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How to Track Lending Club Investments in Quicken

Written by Nickel - 22 Comments

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 - 22 Comments
Filed under: Saving & Investing

About the author: 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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22 Responses to “How to Track Lending Club Investments in Quicken”

  1. 1
    Darin H Says:

    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 :) .

  2. 2
    Min Says:

    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?

  3. 3
    Tony Says:

    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.

  4. 4
    Paul Says:

    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.

  5. 5
    almost there Says:

    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.

  6. 6
    Storch Money Says:

    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.

  7. 7
    Pras Says:

    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.

  8. 8
    Pam Says:

    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.

  9. 9
    Pam Says:

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

  10. 10
    MITBeta @ Don't Feed the Alligators Says:

    Great method.

    I set this up last night, and it took me a while to reconcile my account for this reason: I am in a state that does not allow direct purchases of loans, so I have to use the secondary market at foliofn. Many of these loans sell for some premium or a discount.

    For example, I might pay $26 for a loan with a $25 outstanding principle balance (I’m basically buying the remainder of the interest for $1). So my statement shows that I spent $26, but my “shares” in Quicken have to indicate that the market value is only $25.

    What I did to get around this is to buy $25 worth of shares and indicate $1 as the brokerage fee for the transaction. Now my total market value matches the balance on my statement.

    Thoughts?

  11. 11
    scsigirl Says:

    Although MA has not approved Lending Club for investing, it’s still possible to invest. I have found that DCU.org works as well as INGdirect.com. I’m assuming other online banks not based in MA will also work. It’s easy to find out by entering your banks info and clicking the Verify Account button. If it works you’ll see a Lending Club transaction within a few days. If not, try another bank.

  12. 12
    Gerald Says:

    I’m using this method with Quicken 2010 and it seems to be setup properly and I see the cash amounts and total market value that I expect but my cost basis seems to be the same value as the market value in the graphs. Any ideas what I might be doing wrong?

  13. 13
    Investor Junki Says:

    Who uses Mac Quicken?? That app is so broken it’s not even worth using. Even me who is now completely mac based use Quicken 2009 Windows in a VMWare Fusion instance.

  14. 14
    Nickel Says:

    Works for me, so why change?

  15. 15
    Investor Junkie Says:

    Hmm while it works, it’s not the best solution. It’s more a gripe at Intuit who still treats OS X as the bastard child. Even the latest version of Quicken that just came out.

  16. 16
    Nickel Says:

    “Best solution”? It does everything I need, and I got it for free. That’s the best solution for me. :-)

    But I do agree that Intuit’s Mac support sucks, and their new “Quicken Essentials” (or whatever) is a disaster.

  17. 17
    Don Bechtold Says:

    While you can’t sell the “stock” for $0, there is an action to Declare the Stock Worthless which might provide a cleaner solution.

    I lend on both Prosper and Lending Club, and have yelled at both several times for not having a Quicken download capability.

  18. 18
    JLR Says:

    The 2011 version of Quicken will let you set up a loan account where you are the payee. I am going to see how that works for tracking my lending club loans.

  19. 19
    Craig Says:

    I’ve sold on the trading platform but never bought. If I do, do these loans comingle with my regular Lending Club account? And how do you track the difference in Quicken since there’s a difference between the cost and the cash value?

  20. 20
    Craig Says:

    I’ve sold on the trading platform but never bought. If I do, do these loans comingle with my regular Lending Club account?

    And how do you track the difference in Quicken since there’s a difference between the cost and the cash value?

  21. 21
    top gear Says:

    Post writing is also a excitement, if you be familiar with after that you can write
    if not it is complex to write.

  22. 22
    SK Says:

    How do you account for Defaults and Charge-Offs in Quicken?

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