Investing With Lending Club (Aug '13 Update)

by Michael on Sep 19, 2013

Lending Club Logo

I’m a bit late with this due to my travel schedule, but I wanted to provide a quick update with respect to my Lending Club investment progress as of the end of last month (August 2013).

By the end of the month, I had fully committed my $1k monthly allotment, with $550 (11 notes) having been invested, and another $450 (9 notes) having been committed to notes that hadn’t yet been issued.

When added to my initial $1,500 investment, this brought my total of outstanding principal to $2,050 (41 notes) with a total of $450 committed. These 41 notes included mostly (35) Grade C notes, with a handful of Grade D (5) and E (1) notes.

Related: My Lending Club Review and a peak at my loan filters…

The overall average interest rate on these 41 notes was 15.57%, though this is an overstatement because it doesn’t account for the likely occurrence of defaults. When these happen, my (effective) earnings will take a hit.

As of the end of August, I hadn’t yet received any loan payments and thus Lending Club hadn’t yet provided me with an official Net Annualized Return (NAR). Since that time, however, the initial payments have begun rolling in, and my NAR stands at 16.63% as of this writing. Not bad, huh?

Once again, this number is somewhat inflated because a fraction of my notes will undoubtedly default in the long run. As I’ve noted in the past, my goal is to achieve long-term returns in the 10-12% range. Feasible? Only time will tell.

During September, I’ve been working to commit my next $1k monthly allotment, though this has been slowed by my travels and the associated spotty internet access. But that money is almost fully committed at this point, so it’s all good.

If you want to try it out yourself, you can get started here.

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