How to Track Lending Club Investments in Quicken

Written by Nickel - 9 Comments

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I’m now convinced that investing through Lending Club is (at least for me) more than just a passing fancy. As such, I decided that it was high time to start tracking things in Quicken.

I’ve actually been avoiding this task because I’ve already invested in over 100 loans, and the prospect of tracking so many independent investments is a bit daunting. But then it hit me… There’s no real reason that I have to track every loan separately.

The system that I’ve settled on is similar to my strategy for tracking CDs with Quicken. I update the data based on my monthly statements, and use just a single “meta-security” instead of tracking each loan individually.

Here’s a quick rundown of the initial setup*:

  • Create a new “brokerage” account in Quicken
  • Create a new security with a value of $1/share (I called mine “LC loans“)
  • Transfer (XFR) your starting (cash) balance into the account

And here’s what I do at the end of each month:

  • Transfer (XFR) funds in or out of your account to reflect any real-world transfers
  • Buy shares of “LC Loans” in a dollar amount equal to the total of any new notes issued during the month (this reduces your cash balance)
  • Sell shares of “LC Loans” in a dollar amount equal to any principal repayments for the month (this increases cash balance)
  • Record you total interest payments for the month as dividends (DIV) on your “LC Loans” shares (this increases cash balance)
  • Record your investment fees for the month as a miscellaneous (MISC) transaction (this reduces your cash balance)

While you’ll lose the ability to track individual loans, this system is very quick and easy to maintain, and still gives you accurate performance numbers on an account-wide basis. Another benefit is that this approach accounts for the performance drag created by your uninvested cash balance.

For all transactions, I use an effective date of the last day of the month. The order in which you record the individual transactions doesn’t really matter since everything will balance out on that same day.

What about you?

If you’re a Lending Club investor, how do you track your performance? Do you just rely on the Lending Club interface? Or do you do something more? Maybe Quicken or a spreadsheet?

*Note: These notes are based on Quicken 2007 on a Mac, so there might be some subtle differences if you’re using a different version. The overall approach, however, should remain the same.

Published on August 28th, 2009 - 9 Comments
Filed under: Saving & Investing
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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Comments (scroll down to add your own):

  1. I just started an account with Lending Club, I’m going to track it as an overall savings account. Starting balance plus interest at the end of each month. I don’t know how I’ll account for any loans that go bad yet – hopefully I won’t have any :) .

    Comment by Darin H — Aug 28th 2009 @ 8:46 am

  2. I really want to start using Lending Club, but being a MA resident, it’s not an option for me. Does anyone else living in Massachusetts know of any viable alternatives?

    Comment by Min — Aug 28th 2009 @ 10:05 am

  3. This is the same way I’ve been tracking my Prosper Loans. In fact by using Quicken I quickly discovered that the real rate of return on my investment has been around 3% and not 12.5% as stated on the Prosper website.

    Prosper calculates the return based on the average APR for each loan outstanding. It doesn’t take into account fees, defaulted loans, charge-offs, etc. A have a total of 87 loans and 7 have defaulted so far. I was investing in a “Moderate Portfolio” which was supposed to be low risk.

    I decided not to invest any more money in Prosper, hopefully Lending Club has a better record.

    Comment by Tony — Aug 28th 2009 @ 10:21 am

  4. Lending Club does indeed seem to have a better record, largely because they have a more rigorous screening process. I believe that as of a few days ago, only two “A” rated loans have ever entered default, out of about 1000.

    Comment by Paul — Aug 28th 2009 @ 3:33 pm

  5. I just opened my account and will track it like comment #1. I found it annoying that I had to go back and reinvest funds that expired for what ever reason or were rejected so I set up a prime account and they reinvest the funds. Today they invested x amount to take the cash below minimum investment criteria and by tonight there was 2x in the cash account from rejected/expired notes.

    Comment by almost there — Aug 29th 2009 @ 2:01 am

  6. Somewhat off-topic (because I’m lazy and don’t use Quicken) but your posts about Lending Club have been very interesting and informative. Today I opened an account as an investor and I will be trying to use some of the insight you have provided to maximize results.

    Thanks for writing about this subject and I look forward to future posts.

    Comment by Storch Money — Aug 29th 2009 @ 5:46 pm

  7. Min,

    Did you look at their note trading platform? I’m in AZ and we can’t invest in loans directly, but the trading platform allows me to buy (and sell) notes.

    Comment by Pras — Aug 30th 2009 @ 7:21 pm

  8. I’d be happier with Lending Club if they computed my real rate of return after losses from unpaid accounts. The rate shown fails to account for losses of principal and interest.

    Comment by Pam — Sep 1st 2009 @ 9:06 pm

  9. If they only have 2 loans out of 1000 in default, how did I end up with both of them?

    Comment by Pam — Sep 1st 2009 @ 9:07 pm

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