It has been a while since I last invested in LendingClub. Now that I have a well-funded retirement account and some extra money to invest, I want to give peer-to-peer lending another try. For this experiment, I created a $1,000 investment account with LendingClub and I’ll be updating you on the progress on a regular basis.
If you don’t know what LendingClub is, it’s an online platform that allows people to come together and either lend or borrow money. As an investor, you can lend out as little as $25 per loan to different borrowers; and as a borrower, you can borrow up to $35,000 from the platform. For more information visit LendingClub and check out these articles:
I already have a LendingClub account, so it was an easy process for me to deposit $1,000 into the account. The deposit does take a few days to show up in my LC account (this is something they can certainly improve upon). Anyway, once the fund was available, I just use their Build a Portfolio tool (just click “Invest”).
On this page, I was presented with 3 options:
I made a few adjustments to the recommended porfolio just so that I can see how the rate changes:
At the end, my Build a Portfolio page looks something like this:
I completed the process and saved the porfolio as 2013 Portfolio A. One thing you will realized quickly is that not all loans will be funded, so you will have to go through this process a few times to invest all of your money.
This is what my intial order looked like when I placed the initial order:
After several attempts to get the porfolio fully invested, this is what it currently looks like:
I don’t expect the investment to yield 16.70% based on the Weighted Average Rate above because some loans will default (e.g., the borrower stop paying altogether). I think I’ll be happy with a rate of return around 6-9% and thrilled if I ended up with anything higher than 9%. I will update this article about a month from now.
Until then, please share your thoughts in the comment section below.