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.
All 100 loans that I funded with my $2,500 have passed the 30-day mark, which means I should-be been paid by every borrower. The majority of my loans were paid, in fact most were paid early. There are 2 of 100 that haven’t been paid. These loans are not in default yet. They are still in the payment grace period.
Lending Club Month One Results
I’ve received payments totaling $81.07. The breakdown of payments are: $26.12 of interest and $54.95 in returned principal. My adjusted net annualized return after the first month is 6.72%. The image below shows the details of my investment and performance.
When I created this account I setup Automated Investing. This means that Lending Club invests my principal into loans automatically; based on a set of criteria that I set. I chose this feature because I don’t have the time or interest in finding 100 loans to invest in. Lending Club’s automated investing service also acts as a reinvestment service. As soon as my repayments reach $25 dollars a new loan is funded. I see this as a great way to speed up account growth and continually grow my passive income.
$75 dollars of the payments I’ve received have already been used to fund three loans at $25 each. Not bad. I started the month with 100 loans and ended it with 103 loans. Overall re-payment of my principal and interest will go up slightly month-over-month, nothing dramatic, but increases none the less. I liken this to DRIP investing.
Looking forward, at this pace I can expect to have funded 36 new loans this year. 2017 should end with 136 loans funded. This is awesome, especially considering that I am not adding more money from my savings account to increase my loan amount. I’m simply leveraging the first $2,500 invested and new interest over and over. Of course this number is subject to a few variables, the most important is the number of loans that stay active. I assume some percentage of overall loans will default. This sucks, but that’s why I fund loans with a max amount of $25. A handful of defaults will not stop this train from rolling down the track.
I’m very happy with my 1st month results. I plan on 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?