I have been investing with Lending Club for a while now and my account has been doing pretty good so far. When I started off I was reinvesting all the money I made, as well as adding in $25 a month to fund new loans.
My goal was to get enough loans that were being repaid so I could get to the point where I was earning enough to fund a new loan every month. I am pleased to say that over the last few months I have earned enough in repayments to fund a new loan every month so I have stopped placing the additional $25 a month from my ING account.
Part of my decision to change was simply the fact that I do not have regular income now so I need to focus on cutting out things from the budget that are not absolutely necessary. It was okay to invest in this system while I had income, and while I am getting returns on my investment it is still tying up a lot of my cash for a relatively small return.
The other part of my decision was that I actually achieved my goal of having the loan repayments generate enough to produce a new loan. So since I do not have tons of cash to invest I can just let the monthly repayments fund new loans, even though it is only generating one new loan per month.
By using this strategy I can still grow my base as a lender, but without having any additional outlay of my funds. This is similar to a dividend reinvesting plan and I will see how it works out in the next few months.
I will now rely solely on the income received for the month and use that to fund a new loan every month and then withdraw whatever is left at the end as income for that month. It might only be $5 or so but that will still be a positive flow of cash for the month, even as I continue to fund new loans and hopefully get better returns.
I also plan on investing in a few loans with higher risk profiles as those are not necessarily the loans that go into default. By picking loans with higher profiles I will be able to earn more interest as the loans are repaid.
So remember if you are interested in learning more about Lending Club Investing all you have to do is go to their site and sign up to be an investor. Of course you could always use one of my affiliate links on the site and I will earn a bonus or commission as well!!! Either way you will have an additional outlet for your investments and someone somewhere will benefit from getting a new investor in his or her loan.
And remember I am not only an investor at Lending Club but I was also a borrower there so I have seen the program from both sides!!!!!
What is your Lending Club strategy? Have you changed the way you invest now from the way you did things when you first started?
I have never invested with a lending club but I like the sound of your approach. Having a goal of earning enough each month to invest in a new loan sounds very attainable, and might be enough to get me interested. Its just hard to find the time to learn enough to make this more than just another gamble.
You don’t need to ‘learn’ much to get into this. I did not research loans and trends or any of that stuff when I began. I simply clicked the filters that said the highest credit score, smallest loan amount and zero defaults and then clicked on the loan that had the shortest time left on funding. Yes it is a big risk but I simply chose ‘safe’ loans with low interest rates and did not bother with all the analysis that some people do.
I don’t fully understand the lending club. Who does the money primarily go to? Just other individuals or businesses or??
The money goes to individuals who have applied for a loan.
nice read. had no idea of any such thing before