After 4 months of using Lending Club, I’m giving my first report of my progress. My goal is to achieve a greater than 13% ROI, and so far, I’m well ahead of that goal.
I aim to reduce delinquencies by using smart criteria for picking loans, and it appears to have paid off.
15.85% Interest Rate
I couldn’t be happier about this, and I’m so encouraged that I actually sold a few of my 11-12% loans so that I could have the cash to invest in loans with higher interest rates.
Here’s a quick snapshot of my loans:
Issued & Current – 169 loans for $5,028
Fully Paid – 4 loans for $100
Late 31 – 120 Days – 1 loan for $24
As you can see, almost all of my loans are in good standing, with only one being late. That loan had a missed payment in December, but I’m hoping it gets back on track as the payment is currently ‘processing.’ Of course, I am prepared for the worst. Let’s assume that he goes into default: that is still only 1 of 174 loans, about 0.58% default rate, far better than the 3% average for Lending Club.
Of course, having loans paid off early hurts my performance, but since that first bump, I’ve been a little more careful not to pick borrowers who are too good.
Future Lending Club Plans
I’m going to be investing the $125 I have in available cash this week so that it’s not sitting there earning nothing. My goal is not to have idle cash sitting around for more than a week, and since I can invest in a loan for as little as $25, I’ve been lagging in January.
Overall, I’m extremely pleased with my performance and I hope to keep up the good work!