Loanio Launched: Thoughts?

[foofiter]

I had a quick look at the fees. They charge $95 origination fee: OUCH

They cannot lend in SD or PA. They currently are not able to lend in all the others yet.

The other fees appear to be in line with Prosper. I like the idea of joint borrowing where the co-borrower's account will be debited if the primary lender doesn't pay. I may take $100 and give it a try and see how it goes. I will wait and see how it goes for a bit first though.

Anyone else look at it yet?

http://www.loanio.com

Foo

[replimaster]

Like you, Foo, I've looked. Right now I'm in the 'wait and see' mode too. With the high origination fee I'm thinking there will be mostly larger loans. Anyway, we shall see if it will actually be competition for Prosper.
Dave

[deskguy]

just took a quick look at the site and couldn't help but notice the blonde with the big ... um ... er ... well, you know. her monthly net income after expenses is $40k?  what kind of work pays like that?

[sosocratic]

I looked - and wanted to see more.

I read through their faq's and on one page they estimate default rates by credit rating and their estimates look absurdly low. Other than to say they arre quoting Experian they do not say exactly how they arrived at those rates. They may be default rates for mortgages but they do compare the unsecured rates to cedit cards so it may be historical credit card default rates. Anyway, I hav enot yet entered my bank info so to see the full listing of loans but the few examples they did let me see were all listing at very low rates - 4-7%.

I may be wrong, and one of these days I may give them my bank info in order to see (but not this weekend), but from the little I have seen they have borrowers asking for 5% loans and lenders expecting 1% default rates.  When you talk to early Prosper investors they also talk about having bad info and taking beatings. I think Loanio may go through a similar learning process. It will probably take a year or so. Like I said, I'll need ot fullr register and take a closer look but from what I have seen I think it may need to be around for a year or two before really being viable.

[sosocratic]

see also
http://forums.go4reward.com/index.php?topic=196.0

[ResearchPro]

My favorite part:

*Adjusted Default Odds are based on an Experian study of credit card holders who either defaulted (3+ months late) or filed for bankruptcy within a 24 month period from June 2005 to June 2007. Loanio believes that the default odds for peer loans might not be as favorable as the odds for credit card holders in this study and therefore we have generously halved the Experian report's default odds. There are no guarantees that the odds of borrower defaults on this site will be equal or better than the odds above.

Quoted by https://www.loanio.com/pages/borrow_money?b

So, they have no idea of what the real odds are, so they "generously halved" Experian odds for 2 years taken a year ago, right before the crisis started (I'd like to see those odds AFTER Jun07)... Well, why didn't they "generously one-thirded" or "generously one-tenthed" them? Or maybe they should have doubled the odds? Or trippled? Any way they  would get equally worthless numbers as they have now...

[ResearchPro]

Also, I guess this is worth checking:

https://www.loanio.com/statesonmaps

They have a very small limits on interest rates in majority of borrowing-allowed states, like no more then 12-16%. I can say for myself: knowing prosper default rates, there is no way I'd be interested in any loan with such interest. Period.

[replimaster]

Also, I guess this is worth checking:

https://www.loanio.com/statesonmaps

They have a very small limits on interest rates in majority of borrowing-allowed states, like no more then 12-16%. I can say for myself: knowing prosper default rates, there is no way I'd be interested in any loan with such interest. Period.

Didn't see that, Pro. Nasty. Though I did catch N.C. as having a 30% max. Didn't check every state.

If they don't change to higher max rates, they'll have no lenders. Guess it is up to them to see if they want to survive.

[Jason]

Self promoting statistics, much like political statistics are manipulated to reveal desired results.

I saw a commercial that made me laugh.."50% of statistics and be manipulated 100% of the time"

[sosocratic]

Quoted by https://www.loanio.com/pages/borrow_money?b

So, they have no idea of what the real odds are, so they "generously halved" Experian odds for 2 years taken a year ago, right before the crisis started (I'd like to see those odds AFTER Jun07)... Well, why didn't they "generously one-thirded" or "generously one-tenthed" them? Or maybe they should have doubled the odds? Or trippled? Any way they  would get equally worthless numbers as they have now...

What I like is how with several P to P websites up and running they choose to look at credit card data. Why would they not look at the more relevant comparitor?

[ResearchPro]

Didn't see that, Pro. Nasty. Though I did catch N.C. as having a 30% max. Didn't check every state.
If they don't change to higher max rates, they'll have no lenders. Guess it is up to them to see if they want to survive.

Yes, NC is 30% and I think somebody else is 35%, otherwise it's about 15% max. I guess you are qute right mentioning the question of survival, I just don't see how could they possibly exist for a long time having those max rates.

[ResearchPro]

What I like is how with several P to P websites up and running they choose to look at credit card data. Why would they not look at the more relevant comparitor?

I think I understand why - they don't like mentioning the competitors in any form. However, they could indirectly use prosper stats, for example, by "generously cutting" Experian odds to match actual prosper rates, but they didn't do that: their odds are way off from what we see on prosper. And knowing that the experience of prosper's pioneers was disasterous due to relying on Experian rates, I don't think many people would like to get into the same trap twice.

[knowonder]

The website looks clean and simple, similar to prosper.  From a borrower stand point, I like that you can choose between a 3,4, or 5 year term.  from a lender stand point, I'm not sure what I think about that just yet.  More interest or more principle back each month to reinvest?  A longer term would be an easier monthly payment for the borrower but would also be a longer risk for the lender.  Thoughts on their term option?  Would you lend on a 4 or 5 year loan?

[replimaster]

The website looks clean and simple, similar to prosper.  From a borrower stand point, I like that you can choose between a 3,4, or 5 year term.  from a lender stand point, I'm not sure what I think about that just yet.  More interest or more principle back each month to reinvest?  A longer term would be an easier monthly payment for the borrower but would also be a longer risk for the lender.  Thoughts on their term option?  Would you lend on a 4 or 5 year loan?

At this point, I am thinking that length of the the loan is not particularly important to me. What I know for sure is that this would NOT change the type loans I would be willing to fund.

I didn't make that very clear, did I. What I am trying to say is that there are certain loans that meet my basic criteria for even considering them (Back-to-school is 'no', graduating from school 'is 'yes'). The I look at what the borrower has to say, and the financials. At any point during this I might drop it as a 'fundable'. It is during the review of the financials where the payment amount becomes a factor; therefore length-of-loan becomes a factor.

Dave

[deskguy]

 just a brief update on loanio. am seeing loan requests from prosper that were awaiting funding when  the quiet period started. site still leaves a lot to be desired. the number of requests doesn't seem to change much - about 2 pages, or about 40 - and i don't think many are getting funded. prosper, hurry up!
 deskguy