Tuesday, July 14, 2009

First Lending Club payment still "Processing" after 2 days

Since I posted yesterday about the first payment on my first Lending Club investment loan which was due two days ago, there has been no change in status, other than that accrued interest is another day higher.

It could take up to four business days for the proceeds from the ACH debit of the borrowers bank account to be finally posted to my Lending Club account.

In short, everything is fine so far.

So, the wait for final posting of the payment continues.

I was doing some more reading on the Lending Club web site and found the section on Service Charge:

Lending Club charges a service charge to lenders. The service charge is one percent (1%) of each payment from the borrowers.

On the Rates and Fees page it also says:

Lending Club charges a service charge to lenders for servicing loans, making Note payments and maintaining the accounts. The service charge paid by lenders is one percent (1%) of all amounts paid by the borrowers to Lending Club. The 1% service charge impacts the lenders' annual returns by less than 1% because it is not an annual charge.

So, if my monthly payment is $0.83, presumably that 1% charge is $0.0083 or rounded up to $0.01, so my net payment would be $0.82. Or something like that. My calculation shows that to be about $0.36 over three years or $0.12 per year, or about 0.48% per year of the original balance. But, the balance decline every month, so the service "charge" as a fraction of the interest rate varies (increases.) This is the theory. Have to wait and see how it actually plays out (and pays out!).

-- Jack Krupansky


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