HomePersonal FinanceLending Club Returns at 15.85% in January 2012

Lending Club Returns at 15.85% in January 2012

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!



  1. How specific are your parameters to achieve returns like these? Is there potential for a lot of scaling, or is it something that would always have to be a small part of a total investment portfolio?

    LC supposedly does like $300MM in loans per year, of which a minority are high interest.

    So, I guess my question is whether or not you could continue to build your LC portfolio alongside a traditional retirement portfolio or whether you’d have to cap its size at some point so as not to dilute quality/performance.

    I’ve been trying to learn more about this, but it seems that everyone who documents their progress has like $500k in a 401k then $10,000 in LC, which doesn’t do a whole lot to instill confidence.

    • @JT, It’s definitely scalable. I only invest $25 per loan. If I had twice as much money, I’d simply invest $50 per loan and would expect to see the same returns.

      I’ve never had any trouble finding loans to invest in, and in fact, I investing all $5,000 in about a month.

      The downside is that it takes awhile to review each loan individually. If you want to invest $100+ in each loan, you can do it, but it’s not quite as easy as putting in a stock trade I guess.

      Peter at has $100,000 in Lending Club if I’m not mistaken.

      • @Daniel, thanks for giving a frame of reference with the time it takes to place $5,000 in loans. It definitely makes sense that you could throw in $50 in any particular loan to double down. Only loss is that you can’t go back and add more to investments that you’ve identified to be good risks. That’s only a minor consideration if you can screen for potential opportunities fairly quickly.

        I’ll check out From first glance, I’m not sure I’ve looked around there yet. Thanks!

    • @Corey @ Passive Income to Retire, It’s funny, I see this as not a very risky investment. Those who invest more money see better returns. Plus, we shouldn’t expect to see big variations based on external market factors. I assume you invest in the stock market? Seems a lot riskier to me.

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