as defined herein) believes offer access to the credit risk premium." I'm interested because it's one of three interval funds that Larry Swedroe once said that his firm suggests to clients.

It seems to have done OK.

I find it much harder to get information about these funds then about mutual funds--from their website or anywhere else. Whatever charts I can find seem to be price only. But on page 4414 of their semiannual report I see:

Image

Period ending, Total return
(Year) 2/28/2017 9.64%
(Year) 2/28/2018 6.49%
(Year) 2/28/2019 4.77%
(Year) 2/28/2020 4.94%
(6 mo) 8/28/2020 -0.18%

That implies growth of $10,000 to $12,825 = CAGR of 5.67%/year.

What to make of that depends, of course, on what you perceive the risks to be, and what you make of the last six months compared to four preceding years.
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Re: The end of LendingClub

Post by willthrill81 »

nisiprius wrote: Tue Dec 29, 2020 10:42 am I have a spectator's (not speculator's!) interest in LENDX, an interval fund (NOT mutual fund and it's important to understand the distinction) from Stone Ridge. This interval fund "pursues its investment objective primarily by buying and selling alternative lending-related securities that generate interest or other streams of payments and that the Adviser (as defined herein) believes offer access to the credit risk premium." I'm interested because it's one of three interval funds that Larry Swedroe once said that his firm suggests to clients.

It seems to have done OK.

I find it much harder to get information about these funds then about mutual funds--from their website or anywhere else. Whatever charts I can find seem to be price only. But on page 4414 of their semiannual report I see:

Image

Period ending, Total return
(Year) 2/28/2017 9.64%
(Year) 2/28/2018 6.49%
(Year) 2/28/2019 4.77%
(Year) 2/28/2020 4.94%
(6 mo) 8/28/2020 -0.18%

That implies growth of $10,000 to $12,825 = CAGR of 5.67%/year.

What to make of that depends, of course, on what you perceive the risks to be, and what you make of the last six months compared to four preceding years.
From 2016 through last month, high yield bonds returned 6.94% and were easily purchased on the open market. Long-term investment-grade bonds returned 9.84% over the same period, and plain vanilla TBM returned 4.50%. In terms of returns, LENDX doesn't appear to have been anything special.
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Re: The end of LendingClubd

Post by firebirdparts »

I gave some money to an advisor a couple years ago just to see what they would do with it. They had a chunk of it in a debt fund from lord Abbott, LFRAX, floating rate, self described as “below investment grade bank loans”. As you can imagine, this was a mildly bad thing to be holding in 2020. This was the first debt mutual fund I have ever looked at. It makes me wonder if any of them would be attractive.
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Re: The end of LendingClub

Post by Abe »

willthrill81 wrote: Tue Dec 29, 2020 10:03 am
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
You can get 15% to 24% return and higher on 1st position loans backed by real estate if you know how to do it. On unsecured loans you can get a lot higher return than that.
Slow and steady wins the race.
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Re: The end of LendingClub

Post by willthrill81 »

Abe wrote: Tue Dec 29, 2020 11:14 am
willthrill81 wrote: Tue Dec 29, 2020 10:03 am
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
You can get 15% to 24% return and higher on 1st position loans backed by real estate if you know how to do it. On unsecured loans you can get a lot higher return than that.
I would very much appreciate it if you would start a new thread discussing the specifics as to how to do that.
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Re: The end of LendingClub

Post by TravelGeek »

Abe wrote: Tue Dec 29, 2020 11:14 am
willthrill81 wrote: Tue Dec 29, 2020 10:03 am
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
You can get 15% to 24% return and higher on 1st position loans backed by real estate if you know how to do it. On unsecured loans you can get a lot higher return than that.
Did you tell the guy who wants 15% ROI guaranteed?

viewtopic.php?p=5688357#p5688357
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Abe
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Re: The end of LendingClub

