Update on My Lending Club Experience

by Kevin on June 3, 2009

I thought I would update my progress with Lending Club. I originally lent $25 each to two individuals, each at an interest rate of 9.76%.

Thus far everything is going well. Both my loans are current and I’m having my money returned to me. It’s actually kind of cool when it works as planned.

I hand selected my loans. When you lend money you have the option of picking them yourself or letting Lending Club handle it for you. I wanted to know the story behind my two loans and decided to pick them by hand.

Thus far this is what my account summary looks like:

  • Net Annualized Return: 9.64%
  • Payments to Date: $23.44
    • $19.06 in principle
    • $4.38 in interest

My borrowers pay me back $1.60 every month. Obviously a very small amount of money, but hey, they’re paying me back. That’s better than some have experienced with social lending.

I funded the loans back in May of 2008, so we are a year into the payment plan. The expected final payments are in November and December of 2010. Quite a ways to go, but about halfway there nonetheless.

What’s Your Lending Experience?

Have any of you lent money through social lending sites like Lending Club and Prosper? What’s been your experience? Sitting on piles of money or did you get burned and walk away?

Interested in becoming a lender and earning great returns — all while helping someone lower their credit card interest from 25% down to something more reasonable like 9 or 13%? Apply to become a lender at Lending Club.

{ 1 comment… read it below or add one }

Russell Fascenda June 13, 2009 at 8:12 am

I’ve been lending at prosper.com for 2 years, with good results although I’ve had 4 defaults in recent months. The majority of my lending was to a personal friend, we used prosper.com to make it more formal, to help my friend build a credit history, and to share the burden with other lenders (although I provided the bulk of the loan).

You can see my statistics at http://www.lendingstats.com/lenders/Florida67 an independent site that has a wealth of reports. They estimate my return at 8.8% which is an attempt to consider what the future pattern of defaults and payments will be. My actual annualized rate-of-return is 12.18% to date.

Lendingstats provides lists of top lenders, both in % and in $. Those two lists do not at all co-incide, those with $1 million in loans have horrible returns, I think that comes from using the automated bidding criteria, which I’ve also used but like Kevin I prefer to read the listings and make more subjective choices.

Note that prosper.com has been in a “quiet period” for many months while they wait SEC filing to be a nationwide peer-to-peer lender.

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