57%B, 40%C, 3%D
I've been investing with Lending Club for about 9 months now... taking it slow. I decided not to get overly excited, not to jump in feet first. Maybe I should have. This is working.
I have yet to have any notes miss a payment, have not collected any type of late fee, or have anything negative happen at all. My only observation is that notes are being funded faster and faster. I think the word about LC is out. It is becoming harder and harder to put money to work. My screen is pretty strict, I only lend to the best available borrowers. In a way I feel like the notes I invest in should be rated "A", but somehow slip through the cracks and pay a "B" or "C" interest rate. I think that is what's going on here.
Sometimes nothing will show up in my screen for weeks at a time. I've had to loosen my standards a bit here and there to get money invested. An undesirable reality. But in the end, the people I lend to are making their payments and I get to collect interest. Pretty neat!
Still I wonder if LC will be around 20 years from now. What will happen when interest rates rise? When will the defaults start to happen? How financially stable is Lending Club itself?
I can't deny that 14% interest is remarkable!