PeerCube Thoughts

Opinions and analysis of Marketplace Lending, Online Lending, and Peer to Peer Lending.

Mad Rush at Lending Club Loan Release Time: Part V - Loan Term with Time to Fund

Guest Post: Statistics and Emotions in Selling Lending Club Notes

Introducing Self-service Past Performance Data Analysis Tool



Frequently, we get requests from peer to peer lenders about past effectiveness of a particular loan attribute in loan selection on Lending Club and Prosper. For example, a PeerCube user wanted to know whether borrower’s number of accounts ever 120 days past due provides any indication of future performance of the loan. As the frequency of such inquiries was increasing, we decided to develop a self-service tool so that users can explore historical data to answer those questions.

Although it’s still being developed and expanded with more loan attributes, we have introduced this self-service tool for both Lending Club and Prosper at PeerCube. This tool will enable you to review the performance of historical loans with a single loan attribute in aggregate as well as with vintage (loan issue year). The tool is available for free to both registered and unregistered users of PeerCube.


Past Performance

This self-service tool can be accessed from multiple areas on PeerCube as shown in screen captures below:

  1. Lending Club > Past Performance
  2. Prosper > Past Performance
  3. Resources > Past Performance

Figure 1: LC Past Performance Navigation
Figure 2: Prosper Past Performance Navigation
Figure 3: Resources Past Performance Navigation

Past Performance Overview

The first panel Performance Overview shows the overall performance of all aggregated data since the inception of respective marketplaces: Prosper since 2005 and Lending Club since 2007.

The gross and actual yields and loss rate are calculated assuming equal-weighted investment, i.e. a lender invests same amount in all loans. These performance measures are calculated using the methodology described in footnotes at Prosper Marketplace Performance. We use the same measures for both Lending Club and Prosper enabling users to compare performance across platforms.

The second panel Distribution by Vintage (Issue Year) shows the overall performance of all aggregated data by the loan issue year. As these loans are amortized and have multi-year terms and equal monthly payments, the interest received from such loans tend to be front-loaded. This panel shows how the performance measures change as loans mature. Users are able to narrow the display of results in table by using smart search.


Figure 4: Lending Club Past Performance Overview

The first panel also provides a drop-down list of loan attributes. Users can use this list to select a loan attribute and review the past performance by the selected attribute. A new page Past Performance by Loan Attribute is displayed with data appropriate for selected loan attribute.


Figure 5: Lending Club Past Performance Loan Attributes

Past Performance by Loan Attribute

The first panel Performance Overview is same as mentioned above, performance of all aggregated loans since inception. The second panel Performance by Loan Attribute shows the performance measures of all loans grouped by the selected loan attribute. The third panel Distribution by Vintage shows the data grouped by selected loan attribute and vintage year.

This page gives you a glimpse of past performance based on the selected loan attribute. At high level, some attributes may stand out as impactful to the performance in a good or bad way. However, once digging through distribution by vintage the picture may change. For example, on the surface, loans by borrowers with one or more bankruptcies in the past seem to lead to better yield than borrowers with no previous bankruptcy. But when you look at the vintage table, the overall data is skewed by high yield of new loans. So, you may come up with the strategy to fund loans with one bankruptcy to get better yield first and sell them as they become old later.


Next Steps

Once you have an idea of relationship between loan attributes and performance measures, you may want to create your own filter by incorporating multiple loan attributes. For Lending Club investors, you can further back test your filter by checking past performance. We are planning to implement the same feature for Prosper investors. Stay tuned…

We hope this new page will help to improve your lending strategy. If you have any feedback or suggestions on this new feature, we would like to hear from you in the comments!

Comments: (2)

JJ Hendricks | Wednesday July 30, 2014, 2:01 pm
Thank you for creating this tool. It makes it much easier for me to check these hunches about a relationship. I used to run a query on a localized version of the database, but it was cumbersome. This is much better.
Anil Gupta | Tuesday August 5, 2014, 10:09 pm
JJ, you are an advanced user if you were running queries against database. By developing this tool, I am trying to reduce the support requests regarding adding more loan attributes to loan filters. Now, users can check themselves to see if an attribute is significant enough to warrant inclusion.

