One of my 2017 goals is to diversify my investments to include more areas than just the stock market. I invested $2,500 into Lending Club, which is a Peer-to-Peer lending network. Click on this link to learn more about my Lending Club strategy. My initial goal was to invest $2,500 per quarter this year, however I’ve decided to limit my investment this year to $5,000.
This post documents month four of my Lending Club journey. In this month I’ve seen my Adjusted Net Annualized Return go from 6.72% in month 1, up to 7.39% in month 2 to 11.02% in month 3, and back down to 8.29% this month. Monthly variations can be explained by default loans. An account of $5,000 will see dramatic swings in return as loans go into default.
Lending Club Month Four Results
To date, I’ve received payments totaling 537.34. This month I received $158.38. The breakdown of payments are: $47.58 in interest and $110.77 in returned principal. My adjusted net annualized return is now 8.29%. The image below shows the details of my investment and performance.
Many of you have asked if my returns account for past due notes. The answer is yes. A percentage of each defaulted loan is removed each month until the loan is either paid back or written off. Lending Club shows the returns two ways. Here’s a look at the same data above but without defaulted loans. I choose to not look at my returns this way because a loan that is 90 days old, is most likely going to be a bust. I’d rather account for this in advance.
Here’s another view of my portfolio. This image shows some of the same information as above, but it also shows loan breakout by borrower grade.
I expect to fund 10 new loans over the next 30 days, which will take total loans funded to 231.
I’ll be posting monthly updates, so you all can follow along and see how Lending Club performs. I’ll also be adding my Lending Club monthly income to my monthly total income posts.
Do you have money invested with Lending Club, Prosper, or another P2P service? If yes, how are your loans performing?