Back in February we showed that it is not only China which is troubled by non-performing loans: America’s own nascent private Peer 2 Peer industry was having very similar issues, evident most notably in the books of category “leader” LendingClub, whose write-offs had soared to nearly double the company’s own forecasts.

First, a quick reminder on the industry dynamics over the past year. As we reported last May, P2P loan volume was set to surpass $76 billion in 2015 and one driver of the boom is demand from the likes of BlackRock (BLK), Morgan Stanley (MS), and Goldman (GS), who had all underwritten securitizations of loans originated on P2P platforms like LendingClub, the number one player in the space. For those unfamiliar, P2P loans create the conditions whereby borrowers can refi high-interest debt via personal loans, transferring credit risk from large financial institutions to private lenders in the process.

It’s not entirely clear what the implications of that shift might ultimately be, especially if the market continues to grow rapidly. “One thing,” we said, “is clear”: Using a relatively low-interest P2P loan to pay off a high-interest credit card is no different in principle than using a new credit card that comes with a teaser rate to pay off an old credit card. In the end, the borrower will very often max out the old card again and thus end up with twice the original amount of debt.

The same dynamic applies to P2P lending. “So what’s to stop consumers from levering their credit cards back up?” Bloomberg asked last year. “Such behavior could spell bad news for investors in P2P loans if an interest rate hike or an unforeseen shock pressures borrowers,” Michael Tarkan, an equities analyst at Compass Point Research said.

“We’ve created a mechanism to refinance a credit card into an unsecured personal loan,” he added. “This may prove to be a superior model, but we just don’t know because it hasn’t been tested yet through a full credit cycle.”

No, we “just don’t know”, but we may be about to find out because a new presentation from LendingClub indicates that the cracks are starting to show. “LC Advisors, an investment adviser owned by LendingClub that helps people buy loans arranged by the company, said last week in a presentation that some of the debt is ‘underperforming vs. expectations,’” Bloomberg wrote on Friday. “A chart on one of the slides shows that write-off rates for a portion of five-year LendingClub loans were roughly 7 percent to 8 percent, compared with a forecast range of around 4 percent to 6 percent.” Here’s the slide in question: