It’s been a while since I wrote anything on Lending Club. At first I had trouble, since Lending Club doesn’t enable Pennsylvania residents to directly purchase loans . Luckily, I was able to purchase a few notes through their loan exchange system. Now, six months since I started to dip my toes into the Lending Club pool, where do things stand with my investments?
Well, not too bad, overall. One of the loans I purchased has gone more than thirty days without making a payment, which likely means that I won’t get all (or any) of my money back from that particular loan. I was considering selling it when it was first declining, but I was confident that it would work out (at least at first), and then I was (and still am) interested in how much I will get when Lending Club attempts to get the money that is owed. So far, I’m still credited as owning the remaining value of the loan, so I want to know how much I will actually get back.
My current Lending Club portfolio
The other three loans I own are going fine, and should continue to generate income in the near future. The borrowers are paying on time, and as long as that continues, I’ll be happy. Plus, since half of the money I was using for my Lending Club investments came from Lending Club itself, the one loan failure still leaves me with one ‘freebie’ loan as well as the two I bought with my own money. Not a bad return on invested capital.
Lending Club in Review
So, what do I think of my first six months with Lending Club? Overall, I like it. The interface is simple, the loans are a good investment, and they provide nice diversification from my stock mutual funds. The concept is a very good one, lending money to people who need it, making a decent return on your money in the process.
As my finances allow, I’m going to add to my Lending Club portfolio. I’m going to focus on higher quality loans, in the hopes that, by being less risky with my investments, I can avoid having the loans go without being paid back. (The loan that went without being paid back was ranked E, on a scale of A as the best and G as the worst.) By being smarter with my allocation, I’m sure that Lending Club will grow in usefulness as part of my investment portfolio.
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