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> Other platforms, such as Prosper Marketplace Inc., Avant Inc., or On Deck Capital Inc. have reported either slowing investor demand for loans or a drop in len
by vosper 10y ago
> Other platforms, such as Prosper Marketplace Inc., Avant Inc., or On Deck Capital Inc. have reported either slowing investor demand for loans or a drop in lending volume this year, the result of investors’ skepticism of future returns on online loans and because they see greater opportunity in other bonds.
So where is the smart money going? Lendingclub and Prosper have had reasonable returns for me, and seem like a good way to diversify my investments a bit.
- cm2012 10y agoTheoretically, this is the best time for small investors to buy LC loans. The hedge funds have backed out, so you can get better yield loans for much more competitive pricing. This is unless you think the institutional investors know something you don't, as opposed to just rebalancing their portfolios.
- vosper 10y agoI'm not very strong on finance at all, but if the hedge funds have pulled their money out of the Lendingclub platform then shouldn't that reduce the amount of money that Lendingclub has to lend and therefore drive up the cost of taking a loan from them, assuming demand for their loans hasn't dropped as well? Like a basic supply and demand thing?
- deleted 10y ago[deleted]
- adanto6840 10y agoYes, exactly. What I think the poster was suggesting is that, in theory, now is a good time to be investing in LC loans -- because the rates will be driven up due to the lower availability of capital on the platform. If he was suggesting something else then I'm in the same boat as you, hehe. ;-) I do tend to think that the institutional investors/hedge funds are quite likely to "know more than you do" however, which could instead mean that this is an early signal & would be a foolish play.
- homero 10y agoNo loans just don't get funded
- bluejekyll 10y agoYeah. The Lending Club loan would still need to compete in the broader market, which means that there is a point where the borrower would opt to not take the more expensive loan.
- benmanns 10y agoOnly if the price stays the same.
- partytran 10y ago> The hedge funds have backed out What's your source for this claim?
- homero 10y agoWhat bonds? Lc pays around 7%. I've never seen a bond over 1%
- forgetsusername 10y ago>I've never seen a bond over 1% The BAA Corporate index is 4.79%.
- loeg 10y agoAnd junk corporate bonds are probably less likely to default than LC loans.
- pmorici 10y agoThe difference between LC and a Junk corporate bonds is that with LC you are investing in hundreds of loans at $25 each. You can't get the same kind of diversification corporate bonds.
- dragonwriter 10y ago> The difference between LC and a Junk corporate bonds is that with LC you are investing in hundreds of loans at $25 each. You can't get the same kind of diversification corporate bonds. Are diversified bond funds not a thing now?
- 10y ago
- GBond 10y agoIsn't the competitor in this space the Credit Card companies?