Lending Club Holdings

Since November 7, 2013 I no longer invest in Lending Club. The results below show my investment results up to that date. You can read here my reasons for ending this investement.

I really enjoy investing with Lending Club. I’ve been investing with Lending Club for almost 3 years and over that time I have developed a method of selecting, evaluating and watching new notes in which I want to invest and those I am already invested in. The method of watching the notes I already own helped me to avoid late or defaulting notes. And by that I mean absolutely no troubled note at all. By watching carefully my notes I was able to sell any note before it turned bad. This process helped me to have only current notes and increasing my return.

The following charts are showing my current record.

Interest rate over time:

As you can see at the chart above I started investing in March 2010 (point mouse at the graph and the exact date and value appears). Because I only held a few notes in the account the interest rate skyrocketed to over 14%. You may have a similar experience with this. When you start investing and hold 4 notes only, your average can get pretty high. As i was adding more cash and adding more notes (and I was conservative adding mostly A and B notes) the rate started dropping. I had no strategy for a prolonged period of time (until March 2012) as you can see the rate bouncing at the same level.

In April 2012 I implemented my strategy and watched it for some time. It worked very well, so in July 2012 I decided to start contributing more cash as you can see in a below displayed chart. Since then, the interest rate started growing. As I gained confidence in what I was doing I started taking in more aggressive notes (D, E, F, and G) which are helping in growing my account faster.

Current account value:

This chart shows the value of the account over time. It contains a net value, so all commissions, fees, but also contributions and interest are included.

Monthly payments (interest & principal):

This chart indicates net payments I am receiving every month. It includes repayments and interest.

Annual interest income:

This chart shows my annual interest I am receiving. that means if nothing changes and I stop contributing, start reinvesting principal only, and withdrawing interest, this is the amount I should be receiving annually.

Later in my LC carreer I learned that LC net interest rate isn’t a very accurate number. To get an accurate number I started using XIRR calculation in a spreadsheet to obtain the rate number. In average my overall ROI is about 1% lesser than the one presented by Lending Club in my account. I will be posting this number with my quarterly reports and also later I will include it on this page.

Are you considering investing with Lending Club? Do you need help? Contact me for information or help.

Happy trading!

16 responses to “Lending Club Holdings”

  1. Ryan Walsh says:

    Hello,Came across this and was interested to hear about your strategy for avoiding defaults and charge offs.

    Thank you,

  2. Karan says:

    Thanks for your inputs Martin

  3. Jim Burke says:

    Hello Martin, I’m a new LC investor. If your approach for avoiding defaults is something you will share, I’d like to be on the receiving end. If not, I understand; and I appreciate your good work on this blog. J

    • Karan says:

      Hi Martin,

      Great Post.
      I would love to get some inputs on your LC investment strategy as I am a beginner Investor.
      If you don’t mind sharing, can you please let me know how you avoid defaults.

  4. Nicely done :) Happy to see success. You should tag your p2p tweets with #p2plending. Peter Renton or myself usually try and retweet those tags.

    • Martin says:

      Simon, I will try. I am not much familiar with Twitter and most of my tweets are automatically done thru this blog, but when tweeting directly, I will definitely do it.

      As far as P2P I am very happy with the results and unless anything changes I think I will be able to get great results in the future. It works great for me so far.

      Thanks for stopping by.

  5. Kirk says:

    Hi. If you could send me how you know watch your loans and know when to sell them (as well as the discount/markup on the loan selling), I would be most appreciative!


    • Martin says:

      Please, contact me via the contact form. Thanks

      • Karan says:

        Hi Martin,

        Great Post.
        I would love to get some inputs on your LC investment strategy as I am a beginner Investor.
        If you don’t mind sharing, can you please let me know how you avoid defaults.

        • Martin says:

          Hello Karan,

          I no longer invest in LC as there is literally no way to avoid defaults. It is now a lottery. You either hit the jackpot or buy bad loans. You have no way to manage your investment after you buy and once it gets into “grace period”.

          • Karan says:

            Thanks for your reply Martin.

            I understand what you are saying, now we have no control if we are stuck with bad loans.

            How many loans do you think go in default at LC.

            I was thinking of creating notes of $25 each and thinking if a few 2-3% go in defaults, then also the high rate of return from active notes will offset loans in default.

            Do you think this approach may not work, do you think the default % has significantly increased.

            Asking your inputs as you have been a seasoned investor in LC and I am just starting out.

            Trying to see if this is a worthwile way of diversification or is just pure gamble.

            Thanks for your inputs.

            • Martin says:

              With LC or any P2P investing you definitely need a heavy diversification. Never buy a note for more than $25 dollars and never invest into the same borrower twice (you can do it but only after he pays the first loan completely off. After you purchase the note, you are pretty much done.

              There are some statistics out there (since it has been a couple of years I invested in LC I do not remember them any more, so you have to do your research on this) how long it takes the note to get default (in average), I think it is around 8 months when the borrowers are prone to default. You may then take a similar approach as in trading and sell those notes in secondary market after the first 6 or 7 months and buy new ones. Then you lower your risk of default compared to when holding all the way until maturity.

              But again, do your reading. There are statistics out there which you may use to build your strategy around them.
              Good luck.

  6. Nathan says:

    I have been following your blog and enjoy it. Could you email me your lending club secret on avoiding loan defaults. Keep up the good work. Good info.

  7. admin says:

    Hi CI, currently I do not plan publishing it, but I can send you an email. Send me your contact and I can shoot you my strategy.

  8. CI says:

    Hey! Do you mind sharing your LC secret? Do you look at the movement in credit ratings?

    You clearly have had excellent results! I’d be interested in learning from you!


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