First Lending Club Loan Payments Received

This is just a quick update to say that I’ve received the initial payment on four of the forty Lending Club loans in which I’ve invested. Because these loans funded over a period of weeks, the repayment dates are somewhat staggered, and have just started coming due.

Thus far, everything has been paid on time, though it seems to take a few days beyond the due date for the payments to post to my account. While this is a very promising start, it’ll be awhile before I have a good sense for how things are going.

I’ve included a screenshot below of my current account status. This is actually summary that averages across my two portfolios. As a reminder, I have two $500 portfolios. One is a “low risk” portfolio that pays an average of 9.85%, and the other is a “high risk” portfolio that pays an average of 15.05%.

Of the $3.39 that I’ve received thus far, $2.25 has been principal and 1.14 has been interest. Thus, the total value of my outstanding loans now stands at $997.75. Assuming that things goes as planned, I should receive a little over $33 per month in total payments.

My current plan is to reinvest payments into additional Lending Club loans on an ongoing basis. After crunching the numbers on Lending Club’s historical repayment rates as a function of loan quality, however, I’ll most likely focus shift my focus to higher quality loans going forward.

13 Responses to “First Lending Club Loan Payments Received”

  1. Anonymous

    Keep the updates coming. I’m planning to invest, but can only buy notes on the trading platform at this time as New Jersey residents can’t invest in the loans initially.

  2. Anonymous

    Nice, I’ll definitely look into this. I’ve heard bad things about Prosper but Lending Club seems to have less risk. I’m considering putting $1,000 into various loans there.

  3. Anonymous

    that makes sense, nickel.

    But I still think the 12.45% return is a bit misleading, you will need to reinvest the principal constantly to get the 12.45% return.

    There’s a required level of involvement to get to the 12.45% return on the short term.

    I am still under the opinion that long term diversified stock investment is probably better.

  4. Anonymous

    I’ve been very happy with lendingclub. I only have a couple hundred invested, but am getting 15.47% since I started February. Glad to hear you’re also enjoying it as another investing tool. I’ll be adding more funds as they become available.

  5. Nickel

    Ray: You can sell notes on the secondary market using the LC Note Trading platform. Pricing is based on supply and demand, however, so you’re not necessarily guaranteed to get your money back out in short order.

  6. Anonymous

    Awesome-simply awesome.
    I’ll be watching this post.
    I have a question though. If you need the cash flow what do you do? How do you liquidate?

  7. Nickel

    phung: After thinking about your comment some more, it seems that you’ve neglected to account for that fact that I’m getting a bit of principal back every month. That total monthly payment includes principal plus interest. Because the loan is paid back gradually over time, the principal dwindles (unless you reinvest). Thus, it’s not like I’ll have $1k invested for 36 months. Note that my outstanding principal is already down to $997.75 and I’ve only recv’d payments on the first four loans.

  8. Anonymous

    Hey!

    what is the repayment terms on your loans? is it 3 years or 5?

    i’m curious because if the $33.23 a payment is correct, for the 36 month payment period, you will get $1,196.28 with comes to 196.28 in interest = 20% Interest for 3 Years.

    20% / 3 years = 6.5% annual interest rate; not the weighted average of 12.45% as Lending club suggested.

    Thoughts?

  9. Anonymous

    Good going!
    The trick for me has been to reinvest as soon as I have enough in my cash balance. That keeps the risk down and the return more stable. You seem to have enough in payments to pick one extra loan per month.

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