Time for another Lending Club update. As of today my return is 9.96% NAR, $7,383.95 invested, and over $1,220 in interest. I have over 360 active notes. Since my last update, I now have ten charged off loans, five 31-120 days late notes, and two 2-30 day late notes. The defaults have changed my return to from the previous 10.61% NAR reported in January 2012.
Since my last update, I have updated our Lending Club promotions web page. You may want to check them out, if you still are on the fence about joining Lending Club.
With the low interest rates and another five year CD maturing, I plan on adding another $1,000 to my Lending Club Account. I plan on getting to $10,000 total invested with Lending Club as my limit. Once I reach that point I might reinvest the profits, or just let it wind down taking the profits into other investments. Keep in mind my Lending Club account is taxable and taxed as regular income (boo!). As rates are expected to increase next year, my profits will decrease from this. So I may entertain the idea of opening an IRA account to defer taxes. Lending Club and Prosper are definitely not tax efficient.
Since the last summary, I have created a new tracking portfolio within Lending Club. I’m doing this to track changes with my loan selection process and to see if the performance turns out any better. While I’m more than happy with my current returns, I’ve made some new distinctions. From my quantitative analysis of Lending Club data, I have adjusted some filters that should increase my returns. I’m curious if the changes will lead to better returns. So far yes, but it’s way to early to tell. In the past month I’ve had a tough time finding notes that meet my filter requirements, hence why you see a decent amount of cash in my account. I suspect this will change as the previous two months I had no issue finding notes. If anything, I was able to pick the best notes at the same return rate.
Come the end of June, I’ll be with Lending Club for three years. I might end the quarterly updates, as I’ve gone through a full three year lifecycle and documenting my performance.
Readers: Would you like to see my quarterly updates to continue? Would you like to see any topic related to Lending Club discussed that I haven’t done previously?