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Lending Club Update – February 2013

Written by Nickel - 7 Comments

Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.

Lending Club Update

It’s been six months since I last updated the performance of my (dwindling) Lending Club portfolio. As a reminder, we’re in the process of winding down our holdings there. We’re down to less than $700, from roughly $10k at the peak.

It’s been awhile since I’ve updated our Lending Club performance so I thought I’d share some details. As you may be aware, we’ve been winding down our holdings there, though we still have a decent chunk of money there (around $2k) and it’s still performing reasonably well.

Last August our portfolio looked like this:

  • 202 loans are current
  • 205 loans have been paid off
  • 0 loans are currently 16-30 days late
  • 11 loans are currently 30-120 days late
  • 34 loans have defaulted and/or been charged off

and our net annualized return (NAR) stood at 7.1%.

As of now, our portfolio looks like this:

  • 110 loans were current
  • 295 loans had been paid off
  • 1 loans were currently 16-30 days late
  • 6 loans were currently 30-120 days late
  • 40 loans had defaulted and/or been charged off

with a current NAR of 6.7%.

So our returns are continuing to slip and our defaults are continuing to mount, but 6.7% isn’t too shabby, especially when you consider that I’ve pretty much ignored our portfolio for the past two years.

What about you? If you’ve been investing with Lending Club, how are things going? When reporting your results please be sure to give us an idea of how many notes you’re holding and how long you’ve been at it.

Published on February 8th, 2013 - 7 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!

Comments (scroll down to add your own):

  1. Thanks for the update. It seems even with a lot of charge offs you still get a decent NAR. I was concerned it would happen but it seems like if you diversify you’ll still likely beat the nonexistent savings interest rates of today.

    Comment by Anonymous — Feb 9th 2013 @ 11:44 am
  2. Hi there. Looks like you have had quite the run with Lending Club, and you’re right – 6.7% is nothing to sneeze at. I’m on the other side, just getting started. Did you use any of the statistics tools like those offered at NickelSteamroller? I think those are helpful to find borrowers who are less likely to default.

    It’s great to read an article cataloging an exit from Lending Club. Most of the ones I read these days are people getting in.

    Comment by Anonymous — Feb 9th 2013 @ 4:54 pm
  3. Why are you dwindling down your holdings? Is it the losses or potential for more losses that would lower your current rate of return? Or is it just the time to track these investments?

    Comment by Anonymous — Feb 10th 2013 @ 9:51 am
  4. Tony: It’s just too much of a time sink for what I get out of it.

    Comment by Nickel — Feb 10th 2013 @ 10:40 am
  5. Re: “Too much of a time sink”

    I imagine Lending Club will have a feature someday to auto-invest for you. At that point, lending with them will become dramatically more passive.

    Comment by Anonymous — Feb 11th 2013 @ 5:21 pm
  6. Simon: They do offer this now in the form of their PRIME accounts, which is perhaps something I should be looking into… Ding! Idea for another article. 🙂

    Comment by Nickel — Feb 11th 2013 @ 5:37 pm
  7. I should also note that the stated NAR is a bit of an overestimate since it doesn’t account for things like idle cash. I’ve run these numbers in the past, and it typically shaves a few tenths off the NAR. Still a decent number, but not quite as high as advertised.

    Comment by Nickel — Feb 12th 2013 @ 10:59 am

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