Post by Abe »

willthrill81 wrote: Tue Dec 29, 2020 11:18 am
Abe wrote: Tue Dec 29, 2020 11:14 am
willthrill81 wrote: Tue Dec 29, 2020 10:03 am
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
You can get 15% to 24% return and higher on 1st position loans backed by real estate if you know how to do it. On unsecured loans you can get a lot higher return than that.
I would very much appreciate it if you would start a new thread discussing the specifics as to how to do that.
Sure. I started a new thread titled: How to get higher returns with secured loans
viewtopic.php?f=1&t=334335
Last edited by Abe on Tue Dec 29, 2020 1:46 pm, edited 1 time in total.
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Re: The end of LendingClub

Post by White Coat Investor »

ClevrChico wrote: Tue Dec 29, 2020 10:11 am I remember this being hyped up by financial bloggers whom I suspect were getting paid for it. Those who suggested it was simpler/better to buy junk bonds instead were proven right IMO.
That's not true. My returns at LC were just fine. That was never my issue.

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Re: The end of LendingClub

Post by White Coat Investor »

Abe wrote: Tue Dec 29, 2020 11:14 am
willthrill81 wrote: Tue Dec 29, 2020 10:03 am
White Coat Investor wrote: Tue Dec 29, 2020 9:46 am # 2 It seemed silly to earn 8-12% on loans backed by nothing when I could get 8-12% on loans backed by real estate in 1st position.
Unfortunately, the latter type of loans are still only available to accredited investors, TMK.
You can get 15% to 24% return and higher on 1st position loans backed by real estate if you know how to do it. On unsecured loans you can get a lot higher return than that.
That seems rather optimistic to me (I would expect to take leveraged risk on the equity side to get that), but certainly 7-12% is relatively easy to get consistently. But yes, these funds do require you to be an accredited investor or more (one I'm in requires qualified clients.)
Last edited by White Coat Investor on Tue Dec 29, 2020 12:31 pm, edited 1 time in total.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Register44
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Re: The end of LendingClub

Post by Register44 »

:arrow:
Last edited by Register44 on Mon Jan 11, 2021 7:39 pm, edited 1 time in total.
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ClevrChico
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Re: The end of LendingClub

Post by ClevrChico »

White Coat Investor wrote: Tue Dec 29, 2020 12:23 pm
ClevrChico wrote: Tue Dec 29, 2020 10:11 am I remember this being hyped up by financial bloggers whom I suspect were getting paid for it. Those who suggested it was simpler/better to buy junk bonds instead were proven right IMO.
That's not true. My returns at LC were just fine. That was never my issue.

13.69% 2012
13.27% 2013
11.48% 2014
10.02% 2015
7.18% 2016
-5.22% 2017 (liquidated most in first half of this year)
-1.60% 2018
21.99% 2019
It's good to hear the returns remained good. Your podcasts and blog are great. Thanks for all you do!
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JohnnyFortune
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Re: The end of LendingClub

Post by JohnnyFortune »

Getting out as well.
They had a good run.
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abuss368
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Re: The end of LendingClub

Post by abuss368 »

StrangePenguin wrote: Thu Oct 08, 2020 12:38 am Interesting news that Lending Club is getting out of its original business of P2P lending, or at least that's how the email that landed in my inbox this morning sounded to me.

Here's an article about it: https://www.lendacademy.com/lendingclub ... investors/

Personally I have been drawing down my account for a while now and am down to having almost nothing there. I believe I've seen lots of threads here where people report doing similar things, and advising new investors to steer clear. So maybe the writing was on the wall.

I haven't taken the time to understand exactly what their new offering will be. Something more in the banking sector.
That is incredible. Are they going out of business? Do you think they will start another platform?

