I hate luck. I love randomness, but I have terrible luck (perception creates reality). I have 1 of the 4 lending club loans that are late in my portfolio. What are the odds?
4 out of the 913 Lending Club loans are late (source lending club statistics page) and 1 one of them is in my portfolio of 61 active loans. This borrower is a B credit grade on Lending club with a FICO score of 714+. She falls into a category of borrowers that LoanChimp no longer bids on: students.
Oh well, I knew it was bound to happen sooner or later. Lates and defaults are a fact of life when lending to strangers over the Internet. Which is why it is important to diversify. Mike from Prosperous Lands gave an excellent guest post at the Prosper blog: Complete Prosper Diversification. The concepts apply to Lending Club as well.
If you would like to try Lending Club I suggest you sign up with a referral link. You will receive $25 signup bonus ($50 if you deposit $1000 or more), which covers your 1st (or first 2) defaulted borrowers. Here is a referral link to sign up and receive the $25 bonus: Signup via this link and receive a $25 startup bonus.
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2 comments ↓
Sorry to hear you had some bad luck. Assuming that the chance of default is entirely random, you had less than a 0.44% chance of this loan going bad. Although, as a blogger you may be able to look at this as an opportunity — a chance to comment on collections.
So far, none of my lending club loans are late. The post is a few weeks old but holding true to date. However, as you point out, I would have needed really bad luck so far to have selected a bad loan.
It could be worse…I have two of the four in my portfolios
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