Loan VolumeAs the chart below shows, the volume of loan listings goes down during last week of the month. As I posted in my previous post Month-end Rush to Issue Loans at Lending Club, there is a pattern of high volume of loans issued at the end of the month. It is possible that one team within Lending Club manages both listing and issuing loans at the end of the month, the group's focus shifts from listing to issuing loans. But then, I don't have insights into inner workings of Lending Club organization.
Also, as Peter Renton commented and my previous post Lending Club Loan Application Date - When to Invest? mentioned, the spike in volume of loan issued has shifted to start of the month in 2012. There doesn't appear to be any such shift in loan volume by Loan Listing Date in 2012.
The chart above shows the volume of loan listings by week of the year. The rapid increase in the volume of loan listing masks any discernible patterns in the chart except that there is a spike in loan listings after the Thanksgiving (getting ready to shop for Christmas) and after the new year (Holiday shopping bills start showing up).
Loan StatusThe chart below shows, the status of loans based on loan listing date by the day of the month. I observed two interesting patterns in this chart:
- The Late (16 -30 days) status only appears for loans that were listed later in the month.
- The In Grace Period status mostly appears for loans that were listed earlier in the month.
The chart below shows, the status of loans based on loan listing date by the week of the year. This chart is as confounding as the previous one.
- Both loans with Late (16 - 30 days) and loans with In Grace Period status appear to be listed on certain weeks within the year for two to three weeks consecutively.
- The loans with In Grace Period status appear to be listed right after the loans with Late (16 - 30 days) status were listed.
At this point, I didn't have faintest of idea on how to explain these patterns in loans with Late (16 - 30 days) and In Grace Period status. Then, I decided to chart for Loan defaults by day of the month and by week number using Application Expiration Date to compare if the pattern for loans with Late (16 - 30 days) and In Grace Period status change or shift.
As the chart below shows, the loans with Late (16 - 30 days) and In Grace Period status have swapped the positions approximately for Application Expiration Date when charted by the day of the month.
As the chart below shows, the loans with Late (16 -30 days) and In Grace Period status also have swapped positions approximately for Application Expiration Date when charted by the week of the year.
These patterns exist for both Application Listing Date and Application Expiration Date. As listing and expiration date are approximately two weeks apart and the pattern shift is approximately two weeks too, these patterns appears to be a factor of when the historical loan data file was last updated. I am working with a data file that was up to date as of end of month. I am sure a data file that was up to date as of middle of month will show patterns for loan with status (16 - 30 days) and In Grace Period that is reverse of patterns shown above.
Key TakeawayOriginally, I was as lost in explaining the patterns in the above charts for Application Listing Date as I was after watching the series finale of TV series LOST!. But after reviewing the similar charts for Application Expiration Date, I am confident that the patterns are neither related to anything specific with loans nor Lending Club process but artifact from transitioning of In Grace Period status to Late (16 - 30 days) status during the month and the time of month when the historical loan data file was updated.
This particular analysis shows that not necessarily all data analysis result in insights. Sometime observed patterns can be result of how and when data was collected.
By all means, if you have any other ideas, please share using comments or direct messages. Thank you for reading.
Checkout view of a venture capitalist on P2P Lending - Grass Roots Capitalism: P2P Lending.
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