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Roundup of Social Lending News – August 11, 2012

by Peter Renton on August 11, 2012

Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week.

We have an excellent variety of articles for you this week. It was kicked off by Fred Wilson, a principal at Union Square Ventures (a VC investor in Lending Club and Funding Circle in the UK) who discussed Ron Lieber’s article in the New York Times last weekend. On the international front this week marked the launch of a new p2p lender in Australia and we also saw coverage of the great month experienced in July by UK p2p lenders. Lending Club did their first blog post in almost five months when they announced the  addition of their new “Approved” status filter and Prosper penned a post about collaborative consumption. Enjoy your weekend.

Mortgage News Daily - On-line Peer Lending Turns to Real Estate Loans

PYMNTS.com - Visa, Morgan Stanley Vet Takes On Tech At Lending Club

Prosper - The Collaborative Consumption Movement

P2P By Design - Peer-to-Peer Lending: Gaining Legitimacy as an Investment Vehicle

Prosper to Retire - P2P Lending 103 – Why spend the time?

This is Money (UK) - ‘I know where every pound is used’: Bank savings exodus delivers record-breaking month for social lending

P2P Analytics - ON LENDING CLUB DEFAULTS (AND THEIR EFFECT ON YOUR PORTFOLIO)

Random Thoughts - Lending Club Loan Amount and Credit Grade

Society One (Australia) - Australia’s first fully compliant p2p lender is here

Lending Club - Help Put Your Money to Work Faster with the “Approved” Review Status Filter

AVC - Bypassing Wall Street

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{ 8 comments… read them below or add one }

Dan B August 11, 2012 at 6:20 am

I’ve been using Lending Club’s Review Status “approved” filter for over 2 years. This is not a new addition, nor does LC imply that it is. I’m assuming they’re just highlighting it as a pointer for beginning investors.

Reply

Peter Renton August 11, 2012 at 6:49 am

Thanks for the clarification Dan. I don’t use it and on Facebook that they implied it was a new feature. I have to admit I didn’t do any checking on it.

Reply

Danny S August 11, 2012 at 4:49 pm

I typically invest in batches of 10 to 20 notes at a time every 8 to 15 days. I dont use the ‘approved’ filter.

I typically get only 1 or 2 notes which end up getting rejected by LC, which means they are approving roughly 90% of the notes listed. With that kind of ratio I think it might be best to continue keeping the ‘approved’ filter off so as to not miss out on any notes I’d otherwise like to invest in.

Reply

Peter Renton August 13, 2012 at 6:33 am

That is my thinking as well Danny. I am not too concerned if I invest in a few loans that end up being not approved and then have my money come back to me. While I haven’t done any detailed analysis here I am guessing in my case it is around 80% of the loans that I invest in end up being approved.

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Dan B August 13, 2012 at 5:14 pm

I’d say that 70-75% is about right around what I’ve been experiencing. Because of multiple accounts & the fact that I invest 5 days a week, I catch almost all notes when they are brand new or just a couple of days old on the platform.

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Danny S August 14, 2012 at 7:09 am

Dan B-

Any reason as to why you look for notes 5 days a week? I’m wondering if there’s an advantage to such a strategy, or if its because perhaps you have a very large sum of notes producing enough interest that you need to constantly reinvest? Do you find that investing only once a week or so ends up where you lose out on investing in notes that get 100% funded quickly?

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Dan B August 14, 2012 at 8:11 am

Danny S………It’s pretty much for the reasons you’ve stated. Because of a large number of notes payments come in daily & with multiple accounts & because I’m adding new money on a regular basis there’s almost always cash available. I’m also an occasional seller of notes which again adds to the cash on hand. So all of the above plus the fact that I like to be as fully invested as possible are the reasons why I invest daily. I’ve been doing it this way for a couple of years now, so it’s pretty quick & painless (less than 5 mins a day per acct).

I suspect that if I only invested say once a week, some loans would probably slip by……………..especially during the first 3-4 business days of each month when institutional money is deployed very heavily & quickly.

My unsolicited advice if you don’t want to be doing it daily, is that 7-8 days is borderline adequate, but 15 is way too long between investing. Keep in mind that new loans are added 7 days a week & only stay active for 13+days. Like I said, just my 2 cents.

Peter Renton August 14, 2012 at 8:57 am

I have the same philosophy as Dan B on this one. But I do every three days. I know I will miss an occasional loan doing this but that is ok with me. I am confident I get to invest in 95% or more of available loans that meet my criteria and I stay pretty much fully invested.

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