During the month of November, my net annualized return with Lending Club took a bit of a tumble. The reason for this is that the loan from my “High Risk” portfolio that had gone into default was finally written off. Once this happened, my net annualized returns dipped into the high 8% range, though they’ve since recovered to just shy of 9.2%.
In other news, two more loans showed up as late during November. In one case, Lending Club has worked with the borrower to get them on a payment plan (I’m still investigating exactly what this means) and in the other case, the borrower has subsequently made some partial payments.
Because these loans were being paid on time and in full for several months before getting into trouble, and because the borrowers appear to still be interested in making good on their obligations, I remain cautiously optimistic that they will get back on track. I have, however, activate my FOLIOfn account (accessible through the Lending Club login) and might try my hand at selling one or both of these at a discount on the secondary market.
Once again, I had a couple of borrowers pay off their loans early, so I’ve re-deployed that cash (along with some additional funds that I’ve added to my account). I now have around 180 active loans with a net annualized return (as noted of above) of roughly 9.2%.
As before, I’m planning more of the same… I’ll be steadily adding money every month, and reinvesting the repayments as they come in. I’ve already changed some of my loan selection criteria, and will be looking closely at the three troubled loans in hopes of identify additional risk factors that can be avoided in the future.
Look for a followup post in the not too distant future where I talk about what exactly I’m looking for when I select Lending Club loans. As always, if you’ve been investing with Lending Club, I’d love to hear about your experiences in the comments section.