Thursday, September 27, 2012

Initial Thoughts on Words in Lending Club Loans

Now that we have an easy way to see statistics for word use in loans on Lending Club it's interesting to see what we can find. A few of the interesting things that I've noticed:

  • Loan requests using the word "payday" still seem to be a bad option.
  • None of the worst-performing words are used more than a handful of times. The most frequent word in the group, "restaurant", was used in only 0.22% of successfully created loans. Given these small numbers, it's entirely possible that the worst performing words are only that way due to dumb luck. But, given that words like payday seem to have low payout rates both across the years and at other P2P lending sites (my original list of low-paid words at Lending Club) I'm not convinced that this is sheer randomness.
  • A few of the worst-performing words seem to have performed poorly year-after-year: "franchise", "operate", "tools", "sincerely", in addition to the aforementioned "payday", and "restaurant".
  • None of the most frequently used words really seem to stand out as paying back above or below the average.

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