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.

Enhancements to Word Analysis Pages

Today I have uploaded the latest word-analysis data for Lending Club. In addition, I've added:

• A search box to each page
• New special words for:
• [[[[[DOLLAR]]]]] (use of the $ sign in the title or subject), and
• [[[[[PERCENT]]]]] (use of the % sign in the title or subject)
• Index page displays better on the iPad/iPhone

Index Page and Search Added to Word Analysis Pages

I'm thrilled to see all of the interest in my word analysis. I've just added an index page to the site. Two big things here: a new search box to more easily get to the pages and three 20-word lists covering words with the best payback rate, worst payback rate and most common words used by borrowers.

More changes to come.

Words with Lends

Today I'm pleased to announce an early version of some word-use analysis pages that I've created for all of the loans successfully funded on Lending Club.

For all words used 50 or more times in the loan title and description I've created a page at http://shoofile.com/loanwords/lendingclub/<word>.html where visitors can find out more information about loans that contain that word.

Here are some examples that I've covered on the blog previously:

• Help
• Need
• Payday
• Family
• Son
• Daughter
• Wife
• Husband
• Children

Also I've added a special "word" for when the Loan Description is blank:

• [[[[[BLANK]]]]]

For any word that you'd like to test, you can do so by editing the URL to replace "<word>.html" with whichever word you're curious about.

There are over 2500 words used on Lending Club more than 50 times. For any that aren't used that often you'll get a Not Found error when you look for them.

If this proves popular enough, I'll keep improving the interface to add features like a summary page of the most-used words and a search-box to make finding words easier. I'll also add more details on how I've done the calculations, so that anyone interested can replicate my numbers.

For each topic, a loan is considered to have the word if it appears in the description or subject once or more. I am counting unique loans, so if the borrower wrote the word multiple times, the loan will still count only once. Here's what you get on each report:

• The number of loans using the word per year.
• The percent of loans in currently in each status by year.
• The average grade of all loans containing the word.
• Comparison charts, showing the average payback rate for each loan letter compared to the average payback rate of loans with this word.

For these charts I defined payback rate as: (Paid, Current loans) / (All Loans Except for those with the status Issued)

Update, Sept. 16: I have added an index page to the site here.

Veritat Advisors Becomes NestWise on September 10

On Wednesday I, and presumably all Veritat subscribers, received an e-mail stating that the transition to NestWise would be complete this coming Monday, September 10.

The key points:

• Your financial advisor won't change.
• Current Veritat members are becoming "charter" members of NestWise, which means:
• Access to Learning Center articles
• Access to Online Classes and Additional Resources
• They are espousing a philosophy of Full Life Financial Management

It will be interesting to see more on Monday.

Prosper Collection Process

One of the things that I like about Lending Club is that they list their attempts to reach out to a delinquent borrower to collect on a late loan.

A week and a half ago Social Lending Network had an article detailing Prosper's collection process. It's nice to see the efforts they're making, too--though I would still appreciate a view into that world, just so that I can see that my interests, as a lender, are being watched out for.