Comments on: Making Money With Lending Club and a Review of Peer-to-Peer Lending

By: greg G

greg G — Tue, 09 Mar 2010 06:25:11 +0000

Mike, you make a good point. I have not yet reviewed the note trading platform, so i dont know how many ready buyers the notes would have at a given time. I do think your post suggests that you underestimate the quality of notes on lending club. Your warning implies that most or many of my notes may become toxic, however the data thus far points to the contrary. If a lender restricts their portfolio to A and B and maybe some C quality notes, there is an excellent if not near perfect rate of return of on those notes (even in this so called down economy). it is in fact rare for a borrower with a 730 credit score to suddently fall below 700 and become delinquint. It happens, but its rare. Americans are extremely protective with their credit score, and the current trends are seeing Americans taking more care than ever to preserve and increase their scores.

Theoretically my portfolio consisting of quality A through C borrowers should be quite sellable at any time. I firmly believe, after reading lending club’s documents, and experiencing the process first hand, that this is a far more secure place for my money than a liquid stock market. But in the overall your advice is wise. Make the right lending decisions by gathering only A-C notes if you want to give yourself the lowest chance of default and the highest chance to resell them.

By: Mike L

Mike L — Tue, 09 Mar 2010 01:33:18 +0000

Just because there is a trading platform for the notes doesn’t mean they have ready buyers. If you make the wrong lending decisions and have borrowers that miss payments or their credit score goes down, it may be near impossible to unload them.

By: Greg G

Greg G — Sat, 30 Jan 2010 09:05:53 +0000

I’m very interested in the part you wrote about liquidity issues. I’ve got about $800 invested at lendingclub so far and plan to invest more, but liquidity is definitely something to be aware of.
One aspect of LendingClub that should have been mentioned in this article is the note trading platform that allows you to sell your notes at any time. I have not researched this aspect of lendingclub, but it seems to me that this would be a way to satisfy any liquidity issues. Wouldnt one be able to just sell all their notes at any time thus making lendingclub a good place even for parking short term savings?

If anyone has any experience with selling notes on lendingclub i’d be very interested in hearing your experience with that!

By: Nomansland

Nomansland — Fri, 19 Jun 2009 11:53:51 +0000

This investment is highly recommended. My Net Annualized return is at 8.24%, and that is after a year of picking some bad loans that have defaulted.

I don’t think they check your income or address to invest. I technically did not qualify when I joined (now I do), but I was never told I could not invest… you have to agree to the terms though.

By: John

John — Tue, 09 Jun 2009 01:31:48 +0000

I don’t have ANY income and they never asked me about income and I’m funding 1 note so far.

By: Justin

Justin — Sat, 06 Jun 2009 15:47:10 +0000

So according to their FAQ on “State and Financial Suitability conditions” (https://www.lendingclub.com/info/faq.action#l20), I can’t invest on the site because my income is less than $70,000/year?

By: Lean Cuisine Coupons

Lean Cuisine Coupons — Sat, 30 May 2009 18:36:33 +0000

I too like to lend for the profits it make..There are some cases where I borrowed money from 1 person and lent to the other person.

By: Business Cards

Business Cards — Wed, 27 May 2009 16:48:06 +0000

I used Prosper for some time and still have a number of outstanding loans. I like lending cause you get to help someone out and get a decent rate of return. Prosper got into some regulatory trouble and stopped accepting new loans.