# Lending Club Experiences **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 24, 2009, 7:00pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989 "2009-10-24T19:00:38Z")\ **Posts on this page:** 20\ **Page:** 21
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 23, 2012, 12:18pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/402 "2012-03-23T12:18:34Z")
Today is the one year anniversary of my putting $1,000 into LC. I have fared less well than others here, with 3 loans defaulting and a return of just 1.27%, although I have another loan well on its way to default (93 days late and counting). If I take into the account the taxes I saved on the losses, my return is about 2.7% This beats my savings account, but is worse than all the bond funds I own. I had 57 loans. 6 paid off, 3 defaulted, 1 is late and 47 are current. The loan profiles are: A (30%) B (38%) C (12%) D (12%) E (8%) F (0%) My 3 defaults were one A, one B, one C. And another A on the way. Succumbing to LC’s advertising, I have decided that I need more notes and have just deposited another $5,000. Choosing another 200 notes could be a challenge - when I run my usual filter, it only finds 9 notes. There again, having had so little success, maybe I need to change my criteria anyway. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [March 23, 2012, 3:31pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/403 "2012-03-23T15:31:40Z")
> [@amarone](#): > > …Choosing another 200 notes could be a challenge - when I run my usual filter, it only finds 9 notes. There again, having had so little success, maybe I need to change my criteria anyway. So do the 9 notes, then in 2 weeks pick a few more etc.? ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 23, 2012, 3:42pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/404 "2012-03-23T15:42:22Z")
> [@Mama\_Zappa](#): > > So do the 9 notes, then in 2 weeks pick a few more etc.? Possible, but if 9 are generated every two weeks (and I do not know what the actual number would be), it would take me nearly the whole year to buy 200. The criteria that really cut down the number are a) Verified Income, and b) Review Status. I don’t see much point in looking at unapproved loans, but if I removed the requirement for verified income, the number increases from 7 (it dropped from 9 to 7 in only 4 hours) to 78. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [March 23, 2012, 3:52pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/405 "2012-03-23T15:52:59Z")
> [@amarone](#): > > Possible, but if 9 are generated every two weeks (and I do not know what the actual number would be), it would take me nearly the whole year to buy 200. > > The criteria that really cut down the number are a) Verified Income, and b) Review Status. I don’t see much point in looking at unapproved loans, but if I removed the requirement for verified income, the number increases from 7 (it dropped from 9 to 7 in only 4 hours) to 78. Ah - you’re using the exact opposite set of values I do - I won’t touch a loan where income hasn’t been verified, but will pick loans that aren’t yet approved - figuring they either WILL be approved (and most are), or won’t be in which case they return my money. You make a good point about investing larger amounts of money - you either have to loosen your criteria, invest larger amounts in a single loan, or take FOREVER to invest. None are optimal solutions. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 23, 2012, 4:00pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/406 "2012-03-23T16:00:31Z")
> [@Mama\_Zappa](#): > > Ah - you’re using the exact opposite set of values I do - I won’t touch a loan where income hasn’t been verified, but will pick loans that aren’t yet approved - figuring they either WILL be approved (and most are), or won’t be in which case they return my money. Not quite opposite - I do not touch loans where income has not been verified either. I am just commenting that if I do relax that criterion, then it will give me more options. You make a good point about the money being returned if the loan is not approved. Previously I had not wanted to waste my time reviewing a loan that might not be approved. However, with 200 loans to do (no point doing fewer but bigger loans as that would not get me the diversification benefit that LC claims), I may not bother reviewing them anyway - just set some criteria and accept everything that matches. It’s not worth spending hours and hours over a $5k investment, and spending even one minute per loan would mean taking 4 - 5 hours, allowing for loans that do not finalize. ---
