I have been investing in Lending Club for a while now because I had great results with them as a borrower in the past when they helped me to get rid of some VERY high interest rate credit card debt.
I have been investing in this site every month and making a new loan of $25 when I get enough in returns to fund a new loan. My goal has been to receive enough in repayments to fund a new loan every month and so far it looks like things are now working out.
I look at every dollar that goes into Lending Club as money that is lost because I was taught that was how you look at investing. You think of it as gone because at any time you could lose it so you should not count on it. So far I have been lucky to have more wins with my loans than losses, especially with the economy being as bad as it is right now.
I currently have a total of 66 loans as follows:
- In Funding 1
- Issued and Current 46
- Fully paid 15
- Late 16-30 days 0
- Late 31-120 days 1
- Default 0
- Charged off 3
My current rate of return is 5.18% which is still much higher than the interest rate I am getting at ANY bank, even though the risk of losing my money is high. Right now I am just withdrawing the money every week and adding up the totals and then if I get at least $25 in repayments I will fund a new loan the next month. How is your Lending Club Investment working out?
Wow thats such a great idea! How do you make sure you get the money back though?
There is no way to guarantee that you get your money back as it is up to the people to repay you. People with top credit have defaulted as well as those with low credit. The best strategy is to mix up the rates on your loan and invest only what you can afford to lose. I never invest more than $25 in any one loan so that way I spread out the risk.
Awesome returns. Right now I only have 3 loans with 1 that just went into repayment. I hope to slowly add more loans within the next few months.
I just have to remind myself not to chase rates and super risky loans.
Yes just keep a steady approach I would not invest more than $25 in any one loan. This is just to be safe and spread out your money.
Wow, the returns are really good eh.
It sounds interesting but I really don’t trust that kind of programs, too risky!
I started out with lending club way back in early 2009. It seems like forever ago. When you start out with lending club, you have a tendency for your ROR to go very high, and then tank. This is a temporal problem and is not because you picked a lot of bad loans. Your ROR will gradually return to normal levels after about 2 years. Getting a “free loan” every month was my strategy as well. It’s OK, but you really want to keep contributing every month. I did $100 per month and then upped it latter as I got more comfortable. Try to get to 400 loans. The ROR across the board is nice and flat around 9%