One of my 2017 goals is to diversify my investments to include more areas than just the stock market. I’ve invested $5,000 into Lending Club, which is a Peer-to-Peer lending network. Click on this link to learn more about my Lending Club strategy.
This post documents month five of my Lending Club journey. 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% month 4.
This past month, my returns have continued the downward trend. In the month of June, my annualized return was 7.11%. This past month, I had my first loan charge off. The person never paid, so the loss was $25. I also have a loan at 90 days default. This loan will be written off this month. The borrower passed away. It’s a sad reality of being a lender. Non-payment of debt comes in many forms. I didn’t expect death to be one of these forms.
Lending Club Month Five Results
To date, I’ve received payments totaling 794.31. This month I received $226.65. The breakdown of payments are: $53.00 in interest and $173.65 in returned principal. I also funded 8 new loans. This is not new money, but returned principal and interest that gets reinvested. My adjusted net annualized return is now 7.11%. The image below shows the details of my investment and performance.
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’ve read other bloggers Lending Club updates and many have mentioned that B and C grade loans default at a higher than D and E loans. I’m not experiencing the same results. My defaults are as follows:
It’s not uncommon for loans to go 15-30 days late. Many borrowers go late, but pay their installment before 30 days. I only worry when a loan has gone past 30 days late.
I’ll be posting monthly updates, so you all can follow along and see how Lending Club performs for me. I’ve also added 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?