**Author:** ![Giltathriel](https://avatars.discourse-cdn.com/v4/letter/g/b38774/32.png) [@Giltathriel](https://boards.straightdope.com/u/Giltathriel)\ **Post date:** [March 23, 2012, 6:11pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/407 "2012-03-23T18:11:54Z")
**Brown520** I’ve had that happen several times from the other side - tried to buy a loan on the trading platform and had the transaction cancelled. I think it automatically happens when a payment is processed before the transaction is finished, possibly to prevent confusion about the worth of the loan? Anyway, I don’t have a solution for that one, but it’s probably not the buyer’s fault. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [March 23, 2012, 7:10pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/408 "2012-03-23T19:10:31Z")
Anyone else doing anything with the “Portfolios” tool? This lets you assign loans to groups for your own viewing pleasure. I’d always ignored this, but it occurred to me that this would be a way of flagging loans I want to monitor - like ones that have had late payments in the past, or whose credit score has dropped significantly. For the “dropping” portfolio, I looked for loans where the score had dropped 2 or more notches (for a B or below), or 3 or more notches (for A class). ---
**Author:** ![brown520](https://avatars.discourse-cdn.com/v4/letter/b/ea666f/32.png) [@brown520](https://boards.straightdope.com/u/brown520)\ **Post date:** [March 24, 2012, 12:13am UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/409 "2012-03-24T00:13:03Z")
> [@Giltathriel](#): > > **Brown520** I’ve had that happen several times from the other side - tried to buy a loan on the trading platform and had the transaction cancelled. I think it automatically happens when a payment is processed before the transaction is finished, possibly to prevent confusion about the worth of the loan? > > Anyway, I don’t have a solution for that one, but it’s probably not the buyer’s fault. That’s what I suspected, thanks for the info. It makes sense to me. But what’s weird is that I still see one loan listed as a canceled sale, with the date 3/22, when the transaction settled on 3/19. I don’t think the transaction will be reversed but it is strange. I really wish these kinds of things would be explained in the FAQ section rather than us trying to figure it out. I see this explanation, but it doesn’t seem to be true: 1. What if my Notes don’t sell? If your Notes don’t sell, you may need to consider decreasing the asking price to make them more attractive. Note that even if you do not lower the asking price, performing Notes may become more attractive over time (until the next payment date) because interest keeps accruing until the next payment date and **the buyer will get to keep the next payment, including any accrued interest until the day the trade settles**. It seems to me like it would be relatively easy to just allow the buyer to keep all payments and interest after the note is purchased rather than when the transaction is settled, so these transactions don’t get canceled. ---
**Author:** ![IMFoghorn](https://avatars.discourse-cdn.com/v4/letter/i/d2c977/32.png) [@IMFoghorn](https://boards.straightdope.com/u/IMFoghorn)\ **Post date:** [March 24, 2012, 11:44am UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/410 "2012-03-24T11:44:31Z")
> [@amarone](#): > > Possible, but if 9 are generated every two weeks (and I do not know what the actual number would be), it would take me nearly the whole year to buy 200. > > The criteria that really cut down the number are a) Verified Income, and b) Review Status. I don’t see much point in looking at unapproved loans, but if I removed the requirement for verified income, the number increases from 7 (it dropped from 9 to 7 in only 4 hours) to 78. The first few months with LC I filtered out loans still in review. I had a hard time finding loans that met my other criteria so I removed the review filter and have had much better luck. My thinking is that a lot of good loans are funded long before they are out of review. In most cases, I don’t think the time I have to wait for a note to be issued is excessive. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 24, 2012, 12:17pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/411 "2012-03-24T12:17:21Z")
> [@IMFoghorn](#): > > The first few months with LC I filtered out loans still in review. I had a hard time finding loans that met my other criteria so I removed the review filter and have had much better luck. My thinking is that a lot of good loans are funded long before they are out of review. That makes sense. I will drop the “approved” requirement from my filter. ---
**Author:** ![drachillix](https://avatars.discourse-cdn.com/v4/letter/d/48db29/32.png) [@drachillix](https://boards.straightdope.com/u/drachillix)\ **Post date:** [March 24, 2012, 9:21pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/412 "2012-03-24T21:21:44Z")
> [@amarone](#): > > That makes sense. I will drop the “approved” requirement from my filter. My quickie search criteria is just 750+ credit and b&C grade loans. right now that gives me 36 to choose from. I am seeing the A’s pay off early a little too often for my tastes. IF I go looking for A’s is a A4 or A5 ---
