Wednesday, February 17, 2010

All of my recent Lending Club investment loans have been issued

Two more of my recent investment loans with Lending Club reached full funding and were issued on Monday, and then overnight the remaining one of the batch of twelve was issued. All twelve have been issued. That is the best of have done since I started using Lending Club last June. Usually, there are a couple which run into some sort of trouble, such as failure to get the paperwork in order for income verification. This time, I chose only loans that had already been "Approved."

My current Net Annualized Return with Lending Club is 14.45%, but that is before the latest batch of loan notes begins to make payments. My target is to be in the 15% to 15.5% range, which is where I perceive the "sweet spot" to be between too-conservative and maybe a little too-risky. To-date, I have had zero delinquencies, zero missed payments, zero late payments.

All Lending Club loans are for three years, with thirty six monthly payments which are made automatically via ACH transfer from the borrower's bank account. These are primarily consumer loans, but some are for people starting small businesses. Personally, I stick with the pure-consumer loans - starting new businesses is a very risky proposition, more risky than justified by a 15% return, in my opinion.

I am still treating my "investment" in Lending Club loans as an experiment, and a very small experiment at that. It is a form of investing with which I have no previous experience. To-date, my experiences with Lending Club have been entirely positive, but I need to experience a longer portion of the full lending cycle, not to mention the risks inherent in this shaky economy. That said, I intend to increase the size of my experiment in the coming months. My next milestone will be the see each of the latest batch of loans make their initial payments by about a month from now. At that point I may consider doubling the size of my experiment again, depending on my own outlook for work in April.

-- Jack Krupansky


At 11:18 AM EST , Anonymous Roy said...


Thanks for lots of information! I was just wondering if you could elaborate on how long you normally see the ACH payments taking? I just started in Lending Club in January, and my loans are coming due for their first payment. Some were scheduled on Feb. 11th, and it says the payment is processing... but it's been 6 days, 4-5 have been business days depending on if the 11th counts!

I want to reinvest as quickly as possible, and never really took into account that I would essentially have money pending for an entire week, thus unable to reinvest and capitalize as quickly as I had first thought!

Thanks again for all the info!!


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