Last month I put $2,500 into LendingClub. I select automated
investing with a mix that's just below 'safe, lower returns', going for
'still safe, better returns'. I opted to split my money into 100 x $25
notes. These were picked up relatively quickly, and loans were issued
usually within a week. There's one note hanging, stuck in Review. I'm
not sure what's going on there. According to LendingClub documentation
the loan can sit in that status up to 30 days before it's either issued,
or canceled. If canceled, my $25 will be released and automatically put
towards another loan that matches my investment mix target.
Since
no payments have been due yet, all notes are 'current'. The first
payments are expected on November 4th, and each day thereafter some
money is expected to come in. Thus far, on paper, my account has accrued
just over $25 in interest. If everyone pays up, I'll also get about $50
in principal back, or a total payment of $75. This will get invested in
new notes automatically. I tweaked my new target mix to a bit more
conservative -- allowing only 3 year terms, and better investment
grades. This is just to see how things go and I'll adjust to higher
risk/return if things are going well.
The
main question of course is: how many notes will become late ? It'll be
exciting to see the money come in the first month, and I'm sure it'll
(hopefully) get pretty boring after that. For reporting purposes, I'll
use the total account value that LendingClub reports. They take into
account notes that have been charged off etc. If lots of payments start
running behind, I'll stop the automated investing option. If all is
paid on time, I'll get more aggressive.
I
think this is a great way to diversify my overall investment portfolio.
Stocks and dividends are great, and this is another, unrelated source
of income. It's too early for any conclusions though, and I'll report
back when I have more thoughts on this.
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