We come to the end of another month and as expected another strong performance was recorded by both Lending Club and Prosper. The total volume of new loans issued between the two companies stood at $221.7 million in August up from $203.8 million in July. It is pretty simple math to see that the industry is on an annual pace of $2.7 billion in new loans. We are not going to be far off that number for 2013 I expect.
Lending Club Issues $190.3 Million in New Loans
Lending Club continues to grow as fast as they reasonably can. I am no longer surprised by their growth numbers because they are remarkably consistent month in month out. They nearly always show growth in the 7-10% a month range and August, being a long month, was at the top end of that range.
This month saw a new influx of investors to Lending Club and so it became even more competitive during those frenzied couple of minutes after the loans are added four times a day (6am, 10am, 2pm, 6pm PT). Long time investors are finding it very difficult to find enough loans using their standard filters – in this new competitive environment we have to adapt if we want to remain fully invested.
This month I am starting some new analysis of the loan data for the month. Here are some of the highlights for Lending Club – if you would like to see some specific stats let me know and I will be sure to include them next month.
Average loan size: $13,653
Percentage 36/60 month loans: 75%/25%
Average interest rate: 15.6%
Percentage of whole loans: 25.2%
Average FICO score: 698
Below is Lending Club’s 18-month chart, the black line is their always impressive 3-month moving average.
Prosper Issues $31.4 Million in New Loans
Prosper turned in another solid month albeit at a slower growth rate than in previous months. They continued their strong upward trend of the last six months with a record $31.4 million in new loans issued in August up from $30.3 million in July.
Prosper had a very steady and consistent month. For most of the month there were always between 50 and 120 loans available for retail investors and I have been able to keep both my accounts at Prosper fully invested. Loans are added less often at Prosper (9am and 5pm PT on weekdays, noon on weekends) and there is less of a frenzy among investors with each new addition.
Here are some more numbers from Prosper’s month:
Average loan size: $10,262
Percentage 36/60 month loans: 57%/43%
Average interest rate: 18.2%
Percentage of whole loans: 49.8%
Percentage of repeat borrowers: 23.9%
Below is the 18-month chart for Prosper showing the strong growth of the last six months.
Wow great idea with the monthly stats Peter. Do you think its possible that the demand for borrowers will lower the average interest rate in the coming months? Or perhaps adjust these numbers in other ways?
Good question Simon. It is certainly possible that investor demand will cause a downward trend in yields. I am actually working on an article on that very topic right now.
What % of lenders are using IRA funds?
That is a good question and not one I have an answer to I am afraid. Not sure if the platforms will share that with me but I will check.