Update on My Lending Club Investments

I started investing with Lending Club in the fall of last year and have moved a good amount of money there over 8 months.

For those of you who are new to Lending Club, here’s a quick intro on Lending Club and an update from March to catch you up.

Since I’m not able to invest in a Roth IRA while working in Japan, I decided to move a large chunk of my income to Lending Club to fill my investing void while I’m away. I still hold residence in Illinois and pay taxes in America so I’m eligible to invest with Lending Club.

My Returns After 8 Months

If you look at my update from March, I’ve moved more than $8,000 to my Lending Club account since then – up from just $495. This may seem like a lot – and it is – but I can’t invest in a tax-deferred account like a Roth IRA while in Japan so it’s a much better option than having my $8,000 receive $7 a month in interest in an online savings account.

My return has dropped just 1.2% since March, but at that time I had just 20 notes and I now have 265.

Many of my notes are still “In Funding” since I just made a new investment last week so I’m still relatively new to process. Therefore, my interest payments should start to rise pretty rapidly once all of my notes start receiving interest.

Types of Notes

(click to see specifics)

Lending Club allows you to pick your own notes (loans), but this is time consuming and tedious if you have a lot of notes. The easier option is to create a portfolio that is either conservative, moderate, or aggressive. You pick your rate and they find you notes. You can weed out ones you don’t want, but this step is quick and simple for anyone who doesn’t want to be too hands on with the process.

A notes are safer investments, while G notes are risky. As you can see above, a majority of my notes are B through E.

So far I’ve had just 2 late notes (31-120 days late) and are probably going to default. Out of 169 issued notes that are receiving interest, this brings my default rate to 1.18%, which is below Lending Club’s average of 3% since 2007. The great returns make up for the default notes so I’m happy with the results thus far.

My Portfolio Plan

I wish I had an automated investment plan, but my immediate future (2-5 years) is uncertain right now. In the meantime, I’ll make investments as I see fit while also depositing a large percentage of my income to my savings account and emergency fund with Ally Bank.

With Lending Club, notes are either 36 or 60 months, but they allow you to sell notes to other users if needed. I’ve never used this feature, but it’s nice to know the option is available.

Stay tunes, I’ll have another update at the end of the summer.

*Disclaimer*

I’m an affiliate of Lending Club so if you click on a link on this site and sign up for an account with Lending Club, I’ll get a small percentage back. As you can see above, I use and trust this company and wouldn’t suggest it if I didn’t.

If you’d like to open an account today, click on the banner below and see how you can receive a 9% return on your money.

Have you had any experience with Lending Club? Let me hear your thoughts in the comments!

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