I’m currently, uh…“winning” the thread with $12,000+. Why do you ask?
Because I’m thinking about doing some serious investing, maybe $10K at first. Blake said he may be able to set something up for me that would get me around the NJ restriction prohibiting me from investing directly through LendingClub, but I’d have to commit to $25K, which I’m not ready to do.
Blake also said plans to revamp the Folio*fn *UI are in the works, thank goodness. I told him that the search function is weak; he said he knows. 
If I understand you, you’re talking about people who place their notes on the market, correct? If so, I don’t think that’s the way it works. I had a loan note (still have it actually) that I tried to place on the market 2 weeks after I purchased it when I realized the borrower’s credit rating had plummeted. After 30 days, when no one purchased my note, I received the following email from LendingClub:
Dear XXXXX,
We thought you should know that 1 note(s) you made available for sale on the trading platform did not sell before the expiration date you selected.
Visit your Trading Account for details.
Regards,
The Foliofn team
The next time I logged in, the note I attempted to sell was back in my portfolio. The borrower hasn’t defaulted, or even paid late, so it’s working out.
Wowsers.
I had a payment get credited today and as I often do, I glance at the loan status. The borrower’s rating has dropped, which is not that unusual - people bounce up or down a notch many months.
This fellow dropped FOUR slots in one month. They were originally in the 715-749 range, had gone to the 750-779 range for several months… and plummeted down to the 640-659 range. Wow. That’s 100ish points in a month. The loan’s an A5 - a decent risk, supposedly.
As noted earlier, this is the third big drop I’ve seen this month. What happened to the economic recovery??
I wish their reporting tools included credit score trends easily viewable with the list of loans. I have to look at each one individually which can be a pain.
They don’t do tax statements - unless you have a single investment that brings in more than 10.00 in a year. As in, a single loan. My 25.00 loans are bringing in maybe 3 bucks a year apiece in interest, so that’s pretty unlikely unless you invest several hundred dollars in a loan.
Now, I do NOT know what happens if you become an investor while living in Alaska then move to Oregon, Are you locked out of future investments at that point?
BTW - tax-wise, I’ve basically taken my total interest income, subtracted out fees and defaults, and declared that as interest income on my schedule B.
One of my loan notes paid off in full today…6 months early. 
ETA: I purchased it at a slight markup, so I didn’t even make my full investment back. Double-:(. I only lost 17 cents, but still.
I’ve been looking into Lending Club, and wanted to share some information I gathered, just trying to figure out some of the particulars in the investing.
All information in this run is for a 36 month loan. I may come up with a nice graph to post at some point, but, I think this is enough for the moment. 
#1: If a loan pays off early, as some noted, you may loose money. I did some calculating and determined a few useful numbers.
At a 6% APR, you are profitable after 3 total payments.
Between 7 and 11% APR, it takes 2 payments to be profitable.
At 12% APR and above, you have become profitable after 1 payment.
This means that if your loan is paid off early, it will take that number of payments in that APR range to ‘not loose money’.
#2: At some point during the loan process, you will have collected enough P&I for your loan to ‘break even’. Simply put, you have collected as much or more than you have loaned. Until this point happens, essentially, you have not ‘made any money’ on that investment. (Yes, I know you could sell it early, but, until sold, the investment has not made money).
Here are the ‘break even’ milestones in months for between 5 and 20 % interest rates. Granted, if you interest rate is between one, which they often are, you may be closer, but this is just for a quick glance at the overall picture.
5- 6% - 33
7 - 8% - 32
9 - 10% - 31
11- 12% - 30
13 -15% - 29
16 - 17% - 28
18 - 20% - 27
I thought some folks would be interested in seeing how long it takes to make back the original investment on any given loan. And, this DOES take into account the 1% fee that Lending Club takes on payments.
If anyone has any comments, I’d love to hear them. Otherwise, just add this to your risk assessment list.
Zach
Hey guys, do they still do those $25 invites? If so, somebody PM me (in fact, the SO wants to do it too, so two people PM me :))
I don’t see anything on the Lending Club site about $25 invites; perhaps it was a short term promotion or something. They are currently promoting $100 to new investors who open an account with $2500. This may or may not be an incentive for you. It wasn’t for me.
I waded in slowly, starting with $250. I invested another $250 in January, and an additional $250 at the beginning of April, for a total investment of $750 since opening my account in 6 months ago. I currently have 27 loan notes; I had 28, but one paid off early 2 weeks ago. As of this morning, I’ve currently had payments totaling $150.73, of which $26.19 is interest. I’m now at the point where I’m receiving a payment three times a week. Yeah, they’re tiny, but it’s still fun to see more money in my account every time I log in.
I keep telling myself that I’m going to invest a good chunk of cash at once, but I keep holding off. I may still do that at some point, but for now investing $250 every three months feels about right.
