Author Topic: Lending Club fail  (Read 4465 times)

blackfedora

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Lending Club fail
« on: August 30, 2013, 04:02:18 PM »
I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...

Self-employed-swami

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Re: Lending Club fail
« Reply #1 on: August 30, 2013, 04:11:10 PM »
Haha, awesome! 

You should see if you can be your own funder, just for shits and giggles.

Hugh H

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Re: Lending Club fail
« Reply #2 on: August 30, 2013, 08:02:07 PM »
Haha, awesome! 

You should see if you can be your own funder, just for shits and giggles.

Brilliant… pay interest to yourself and save more!

Nords

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Re: Lending Club fail
« Reply #3 on: August 30, 2013, 10:59:28 PM »
I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...
So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

arebelspy

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Re: Lending Club fail
« Reply #4 on: August 30, 2013, 11:03:23 PM »
I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...
So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

Many people tried this "arbitrage" in the early days of Prosper (this was before LC existed).  It did not work out well (for a number of reasons).

The announcement the OP got could have been worse, it could have been reversed.  I.e. "You've borrowed 20k from us.  Become a lender!"
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beltim

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Re: Lending Club fail
« Reply #5 on: September 01, 2013, 12:01:15 PM »
I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...
So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

Many people tried this "arbitrage" in the early days of Prosper (this was before LC existed).  It did not work out well (for a number of reasons).

The announcement the OP got could have been worse, it could have been reversed.  I.e. "You've borrowed 20k from us.  Become a lender!"


At one point early on in Lending Club I got an offer to take out a Lending Club loan in order to invest in more higher risk loans, in exchange for which I would get a 4% discount on the interest rate.  I have to say I seriously considered it, but I'm glad I didn't participate - returns in that era were significantly below current returns (this is before they reworked the risk determination).  I definitely would have lost money on that deal.