Lending Club hits 10 million US$ loan volume

February 29, 2008March 3, 2008 wiseclerk 1 Comment

P2P Lending service Lendingclub.com, which launched last May, today surpasses 10 million US$ in loans. While the total amount is still much lower then the loan volume of competitor Prosper.com (currently over 120 million US$ loan volume) the growth acceleration of Lendingclub is really impressive.

Rob Garcia, Director Web production at Lending Club, told P2P-Banking.com:

This milestone confirms the validity of our approach to person-to-person lending, but more importantly, our value proposition to our borrowers and lenders. Borrowers are realizing 20-30% better rates than going through the banks, while our lenders enjoy 12% average returns. We are working to take this concept to a larger audience, so $10M is just a mile marker in our marathon.

The growth can be seen in this chart. For Prosper loan volume compare chart on this page. So basically in February Lending Club has originiated close to the amount Prosper did, when taking into account only those loans that would fit the minimum criteria of Lending Club's 640 FICO score and <30% DTI.

The statistic information at Lendingclub.com shows that over 1200 loans have been issued. So far few loans are late, but since most of the loans are very young, it is to early to tell which level of defaults will have to be expected. The statistic page also shows that Lendingclub declined over 80 million US$ in loan applications.

If you sign up via this link, you get a 25 US$ bonus by Lending Club (and I am paid a referral fee).

Finding the best MyC4 loans

February 1, 2008July 29, 2008 wiseclerk 4 Comments

MyC4.com accelerated growth during the past month. This is shown by stats on MyC4Stats.com (provided by Wiseclerk.com) showing the loan volume by origination month. Compared to earlier months the loan volume rose sharply in December and January. In December 150,000 Euro loans and in January 250,000 Euro loans were disbursed to African entrepreneurs.

(Source: MyC4Stats.com)

The new MyC4Stats page offers reports helping lenders to find open MyC4 loan listings with the best rates. At MyC4 – unlike at Prosper – every lender funds a loan at his individual interest rate. In fact 50 different lenders funding one specific loan may each earn different, self-set interest rates. While MyC4 sets a maximum for the weighted average interest rate for each loan, it is still possible for an individual lender to bid higher and earn more after funding.

Example: A 2500 Euro loan to Clementine Gbrou, who exports grains to Europe the maximum weighted Wanted interest rate was 12% (lender interest, not borrower). This loan closed with a weighted average interest rate of 11,64% (lender interest). The individual lenders in this loan earn DIFFERENT selfselected interest rate between 3% and 13.5%. Several lenders thus achieved above average rates.

How to find the best loans?

To select the loans with the best rates for bidding in the listing phase a quick overview of available listings sorted by the maximum possible interest rates that can be bid, is important. Several tables on MyC4Stats help lenders on this. Sample screenshot:

(Source: MyC4Stats.com)

The report presents the listings sorted by maximum interest rate (column Maximum bid) that can be bid and states the Euro amount above this rate that serves as a buffer before being outbid. The buffer is caused by the rule that new bids must always be place at least 0.5% lower then the current high bid.

Even more data transparency – Prosper adds missing link

August 17, 2007 wiseclerk

Prosper.com now makes the link between loans and listings available. With this new feature now everyone can see the status of the loan payments of every borrower. On the borrower profile page there is now a "Loans" tab:

Previously only lenders invested in a loan could directly see, which status it had. All others had to use 3rd party tools like Wiseclerk.com. Those had to program their own matching algorithms since no key matching loans to listings was published by Prosper.

Prosper has always been the p2p lending service that made most data available about its market.

I will have to look into which parts of Wiseclerk.com I need to rebuild to make use of the new information linking listings to loans.

Further improvements that Prosper announced include reporting to Transunion and enabling borrowers to repay directly using money in their Prosper account.

Opinions and experiences of lenders regarding Prosper

July 7, 2007 wiseclerk

Every once in a while, I read a post in the Prosper forums that provides lots of insights. Today I found this post interesting where several lenders debate the advantages and disadvantages of investing in Prosper.com and long-term lenders share their opinion. Suggested reading for new lenders.

Cash in an hour – Wonga

June 28, 2007 wiseclerk

Though not p2p lending, I found the concept of British Wonga (not yet launched) remarkable. With no debt and a decent credit record, british consumers can apply for a loan of up to 200 pounds (at about 14 percent interest) and receive the deposit less than 20 minutes after application. Subsequent loan applications can be for higher sums.
Wonga does not draw the money from a bank, an undisclosed partner underwrites the risk.

Prosper loan figures

June 8, 2007June 9, 2007 wiseclerk

Prosper loans have meanwhile surpassed 66 million dollars loan volume. A look at wiseclerk's prosper loan aging table shows that Prosper.com succeeds in increasing originating loan volume nearly every month. Currently new loans for about 8 million US$ originate each month.

However the figures also show an alarmingly high volume for late and defaulted loans. Especially when looking at older loans (the new ones do not have aged enough to be technically able to default). For example of 2.1 million dollar loan value that originated in June last year, $177,000 loan value has defaulted and another $105,000 are 3 or more months late. The default rate for loans from June 2006 will therefore be well above 10 percent at the end of the 36 month term. And this is no execption. For March and April 2006 defaults are already higher than 10 percent of originating loan value.