Lending Club Loan Data Analytics Part 3, based on 4 Mn+ Data Points

Continuing in the series after the hugely popular Parts 1 & 2 of the exclusive in-depth analysis of the loan data of Lending Club, we present some additional insights based on the same data. In the previous two articles, we had covered certain aspects of how loans work in Lending Club. In this article, we bring insights around additional factors attributed to loan applications and how loans and interest are paid off.

Relationship between Loan Amount and Annual Income

The following illustration is a bubble chart of loan amounts vs annual income. There seems to be a healthy direct relationship between loan amount and annual income. After a point the loan amount limit causes steep rise. Two-thirds of the loans are in the range of 40 to 100 thousand dollars.

Total Loan distribution in Loan Amount/Annual Income Buckets

3 quintiles in this distribution account for 99% of total loans. The following illustration of an interactive chart shows that, for example, in 54.6% of all loans, the loan amount accounts for 0-20% of the annual income.

How many Loans were Fully Paid/Charged Off among the 3 Loan Amount/Annual Income Buckets?

The following illustration of an interactive chart shows the percentage of loans that were fully paid/charged off in the buckets as mentioned in the previous chart. It is quite interesting to note that the charged off percentage increases with an increase in the loan amount as as a percent of annual income.

The Impact of Loan Verification on Loans getting Charged Off

There is a higher proportion of charge offs in verified loans. This trend is also seen across grades and in fact, it seems to get increasingly polarized as we move to lower grades.

Impact of Income on Loans getting Charged Off

The following illustration of an interactive chart highlights that with increase in income, the charge off % decreases.

Impact of Loan Term on Loans getting Charged Off

The following illustration of an interactive chart highlights that there are two main loan terms offered viz. 36 and 60 months. It’s interesting to see that in all these cases the charged off rate is always higher for the longer term loans.

Note: The charts and graphics in this article have been taken from a series of studies prepared by our Data Sciences team. In this particular case, the Data Sciences team worked on datasets of Lending Club’s loan data to come up with the insights and charts. If you have a custom requirement to gain further insights into Lending Club’s lending services, please use this form. You can also reach out to us for any other custom analytics requirements.