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Transplant Athlete
Wednesday, September 15, 2010
  Lending Club By Loan Purpose And Months Since Last Delinquency

Update: Now that Lending Club has raised their loan limit, these numbers have all changed. So, please don't rely on these results. You can follow the methodology to perform your own analysis on the new data.


I changed the text values to numerical values: 1= vehicle (repair or purchase) 2=moving 3=consolidation/refinancing 4=Home Improvement 5=Small Business (includes: investing money in business, real estate, stock market, get rich quick schemes, funding for existing business, etc) 6=Education 7=Medical expenses 8=Wedding 9=Major purchase (RV, furniture, etc.) 10=Vacation 11=Misc. Other 12=Relending on Lending Club 13=Green/renewable. Swapping was easy for most of the data, I just used FIND/REPLACE, but loans with OTHER as the purpose were a problem and after sifting through 14,000 records, I'm not really happy with people who chose it to describe their loan.

I had to swap out the OTHER category by HAND. It took me several days to re-code all those OTHER loans (you're welcome). When reviewing stuff that was designated OTHER, if I couldn't tell in seconds what it was it got an 11. If it didn't have any information it got an 11. I probably should have added a "Taxes" category and an "Attorney" category because I encountered them a lot...but I didn't.

LOAN PURPOSE
Fully Paid CountChargeOff/DefaultPurpose%
5292614.68%
2261526.22%
732038134.95%
11008146.86%
797123513.37%
4563967.88%
2551776.25%
3611483.73%
7752793.37%
1493101.97%
66720112.91%
240120%
200130%

The percent column was calculated this way: ChargeOff&Default Count / (ChargeOff&Default Count + Fully Paid&Current Count).

I've been on Lending Club for awhile and I have never put money into a loan designated Small Business and I never will. I've co-founded two businesses so you'd think I'd be sympathetic to the plight of the entrepreneur, but lending money for a small business on Lending Club is just too risky with very little upside. As the data shows, a large percentage of these loans will be charged-off.

The MONTHS SINCE LAST DELINQUENCY data is not very reliable, roughly 20% of the cells do not have a value. It's been left blank. When looking through the data, it's not as simple as adding zero's in the blank spots. Some of those loans have had several delinquencies listed in the past 24 months column, but no value listed in the months since last delinquency column. Also, I believe if the borrower has never had a delinquency it shows up as a blank cell. Here's what the data looks like:

MONTHS SINCE LAST DELINQUENCY
Fully Paid CountChargeOff/DefaultMonths%
2951276blank8.55%
177118409.41%
80836104.27%
125348203.69%
139149303.40%
131237402.74%
99652504.96%
78223602.86%
66726703.75%
67616802.31%
731901.35%
301000%

I'm at the point where I can start putting together a picture of the loans I'd like to fund.

 

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I've gone through kidney failure twice. The first time in 2000, my mother donated a kidney; and again in 2008, I'm on dialysis waiting for a breakthrough in immuno-suppression medicines before seeking a new kidney.

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