Comments on: Lending Club Reviews for Investors and Borrowers

By: Amanda L Trottier

Amanda L Trottier — Wed, 02 Mar 2022 04:09:05 +0000

I invested as a ordinary person wanted to invest in a start up company gave them 275 dollars for 100 shares and 10 percent bonus on ally my investment ally i got was a page with my name and no investment sent several emails and they keep telling me i didn’t invest. They have a phone number, that directs you to email them. But you never speak to a live person. With the kind of money that is being given you would think they would have live support so these issues can be address the screwed me out of my money which I am still trying to recover, I was introduced to a recovery agent hack101 at tutanota d o t c o m .. And happy to say i got all my money back

By: Sarah

Sarah — Mon, 25 Jan 2021 14:09:02 +0000

In reply to Len d’Club. What is another place you suggest to use instead of LC?

By: Len d’Club

Len d’Club — Sat, 12 Oct 2019 03:31:57 +0000

Your review of LendingClub is far too positive. As the saying goes, “Past performance is not a guarantee of future results”. In a year or two I would suggest re-reviewing LC with your actual returns.
But here are the gaps that I see in your article.
One, notes you purchase are not easily sold for face value in the secondary market. If you want to sell a note you’re no longer interested in owning, you will have to sell it at a significant discount on the secondary market.
Two, some borrowers will straight roll you, meaning never even make a single payment. The worse part of this is that because your investment was less than 12 months, you can’t even deduct it as a capital loss, if you are investing in a taxable account. For IRAs, you’re just straight out of luck. And this doesn’t even discuss the fact that charged off notes will get sold off by LC and you’ll get pennies on the dollar (net of LC’s cut for the “recovery”)
Three, there are statistics pages on LC’s website that show the range of returns, and at present the vast majority of LC note investors are not getting anywhere near 10% return.
Four, if you decide to start an IRA account with LC, there is an administrative fee if your balance is too low. When it comes time for you to start taking minimum required distributions from your IRA, then you had better hope you are not forced to sell notes to avoid IRS mandated penalties (see point number one above).
Five, LC has been engaging with other financial institutions to buy up whole notes, never getting to the fractional market (retail lenders such as yourself) that got them started.
Six, this may have changed, but at least in past, if LC ever goes bankrupt your investment with the notes goes to nothing. You are actually not investing directly in the notes, you are investing with LC who then lends the money to the borrower based upon what notes you want to put money towards. So, make sure you know if LC is a going concern long enough for you to get your money back. And note that LC recently did a reverse stock split.
Seven, if you invest in a taxable account, net of taxes your returns will likely not be much better than U.S. Treasuries.
Eight, there are many long-time investors, on other forums, who are unwinding their LC investments. These are sophisticated people who’re using LC’s API to pull data down, score notes and make investments every four hours that LC makes notes available for sale.
Which brings up number Nine. If you’re investing notes, with the sophisticated operations that some investors have, you will be lucky to invest in the crumbs of notes that fall through the cracks.
And Ten, The previous two years and the current year-to-date, my charge-offs have exceeded my interest income. At first I had a real nice rate of return, and up until 2017 I was stable around 7%, thinking I had found a way to get good income, then 2017 happened, and 2018 and 2019 haven’t been better. Over the years of investing on LC, I’m looking at a net of taxes return of about 2% overall and that isn’t climbing when charge offs exceed interest income.
And just to go to Eleven, you might score a good note with high credit scores and high interest rates, but then another financial institution will come along and offer that same borrower another re-financing package with better terms and that borrower will pay your note back in full. So, don’t count your chickens until all your eggs are hatched.
And don’t even get me started on how much in fees LC takes from the loan payment as it relates to collections.

By: Mandy

Mandy — Thu, 25 Jul 2019 11:41:14 +0000

Does Lending Club lend money to persons from other countries or only within United States

By: Richard

Richard — Wed, 03 Jul 2019 21:48:11 +0000

The authors comments are unrealistically skewed towards the positive. In reality, after 3.5 years, my initial investment of $5K has only made a 3.2% return with 18% of the loans written off. Oddly enough, the highest percentage of loan write offs have been A and B rated loans with my loan portfolio containing A, B, C and a few D rated loans. In my opinion, Lending Club is not aggressive enough in pursuing payment and they charge you for the lame collection attempt they make. I am currently make a higher return in certificates of deposit and I recommend that course of investment over an unpredictable return and poorly administered collections procedures. Another sad fact of the Lending Club is that they promote the ability of selling loans out of your portfolio which in practice does not work.

By: Ronald de Doelder

Ronald de Doelder — Mon, 11 Mar 2019 00:27:54 +0000

Very interesting article – thank you for your effort. A couple of questions which you might have covered in your article. When is interested credited to your account and can the interest be withdrawn say on a monthly basis leaving the principal in the account for further investment when after current loans mature. I would like to receive to receive the interest as part of my monthly income.
Thank you for your help.

By: Rebecca

Rebecca — Sat, 16 Feb 2019 14:53:26 +0000

Great article. Informative and easy to follow. Will definitely be checking out this form of investing further. Thanks!

By: Jeff Rose

Jeff Rose — Mon, 28 Jan 2019 23:58:38 +0000

In reply to Angel. Hi Angel - Each note is $25. So if that loan defaults, you will lose part of your investment return. But if you're earning 10%, that would be $100. A single loan default would drop your net return to 7.5%.

By: Angel

Angel — Sat, 26 Jan 2019 02:22:09 +0000

Quistion: If you invest 1000 with a posible return on 3% what is 30 anual, but you divide all this 1000 in miltiples notes. With one single person that don’t pay you, you lose the whole posible return. Is that true or i am missing something???
Please explain

By: Craig W Van Sickle

Craig W Van Sickle — Fri, 28 Dec 2018 12:33:47 +0000

Jeff, good morning. Your article is dates 10/19/2018 but in your personal experience you only reference 2014 and 2015 data for the Lending Club. Did you start investing prior to those dates or only in the last 2 years? Do you plan to significantly increase the amount invested by influx of new funds or allow to grow through reinvestment of funds currently invested? What percentage of your total investment portfolio do you have invested in the Lending Club?