Hmmm… I just realized that it’s been awhile since I last updated my Lending Club progress. With that in mind, I thought I’d share some data to bring everyone back up to speed. For starters, my net annualized return (NAR) stands at 8.92%, which is a bit lower than where I closed out 2010.
Why the drop? Well, unfortunately, I suffered another default. When I last updated my Lending Club portfolio at the end of 2010, it looked like this:
- 395 loans are current
- 41 loans have been paid off early
- 1 loan is currently 16-30 days late
- 8 loans are currently 30-120 days late
- 7 loans have defaulted and/or been charged off
As of right now, it looks like this:
- 363 loans are current
- 64 loans have been paid off early
- 4 loan is currently 16-30 days late
- 13 loans are currently 30-120 days late
- 8 loans have defaulted and/or been charged off
As you can see, 23 more borrowers have paid off their loans early, but I’ve also seen a shift toward more loans being late, with 4 being slightly late and 13 being severely late. Based on past experience, it’s unlikely that those severely late loans will get back on track, so I’m fully expecting additional defaults.
If you total up the numbers listed above, you’ll notice that my total number of notes hasn’t changed since the beginning of the year. The main reason for this is that I’ve gotten too busy to keep up with the note picking, so I’ve just been transferring my cash out to our savings account every once in awhile.
Going forward, I expect my returns to dip a bit further – not just because I have more notes showing up as late, but also because the average age of my portfolio is still increasing, especially since I haven’t been adding new notes. As notes get older, the likelihood of default increases (at least in a cumulative sense), so my default rate will presumably increase at least a bit further in the coming months.
So there you have it… My current Lending Club performance in a nutshell. If you’ve been investing with Lending Club, I’d love to hear about your experiences.