Eric’s Credit Community has a List of Lenders by Amount Invested. On this list you will find the that the number one investor goes by the name of Pensioner. They have 816K invested with an average interest rate of 26.53% and an ROI according to Eric of 18.74%.
I was reading a blog (My Personal Finance Blog) about this very subject and I would like to comment on the ROI as defined by Eric’s Credit Community.
Eric makes 2 assumptions which make his ROI numbers inflated: not accounting for DTI by using the Experion expected default rates for less than 20% DTI and valuing both High Risk (HR) and No Credit (NC) loans as a 0% return.
I believe this causes the real ROI to be skewed in the higher direction for DTI and the lower direction for HR and NC. In the case of pensioner he has almost no HR/NC and 89% in C,D,E loans weighted D-. Clearly, pensioner has faith in the law of large numbers. I wish pensioner well and I too will be following closely.
Btw, here is my profile: PUnit.
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