Comments on: Lending Club – July 2009 Performance

By: Aaron

Aaron — Wed, 19 Aug 2009 19:35:07 +0000

I’m a lender with LendingClub and have had very good results so far. In the few instances where loans go into “Grace Period” (less than 15 days late), I’ve been able to sell them in the secondary market, usually for a 10-15% discount. Despite selling these loans, I’ve made a 12% annual return thus far.

But for the first time, a Grace Period loan of mine has failed to sell and is now in the 15-30 days late period. I’ve reduce the price some more (about 25% off face value) and am still trying to sell it.

As I try to figure out how much further to reduce the price now (before waiting until it is more than 30 days late), I wonder whether other lenders have had loans go into collection and (if so) whether they ever got any money back from LendingClub.

If someone declares bankruptcy, what are the odds you’ll get anything back on an (unsecured) LendingClub loan?

Sincerely,
Aaron

By: Daniel Lieberman

Daniel Lieberman — Wed, 19 Aug 2009 01:28:28 +0000

Don’t know if you saw this, but this is an article about a UK business rather similar to Lending Club.

http://www.guardian.co.uk/comm.....redit-zopa

By: almost there

almost there — Mon, 17 Aug 2009 14:25:37 +0000

I signed up this month and shifted my cds getting less than 5% to the a and b risk so hope to see over 8% after their cut. I also signed up for the prime account and hope to see a 10% after their cut return.

By: Harry

Harry — Sat, 15 Aug 2009 14:55:43 +0000

As with any investing, there are certain risks with lending clubs. Spreading your risk is always the best tip.

By: Nickel

Nickel — Fri, 14 Aug 2009 01:37:33 +0000

Carole: I think that part of the reason that they’re being sold at a markup is that they’re “proven” (i.e., the borrowers have already made a few payments so you know they’re not total deadbeats). Yes, it cuts into the return, but it also (arguably) reduces the risk.

The ones being sold at a discount are for the opposite reason. There’s evidence of trouble, so they’re no longer worth face value.

By: carole

carole — Fri, 14 Aug 2009 01:22:10 +0000

I’m one of those that can only buy on the secondary market, but most of those loans are being sold at a markup, which really cuts back on the ROI. The few that weren’t were already considerably overdue. Plus I can’t get any information on the original loan other than the title.

By: Eric

Eric — Thu, 13 Aug 2009 22:29:21 +0000

Mine is still going strong too

By: Nickel

Nickel — Thu, 13 Aug 2009 21:34:20 +0000

As I understand it, they have to get approval from each to sell notes to their residents. FWIW, many of the states that don’t allow direct investment in notes *do* allow you to buy on the secondary market.

By: Ryan

Ryan — Thu, 13 Aug 2009 21:32:04 +0000

Any idea why half the states don’t allow their citizens to participate in the exchange of these notes?