**Author:** ![Onomatopoeia](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/onomatopoeia/32/4145_2.png) [@Onomatopoeia](https://boards.straightdope.com/u/Onomatopoeia)\ **Post date:** [March 25, 2012, 12:05am UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/413 "2012-03-25T00:05:10Z")
> [@drachillix](#): > > My quickie search criteria is just 750+ credit and b&C grade loans. right now that gives me 36 to choose from. I am seeing the A’s pay off early a little too often for my tastes. IF I go looking for A’s is a A4 or A5 A number of my A loans have paid off early as well. On a couple of those I actually lost money, so I try to stay with Bs and Cs at this point. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [March 26, 2012, 7:47pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/414 "2012-03-26T19:47:55Z")
> [@amarone](#): > > That makes sense. I will drop the “approved” requirement from my filter. You _will_ run into the occasional loan that either does not go through despite having 100% funding, or takes far longer than expected to get finalized. I had one over the Christmas holidays that took something over 3 weeks (but finally processed and was issued). More recently, I had one that took about 3.5 weeks and was ultimately NOT processed. More usual, one will fund, then be rejected a couple of days later. Still, most that are funded do ultimately issue. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 26, 2012, 8:01pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/415 "2012-03-26T20:01:58Z")
> [@Mama\_Zappa](#): > > You _will_ run into the occasional loan that either does not go through despite having 100% funding, or takes far longer than expected to get finalized. Yes - that is why I put the filter on in the first place. I was trying to place 40 loans and it took me several go-arounds because of several not completing. As my money has just arrived in the account today, I can get on with it. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 26, 2012, 9:59pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/416 "2012-03-26T21:59:04Z")
Well, it turned out that changing my filter to include unapproved loans resulted in an increase from 7 to 10 loans. So I have taken a much more cavalier approach and got rid of “income verified.” Then I widened the net on various other filters to get to 198 loans rated B - F. I have given up on A loans. Others report the problem of them being paid off. I have the opposite problem - two of my four defaults were A loans. I added in two A-5 loans to get to 200 and “bought” the lot without checking the details of any of them. Let’s see if this approach does better than last year when I carefully selected every loan. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 30, 2012, 10:48am UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/417 "2012-03-30T10:48:09Z")
So far, of my 200 attempted purchases, 6 have been issued and 44 failed to complete. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [April 11, 2012, 7:55pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/418 "2012-04-11T19:55:08Z")
> [@amarone](#): > > So far, of my 200 attempted purchases, 6 have been issued and 44 failed to complete. How’d it ultimately work out? I just checked my account today and the loan that had missed its first payment was ultimately paid. I’m watching it closely, however. Had another loan pay off early the other day, after 2 payments. A B2, I think. I got a total of 48 cents in interest, minus the 25 cents fees, I netted 23 cents. I think I’ll go buy a stick of gum. I’ve got 4 or 5 loans awaiting their first payment and another in funding - with normal paybacks, a couple of prepayments (one total, one partial) and my monthly 20 dollars, my LC account had a higher-than-usual amount of free cash in the past month. ---
**Author:** ![tkfourtwo1](https://avatars.discourse-cdn.com/v4/letter/t/e99b99/32.png) [@tkfourtwo1](https://boards.straightdope.com/u/tkfourtwo1)\ **Post date:** [April 13, 2012, 4:08pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/419 "2012-04-13T16:08:17Z")
I find it very interesting to read how, as investors, you go about making selections in what to invest in. As somebody with a pending loan and an A5 rating, I know no idea if my loan will ultimately be funded. ---
**Author:** ![Raza](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/raza/32/213_2.png) [@Raza](https://boards.straightdope.com/u/Raza)\ **Post date:** [April 13, 2012, 5:15pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/420 "2012-04-13T17:15:19Z")
I don’t know the answer, **tkfourtwo1** , but the criteria I look for when funding a loan is: - purpose (I focus solely on debt consolidations/refinancings) - length of employment - loan amount vs gross monthly In general, I focus on just B-C ratings, 36 months, under $15,000 loans, but that’s just my personal preference. I generally don’t target A ratings just because I want a bit more of an interest rate. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [April 13, 2012, 5:35pm UTC](https://boards.straightdope.com/t/lending-club-experiences/514989/421 "2012-04-13T17:35:12Z")
> [@tkfourtwo1](#): > > I find it very interesting to read how, as investors, you go about making selections in what to invest in. Is that why you weren’t at your post? [Previous page](https://boards.straightdope.com/t/lending-club-experiences/514989.md?page=20) [Next page](https://boards.straightdope.com/t/lending-club-experiences/514989.md?page=22)