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My Lending Club Account Performance Update 2

February 20, 2010 | Investing | My Ramblings | 8 Comments

My previous update of my Lending Club Account Performance was back in September 30, 2009.  How time flies by so quickly.  I promised then to do periodic updates of my account performance.

Since then I’ve deposited an additional $20,000 in my account because Lending Club was paying a 1% bonus to deposit and invest the money by the end of December 2009. That’s another cool $200 in bonus I couldn’t resist.  

Since I’ve invested in Lending Club, loan payments to date total $3,041.23 with zero late payments or loan defaults.  That is very good news.  I hope the trend continues.

I have only invested in A, B and C borrowers which are the lowest risk borrowers; however, the return is lower than the more risky borrowers (D, E, F, and G).

I currently have 353 outstanding notes (loans to 353 individuals) ranging from $25 to $250. As the money is paid back I’ve reinvested it to other borrowers.

Since I started funding notes in August 2009, I’ve earned $669.78 in interest, but with bonuses I’ve earned a total of $1,492.20.  The net annualized return estimated is currently almost 11%.  See screenshot below of account summary.

Update: Lending Club is offer $25 for free when you sign-up as an investor at no risk.  You can use the $25 to try out P2P lending with no future obligation.  There is nothing for you to deposit and you can lend the $25 immediately.

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8 Comments to “My Lending Club Account Performance Update 2”

  1. InvestingLara
    10:36 am on February 21st, 2010

    Looks like a great investment, however, you should expect some defaults. The fact that you haven’t only says you’ve not invested for long. I’m an old timer (2 yrs almost) and I have about 23 out of almost 500 notes. Of course, I’ve invested in some high risk loans, and I have learned how to avoid some obvious hopeless cases, but my point is, unless you are a great loan reviewer, you need to be prepared for some defaults. I’m still making 8.2% after defaults, which is a great return.

  2. Dan B
    8:04 pm on March 6th, 2010

    InvestingLara is absolutely correct. Keep in mind that 2/3 of your balance was invested in Dec. 2009. Which means that a sizeable number of those invested loans didn’t even get issued until early January. Which means that their 1st payment wasn’t until early February 2010. In other words 66% of your loans haven’t had much of a chance to go bad. As for the 11% return, keep in mind that Lending Club doesn’t take into account the time that cash sits in your account waiting to be invested……nor does it take into account the time spent in funding (8-13 days), nor does it take into account the time it takes to get issued after it’s fully funded (anywhere from 2-10 days no bs) Nor does it take into account funds that don’t fund, or get rejected by then or by the borrower. That 11% is ONLY from the time that the loan is issued. I guarantee you that there was deposited money sitting in your account not earning any interest a month after you deposited……..maybe even 6 weeks after. You can take 1-1.5% off the top of that 11% just to account for all of the above. And how about loans that have been paid back early. If you have 353 notes out there you must have had some early pays. I have 201 notes & I’ve had 7 paid up. Did you know that Lending Club takes 1% of your principal on early pays?

  3. Dan B
    8:12 pm on March 6th, 2010

    Continued from above……..And I started with Lending Club in late November 2009. So I’ve had 7 people who used their loan as a “bridge loan” for 2 months & then paid it back. The 1% Lending Club takes off of it wipes out any interest on those loans if you count the 3 weeks they took to fund & get issued. Bottom line…….despite all this & other negs that I haven’t shared, I;m ok with things. BUT that’s because you can’t get more than 2-3% on a 3yr CD. That will change & when it does new investor money will dry up for Lending Club. I’d say there’s a 50-50 chance Lending Club won’t be around 3 yrs from now.

  4. Patrick
    8:12 pm on March 6th, 2010

    Thanks for the feedback Dan. You make some really good points. Finally had my first default of $25 and 1 late payment. Regardless, so far it seems much better than having the money sitting in the bank and less riskier than the stock market.

  5. Dan B
    9:14 pm on March 6th, 2010

    Patrick…….I’ve shared (using more diplomatic language) these concerns with Lending Club. Do you know what their response was?……..Silence.
    Here’s a trivia question for you. Name the company that has borrowed & continues to borrow substantial cash (low 8 figures) at 10%, then routinely turns around & lends a good chunk of that money out at 12-15%??

  6. Patrick
    9:35 pm on March 6th, 2010

    Lending Club??

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