This update marks now two years since I’ve been investing in Lending Club notes. Since my last update, my NAR has decreased to 11.32% from 11.35%. Since then I’ve had an additional note default. I now have exactly 300 notes in my portfolio, which is up from 222 notes. I now have over $6,000 invested with Lending Club.
I started monitoring my progress in December 2009 via this blog. I’ve decided for this post to show a graph history of my performance. As you can see my performance hasn’t varied too much over the years. This shows when investing in Lending Club returns can be steady, but obviously not the same as a fixed rate CD. For performance before January 2010, assume my performance was similar. Though I didn’t have that many notes invested.
In the past year, I’ve seen three defaults. This explains the initial decrease and then a slight decline over time. I’ve tried to keep up with investing in riskier loans that Lending Club does not price properly. The butter zone for Lending Club notes that I like seem to be around 11 – 13%. So far my investing strategy has worked out well. Based upon other investors, what I’m seeing is to be expected. The peak time to default is around mid-point of a 36 month loan. We’ll have a better perspective next July of my Lending Club performance. That will then be a full 3 years into using Lending Club, and my initial notes will start maturing.