Tony
John C. Bogle: “Simplicity is the master key to financial success."
12413
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Re: The end of LendingClub

Post by 12413 »

I had let my account finish up the remaining loans and was informed in 2019 that my account had finally been closed. To my surprise they sent out their tax form for year 2020 this past January. Apparently they hadn't accounted for the residual $1.35

I've tried emailing and phoning to see if I can close it out for real this time. No dice. Emails get ignored. Phone calls to a customer service rep. only sent me to recorded message to contact them by email. Their standard email reply says they are overwhelmed. Okay, pandemic, short staff, changes in the air for their business I get it. Anyone else have support issues?
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willthrill81
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Re: The end of LendingClub

Post by willthrill81 »

12413 wrote: Wed Apr 21, 2021 8:27 am I had let my account finish up the remaining loans and was informed in 2019 that my account had finally been closed. To my surprise they sent out their tax form for year 2020 this past January. Apparently they hadn't accounted for the residual $1.35

I've tried emailing and phoning to see if I can close it out for real this time. No dice. Emails get ignored. Phone calls to a customer service rep. only sent me to recorded message to contact them by email. Their standard email reply says they are overwhelmed. Okay, pandemic, short staff, changes in the air for their business I get it. Anyone else have support issues?
Don't get me started. I still have about $160 in funds they were able to recover from very past due notes in my LC account, and getting those funds to Strata, the Roth IRA custodian, and then to me so I can send them to another Roth custodian has been in progress since October of last year. That's right, six months. I'm so fed up with the whole thing that I really just don't care what happens to the funds at this point. It's not worth the hassle.
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secondopinion
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Re: The end of LendingClub

Post by secondopinion »

willthrill81 wrote: Wed Apr 21, 2021 8:39 am
12413 wrote: Wed Apr 21, 2021 8:27 am I had let my account finish up the remaining loans and was informed in 2019 that my account had finally been closed. To my surprise they sent out their tax form for year 2020 this past January. Apparently they hadn't accounted for the residual $1.35

I've tried emailing and phoning to see if I can close it out for real this time. No dice. Emails get ignored. Phone calls to a customer service rep. only sent me to recorded message to contact them by email. Their standard email reply says they are overwhelmed. Okay, pandemic, short staff, changes in the air for their business I get it. Anyone else have support issues?
Don't get me started. I still have about $160 in funds they were able to recover from very past due notes in my LC account, and getting those funds to Strata, the Roth IRA custodian, and then to me so I can send them to another Roth custodian has been in progress since October of last year. That's right, six months. I'm so fed up with the whole thing that I really just don't care what happens to the funds at this point. It's not worth the hassle.
I was planning to put 1% in P2P loans across a few companies once it made sense to do so. Reading this, it will be a long while before I think about this again.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
garlandwhizzer
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Re: The end of LendingClub

Post by garlandwhizzer »

LC is yet another lesson not to stretch for yield. Higher yield is a very effective bait that conceals the hook well. The traditional bond market is extremely efficient at pricing risk, more so than the stock market. When yields of essentially all safe quality bonds throughout the developed world now are less than inflation (negative real), it is entirely reasonable to presume that any fixed income instrument that promises to yield considerably more than anticipated inflation over its duration is taking on considerable risk. If not the bond vigilantes would buy it up and arbitrage away the excess risk adjusted returns

Investor's never ending enthusiasm for non-traditional short cuts to riches with seemingly convincing narratives--these usually turn out to be like LC, money losing pipe dreams. LC was pushed by many on the Forum not too many years ago as the modern innovative solution to our low yield environment. These days the short cut is more in equity darlings like BTC, TSLA, crypto, tech IPOs, etc.. How that will turn out nobody knows for sure now. In general over the long term the market does not deliver outsized return without outsized risk. I believe that the search for long term outperformance is on average a neutral or losing strategy. There are exceptions but very few investors can consistently separate winners from losers prospectively. LC in its heyday had a convincing narrative for its future success. The same may occur to the with today's sentiment/emotion driven darlings. Investing is a very challenging game. A measure of humility and skepticism seems to me appropriate attitudes for investors when evaluating innovative new approaches to investing success. You need more than a nice narrative.

Garland Whizzer
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