Monday, January 28, 2013

Lending Club Update

Lending Club is still performing above my expectations.  It's mind boggling to receive an expected double digit interest rate while 10 year treasuries are paying less than 2%.  The best part is the simplicity, I can't imagine anything easier to use.  I can log in, use a saved search, then make an investment in less than a minute.  So easy a third grader could do it.

At this point, I'm considering stepping up contributions.  I've been adding a modest $50/month which has worked well.  With the stock market approaching all time highs coupled with unbelievably low interest rates, lending club is looking more and more attractive.  I think this is where new money will go for my fixed income allocation. 

Sorry preferred stocks, sorry bonds; you do not offer this kind of return.


  1. Wish I could use Lending Club, but unless it's changed recently we can't in Texas. I'm pretty sure we can use the secondary market, but a solid performing loan probably isn't going to be available so it's an unnecessary risk for me.

    Great progress though!

    1. I haven't had to use the secondary market yet, but that's the route I'll go if one of the loans miss a payment. I think you'd be taking on additional risk as many of the secondary loans are in default status. I'm still not 100% sure if this viable longterm. I wouldn't mind having a few grand in it though.

    2. Nice results, CI! I wish I can take higher risk.

      PI: Texas-based here, and I've been using the secondary market for about eight months now. Unfortunately, only a fraction of LC is integrated into the secondary market. And as CI stated, the risk of default status in this market is high. Also, the existing trading platform's filters are rudimentary at best. Combing through notes can also be tedious.

      But with that said, the account is yielding a modest but respectable 9.70% with 100 notes, 3 fully paid, and 0 defaults (so far).

    3. Nice work Ms. Doodles! I've browsed Folio before, wow there are a lot of notes to look at! It sounds like your hard work has paid off though.

  2. I was wondering how you were doing with p2p lending. Those are impressive results!

    I actually opened an account last fall but have yet to contribute. Is your money insured somehow if the company goes out of business? I will be looking to try it out after tax season is over.

    1. Yup, that is a big risk. LC will never be a major part of my retirement plans until they prove to be a viable longterm entity which is profitable. This is what's stated in the FAQs:

      "Lending Club is a financially sound, well-funded, established company led by a seasoned management team. Notwithstanding, to protect investors and borrowers we have taken steps to ensure continuity in the unlikely case Lending Club stops servicing the loans for any reason. Specifically, we have entered into a backup servicing and successor agreement with Portfolio Financial Servicing Co. ( that would ensure the servicing of all issued loans."

      I wouldn't mind if LC took a bigger cut of the profits to make sure this keeps going. Even if they doubled the portion skimmed off the top, the returns would still be solid. I also have concerns about how this works with taxes. The Army will do my taxes for free so I'm going to give them the printouts and let them figure it out. Last year I used Turbo Tax and learned that MLP K-1s aren't a big deal, this year the Army tax center can learn. HAHA!!

  3. I've been with Lending Club for almost three years and currently have little over 10k in the account and yielding 13.67% and rising. Over time I developed a system how to watch notes and spot those which may potentially get into trouble and sell them before they even turn bad. This allowed me to start buying riskier notes and improving my yield rapidly while having zero late notes. However, as the saying goes, never put all your money into one basket, I will not have all my money in LC either. But I am also very impressed with results and actually at the end of this month I will be posting my monthly report on my website too.

    1. Awesome Martin! I'd like to pick your brain on your strategy, you have a lot more LC experience than myself. I'm going to start doubling my deposits and put $100 a month into it.

    2. CI, shoot me an email and I can send you the strategy, since I will not be posting it on my blog. Also I will be posting my results quarterly instead of monthly, but I have an online track of my results on my blog here:

      Hope you allow links, if not, pls edit the post, and delete the link so it posts.


  4. of course likе youг wеb-site but you
    need to test the spellіng on quitе a few of your poѕtѕ.

    A numbег of thеm аre rife with ѕpеlling problеms and
    I іn finding іt vеrу botherѕome to inform the
    rеаlіty neverthеleѕs ӏ ωill suгely come back again.

    My рagе - snowmobile rentals in wisconsin

  5. I'm really enjoying the design and layout of your site. It's a veгy easy on
    the eyeѕ whiсh makes it much morе рleasant foг mе
    to come heгe anԁ visit more oftеn.
    Did you hіrе out a dеѕignег to
    сгeаte your thеme? Exceptional work!

    Feel free to ѕuгf to my ωeblog: basketball wives season 5 cast members

  6. Тhat is а great tip еѕρeсiallу to thοѕe new to thе blogоѕphere.
    Brief but very acсuгate info… Thanks for
    shаring thіѕ one. A must геаԁ pοѕt!

    my ωeb page ... trailer rentals houston texas

  7. Hi! This is my first comment here so I just wanted to giνе
    a quicκ shout out and say I rеallу enjoy reading thгough yοur posts.
    Can you suggest any οther blogs/websites/forums
    that deal wіth thе same subϳects? Thanks!

    Take a look аt my web-sіte :: munds park atv rentals sedona az

  8. Thank you for another vital report. Exactly where else could anybody get that kind of information in this kind of a comprehensive way of writing? I have a presentation incoming week, and I am on the lookout for these info.
    7a loans