I was interested in this, but ran into two obstacles. First of all, I live in North Carolina, which is not one of the states on their eligibility list. Second, my annual gross income is under $70,000.00. I assume there’s some reason that they don’t want people making less than that participating.
Mmm no way would I dump that much to begin with. I would over a year, but not in one fell swoop. Who knows, I could be shitty at picking loans for all I know. That’s too bad about the $25, I was hoping to help someone out.
Chessic Sense, when you lived in PA, did you register with your PA address all smoothly? Chefguy, did you end up using your sister’s address?
Methinks a lot of people lie about this. I know two investors IRL who are recent graduates making far less. It’s supposed to be a protection thing for you and this varies by state. You’re responsible enough to know you won’t go dumping your whole salary into this thing. Why should you be prohibited from making a little money because you don’t meet an abstract requirement?
I make less than half of that, so count me in the liars. I throw in like $25 extra a month and recycle payments. I’m at like 42 loans now.
When I joined in 2007, they didn’t have all these rules. After I put some money down, they went into a quiet period while they registered with the SEC. That scared the crap out of me because a quiet period sounds exactly like what a shady website would do.
But when they came back online, they had all these new rules. You had to make a certain amount of money. You had to live in certain states. You had to register stuff. They don’t do it because they want you to be a happy investor. They do it because it’s the law. Whatever laws PA demands that internet loan underwriters follow, and whatever regulations they are subject to, are too expensive/arcane/whatever for LendingClub to find worthwhile.
So they don’t let under-$70k people invest because it’s a regulation, and they don’t let Pennsylvanians, et al., invest because they’re not in compliance with PA law.
Fortunately, I soon moved to VA and made >$70k, so I was fine regardless. But again, no one checks.
Ahh, thanks for the info I had no idea you’d been in it since 2007, that’s a long time! But clearly you’ve been pleased with how things have gone.
Well, I’ve taken the plunge. My online savings account has dropped its rate to 1.15% so I thought I would see if Lending Club can help me boost returns on the fixed income part of my portfolio. I’ve put $1,000 in to see how it goes before possibly investing more substantial amounts.
I bought 40 $25 notes going all the way down to an E-rating:
A 35%
B 25%
C 12%
D 10%
E 18%
The tilt towards E-rating was because statistics show that the E notes have actually defaulted less than D notes and the historical return looks good relative to the risk.
The weighted average rate is 11.42% I assume that is before fees and expected defaults (Does anyone know? A search of the Help for “weighted average return” gets zero hits). I have seen expected returns showing fees and defaults allowed for when I submit an order, but have not been able to find that again afterwards - if anyone knows how, please let me know.
As you earn only $5 or so per note, it is not worth it to me to do a lot of research, so I mostly just relied on a filter to find 36-month notes from people who have been employed 2+ years and wanted loans for credit card refi, debt consolidation, weddings or dream vacation, and for people with an income of $4k+ per month. I avoided loans that seemed for too much money. If you have to borrow for your wedding, then you should not be spending $30,000 on it. I don’t trust someone like that to be able to manage their finances well enough to repay the loan.
I found it irritating that so many loans don’t go through, although I suppose it is a good thing that they are vetted. Of my original 40, 10 did not complete. When attempting to purchase 10 more, one did not complete, so I had to go through the purchase cycle three times over a two and a half week period to get fully invested.
But now I am done and will sit back and see what happens.
amarone, I don’t have answers to your questions, but good luck and welcome aboard.
Welcome to the dark side :).
When I choose a loan, I usually add “reviewed by lending club” to the filters - since I’ve been doing that, I don’t think I’ve had any fail to go through. Also, some of the loans might not have gotten full funding, so the borrower decided not to go through (I’d bet that’s the case with some of your lower-grade loans).
It is funny, that blip in the expected returns at the lower grades!
I have 42 or so loans outstanding right now, though not a full thousand dollars in value, since quite a lot of them were purchased with repayments from earlier loans. So far no others have defaulted aside from my very first loan, though my second loan (for adoption) shows a two-notch drop in credit rating in recent months. So things don’t look so great there.
I had another one drop 3-4 notches in a single month… then rebound completely the next month. I wonder if they had something reported incorrectly then removed.
At 40 loans, you’ll have enough repayments to fund a new loan a bit more than once a month (I estimate 80 cents per loan, so that would be 32 dollars a month). So let’s say every 22-23 days you can fund a new loan just from the proceeds.
I know they don’t have a good way to check on the income… but when you register, don’t you have to provide a mailing address? (it’s been so long since I did, that I don’t remember, but I have to assume I did). And what would they do if you signed in with, say, a PA address? Say “sorry!”?
Yes, you have to provide an address. The ‘state’ block is a dropdown list that excludes states that don’t allow this type of investment, so you never get off the registration page.
Would it be possible for you to contact someone about when NC might be available?