One good thing about the trading platform: sometimes you’ll get a payment within a few days of purchasing a note, depending on how the timing works out. I think Onomatopoeia had that happen. As opposed to us originating lenders who have to wait over a month from the time we commit our money, to the loan actually funding and reaching its first payment date. That can be a month and a half (if we fund early in the 12 day funding period, then the loan is issued at the end of that, then 4 business days to get credited).
Oh yeah: popping back to something Onomatopoeia mentioned about not being able to ask questions: I wish there was a way to ask the borrowers to comment on a sudden drastic change in their credit score!! Or that LC would post commentary regarding a request for a payment plan.
Yeah, I remember that comment and am looking forward to my immediate bounty. At the rate with which these transactions are being processed (glacial), I’m afraid that I’m going to miss receiving a payment though.
Yep, this is one of the really good things about the trading platform. I typically receive a payment, on average, within two weeks of purchasing a note. I received a payment on one note just 2 days after purchase, including all the interest that had accrued from the prior month when it was owned by someone else.
Just had another loan pay off early - it issued 4 months ago, so I got 3 regular payments and one payoff. Rereading the original description, it’s not a surprise; they were scrounging money to pay the last of the “make it habitable” expenses with a fixer-upper, and were planning on refinancing once the bank was willing to write a regular loan.
I’m just glad they didn’t pay it a month or two earlier - total interest paid something like 84 cents, fees something like 28 cents, If they’d paid it off after a month, I’d have lost money like Onomatopoeia did on one loan.
Is all of this really worth your time? I’m seeing where people made 30 bucks in a year and less than a dollar on a loan. It seems like someone is getting rich off of the work you knuckleheads are doing and it’s definitely not you guys.
As someone who has just started, yes, there is quite a bit of upfront work, but don’t discount the entertainment value. It’s interesting to wait for the payments to come in, and I do laugh at myself for getting excited over an 18 cent interest payment.
Even if this is more “work,” it is infinitely more fun than dropping $10,000 into a mutual fund. I do realize that I am agonizing WAY too much over a $25 dollar investment, but even now I can tell that that level of involvement is going to decrease. With the next round, I expect to spend WAY less time picking notes, and will be looking to spend around $50/note rather that the $25/note I’m spending now.
Finally, while it is more “work,” the rate of return is pretty nice compared to a savings account. I still can’t say if the work/rate of return/risk balance works out to something I’m happy with, but there are several people who have been contributing to this thread for quite a while who seem happy. I hope to join them.
I will say this much: a single 25 dollar note brings in more in interest in a month than several THOUSAND dollars in my brokerage cash sweep account.
I’m quite sure that if I were to plunk in a larger amount of cash, I’d do something like selecting a bunch of notes that meet x criteria (e.g. all B class loans with zero delinquencies will get 25-50 dollars).
At this point, however, I’m very small potatoes and can spend a few minutes deciding on each of my 25-50 dollar investments.
Larger investors, I suspect, spend even less time per-note - AND also I suspect they put more than 25 bucks per note.
Does the Lending Club itself make money? I['m sure they make a decent amount. They’re pretty much guaranteed money from any loan they manage - between the origination fee (paid by the borrower), and the 1% fee they deduct from anything we investors receive, they have nothing to lose and a lot to gain (not to mention the “float” they have on everything). So what? It’s really a win-win scenario.
Most people here are making extremely small investments. Forget the figures, look at the percentages. My LC account has yielded an 11.38% net annualized return (that’s including 1 note that defaulted). I have other investments that outperformed it last year only because of the stock market bounce-back (although now it is stagnant again), but that’s still pretty damn good.
Just a quick question for the experienced LC’ers. I see that a payment cleared on on one of my notes today (the new due date is now 8/3), but the payment is not showing up in my Payments Received column. Is this just a timing thing? I’ve had this note for close to a month, so the payment is definitely mine. I’m just not sure if I should be getting concerned yet, or if I should just give it a day to sort out.
I find it typically takes 4 business days after the due date, to when it’s credited to your account. As in if it’s due on a Tuesday, it’ll hit your account by the following Monday: Tuesday->Wednesday (1), W-TH (2), TH-F (3), F-M (4).
Sometimes on a weekend day, it’ll only take 3 (e.g. due on Sunday but that’s really Monday because that’s the next business day), then credited by Thursday (where Monday to Thursday is a 3 business day gap). Not always though.
Also, in the afternoon of the day the payment should be credited to me, there’s sometimes a very brief time between when it shows as paid in one place, and when it shows up as having been added to your account.
So: 3rd (which is Sunday), Monday was a holiday, so Tuesday was the first real businesss day. Then 4 days after that is W -> TH -> F -> M.
It sounds like you got lucky that it’s coming today vs Monday.
Anyway - don’t worry that it isn’t in both places yet; check tonight or tomorrow and everything should be in balance.
They want 35,000 for 5 years, at a rate of about 20%.
They want to pay off two existing loans - a line of credit for 24,000 and another credit card for 8,800. OK, that matches up with the principal amount especially once the original fee is deducted.
Only… the minimum payments of those two loans add up to about 650 dollars. The payment on the loan is 879.00. An increase of 200ish dollars. OK, maybe that’s worth it for a lower rate / faster payoff.
Only - the rates on the loans they’re paying off are less than 11%.
So - higher rate, higher payment - WHY would they want to take out the described loan??? Can anyone explain this to me??
And no, I’m NOT investing in that one, LOL. I do have a small handful of D-class loans (3, I think) but those came closer to passing the smell-o-vision test.
Just checked on that crazy loan - and it got 90% funded then issued, so I guess some people thought it was a good idea!! Someone must have tossed a chunk of cash at it - about 32,000 funded, 350 people - so that’s an average of about 100 per investor. I don’t think most people would have tossed that much at it.
For me: things are chugging along. I’ve now got 51 current loans, plus one default, one “late 16-30”, one in funding, and 5 paid off.
The late loan has a payment plan in place, they’re paying about half the normal payment for the next 6 months then start making catch-up payments. As such, I think it’s a bit misleading to list it as late - maybe they need a separate status to cover such.
I have one loan that has a payment processing right now, that might go bad - it’s an A5, but the borrower’s credit score plummeted 4 notches a couple months ago. Nothing I can do now (except I suppose try to sell it but I think I’ll hang on a bit longer).
My very earliest outstanding loan, for adoption, has shown a significant drop as well but it rebounded one notch a couple months ago. That one is exactly halfway paid off, after 20 payments. A couple of others are nearing the halfway point.
Still concentrating on B and C class loans. I have a solid set of A-class, but the rates are so low that most of my new loans are B and C. I have a grand total of two D-class loans, one brand-new (due in early August) and one older that’s toddling along just fine with no credit score change. I wonder if I could sell that one for a markup?..
And my current annualized return is a whopping 8.42%. Guess I’ll get to retire after all :).
Of my original 40, two did not make a single payment and are now in collections (they were A5 and C3). One paid off the loan (for a wedding) after just one payment. This was a $16,000 loan over 60 months. Maybe the wedding fell though.
Teh two loans I referred to earlier that have not made a single payment were both for weddings. Looks like one person has skipped town (this person was rated A5 and only borrowed $2,000):
7/27/11 (Wednesday) Borrower not located (skip trace)
7/27/11 (Wednesday) Mail service returned pre-collect letter
7/22/11 (Friday) Collections Agency attempted to contact borrower
7/22/11 (Friday) Collections Agency sent email to borrower
7/22/11 (Friday) Collections Agency attempted to contact borrower (no voicemail)
7/14/11 (Thursday) Engaged external collections agency