Join the Conversation

Trading Delinquent Notes, Part 2: Needle in the Haystack

September 5, 2016, 3:20 pm

Selling Delinquent Notes on Lending Club Folio Secondary Market, Part 1: Loss Aversion

August 27, 2016, 1:56 pm

Six Steps to Automated Selling on Lending Club Folio Secondary Market

August 7, 2016, 2:00 pm

Enhancements to Automated Note Selling on Lending Club Folio Secondary Market

July 31, 2016, 6:59 pm

Reading List: Securitization, Forecasting, and Food

July 24, 2016, 4:26 pm

Predicting Demand on Lending Club Retail Platform from Loan Availability Data

July 8, 2016, 9:25 am

Loan Supply and Demand Information for Lending Club Retail Platform

July 5, 2016, 10:58 am

What is your Loan Selection Strategy?

June 21, 2016, 3:13 pm

Automated Buying of Notes on Lending Club Folio Secondary Market

June 12, 2016, 7:05 pm

How to automate Note Selling on Lending Club Secondary Market with PeerCube?

April 2, 2016, 9:55 am

Chart of the Day: Seasonal Trend in Lending Club Charge Off Rate

December 16, 2015, 2:50 pm

Chart of the Day: Lending Club Charge Off Rate with 2015 Payment Month by Credit Grade

December 7, 2015, 11:25 am

A Decision Tree Approach to determining allocation to P2P Lending in your Portfolio

October 12, 2015, 11:14 am

Lending Club FOLIOfn Secondary Market: Penny Note Strategy based on Lowest Ask Price

March 5, 2015, 10:16 am

Lending Club FOLIOfn Secondary Market: Distribution of Available Attributes for Listed Notes

February 23, 2015, 10:39 am

Lending Club Secondary Market: Profitability of Trade and Recovery Rate with Loan Status at Listing

February 16, 2015, 11:04 am

Best Practices for Automated Lending on Lending Club and Prosper Platforms through PeerCube

February 9, 2015, 10:40 am

Prosper Loans Historical Listings: Prosper Ratings, Charge Offs and Performance

February 2, 2015, 11:57 am

Lending Club Secondary Market: Loan Vintage and Loan Status at Listing

January 26, 2015, 2:11 pm

Prosper Loans Historical Listings: Default Rate, Originations, Rating and Days Past Due

January 19, 2015, 1:39 pm

Credit Scoring and Models: Decision Trees

October 2, 2014, 11:35 pm

Lending Club Portfolio Analysis: Updated for Trading Notes

September 26, 2014, 1:03 pm

Cognizant Report on Marketplace Lending: A Critical Review of the Study

August 18, 2014, 11:52 pm

A Conversation with PeerCube User: Getting Started, Experience, and Strategy

August 10, 2014, 9:47 pm

Guest Post: Statistics and Emotions in Selling Lending Club Notes

August 3, 2014, 10:24 pm

Introducing Self-service Past Performance Data Analysis Tool

July 28, 2014, 10:45 pm

Mad Rush at Lending Club Loan Release Time: Part V - Loan Term with Time to Fund

July 14, 2014, 12:01 am

Mad Rush at Lending Club Loan Release Time: Part IV - Interest Rate with Time to Fund

June 30, 2014, 12:59 am

Mad Rush at Lending Club Loan Release Time: Part III - Delinquency Rate and FICO Score Change

June 22, 2014, 10:09 pm

Mad Rush at Loan Release Time: Part II - Loan Performance with Time to Fund

June 15, 2014, 11:20 am

Mad Rush at Lending Club Loan Release Time: Part I

June 8, 2014, 10:11 pm

Lending Club Loan Listings, Issuance, and Impact on Yield from Non-performing Period

May 31, 2014, 2:49 pm

Early Repayment of Loans and Impact on Lenders' Yield at Lending Club

April 28, 2014, 12:00 am

Lending Club Loan Default Rate and Returns: Two Years is a long time in the life of a Loan

March 24, 2014, 9:43 am

My prosperous Prosper experience

March 4, 2014, 10:35 am

FICO Score Trends and Defaults for Lending Club Loans

February 17, 2014, 10:43 am

Lending Club Loan Availability in Second Half of 2013

January 5, 2014, 11:53 am

PeerCube Update

December 2, 2013, 9:36 pm

Lending Club Loans - Positive ROI for Two-third of All Loans

July 7, 2013, 6:54 pm

Impact of Changes in Lending Club Credit Criteria on Credit Grade - Six Months After

June 30, 2013, 11:11 pm

Is Lending Club still self-funding loans?

June 23, 2013, 10:49 pm

Lending Club Loans - What difference a year of maturity makes?

June 16, 2013, 6:32 pm

Lending Club Loans and Credit Cards Default Rate

June 9, 2013, 3:31 pm