Lending Club Investor Reviews: My Results With Lending Club After Two Years

Lending Club Investor Reviews

I have been a Lending Club investor for about two years. I started with a small amount of money and added $300 dollars per month until I reached $2500 invested. Initially, I reinvested all of my repayments, purchasing more loans through the automatic investment program offered through Lending Club. For a while, my returns were around 7%, but as of today, my returns are down to 4.94%. I no longer reinvest the payments and have been withdrawing loan payments from the account. My present account value is $1801.67.

What I liked About Lending Club

The idea of p2p lending really intrigued me. I have taken numerous loans in my lifetime, but having the opportunity to lend my money to someone in need of a loan was an interesting one. The fact that the amount needed to invest in each loan is only $25 meant that I could invest in a wide variety of loans to create a portfolio that I felt would do well, while only risking $25 per loan. To date, I hold 131 loans, 95 are issued and current, 2 are in the grace period, 24 have been fully paid, 3 are late 31-120 days, 0 are in default, and 7 have been charged off.

Lending Club is as hands on or hands off as you want it to be, which was something else that I liked. Prior to reaching the $2500 balance, I picked all of my loans myself and chose a range of A-D loans, each carrying different interest rates and risk. After I hit $2500, I switched to automated investing where any balance I had in my account from repayment went back into loans based on a number of factors that I had selected in the system. I liked the idea of automated investing, but some people will prefer to manage all of their lending themselves. You have the option for both, which is a strength of the platform.

What I Don’t Like About Lending Club

There are a few things that I don’t like about Lending Club–the first being that the money is basically locked in for 36-60 months. While you do get repayments every month, they are small, something like .50 to .80 cents per loan. Not having access to the money for three to five years is somewhat problematic for me. I don’t mind having money locked up for a time, but in order to feel like it’s accessible to me, I need to be able to do something with it if I want to. I guess this could be because I am new to investing and not used to the idea of locking up money for years at a time without being able to touch it.

Another thing that troubles me about the platform is my return on investment. A return of 4.94% is nothing to be ashamed of, and it’s a hell of a lot better than I would get in my savings account, but it is nothing phenomenal. Additionally, there are risks associated with the lending because the debt is unsecured. As I stated earlier, I’ve had charge-offs and have some loans that are months late in repayment. This is money lost, but it is part of the risk of lending.

Would I Recommend Lending Club To Others

I have and would continue to recommend Lending Club to others and might reinvest in the future when I have a more stable financial framework in place. I am glad I was able to tuck the money away and will put it towards paying down debt as it continues to return to me, but the truth of the matter is, Lending Club is only a good option if you are willing to have your money locked up for a long period of time. If you think you might need the money in the foreseeable future, it probably isn’t the place for you.

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