In my previous post I talked about the downgrade of SmartyPig from one of the highest rates around to nothing more to get excited about. After a cooling off period and realizing there isn't awhole lot of options for better rate, we'll probably still close our accounts and move money elsewhere. One place we want to put more money into is LendingClub.
We originally stated 2 years ago with 4 notes of $25 each. As the monthly principal and interest posted into our account I just let it sit there until having enough to invest in another $25 note the minimum amount to invest). The cycle repeated one more time so now we have a total of 6 $25 notes. Since starting we've received $70.15: $56.35 of principal, $13.58 of interest, and $0.22 of late fees. Knock on wood all, notes are current.
So we just upped our ante in the LendingClub this week by adding another $500 to get 20 more notes. With a total of 26 notes, we should expect about $18 a month in payments (both interest and principal.) We'll plan on using these proceeds to get more notes. We can expect to be able to get 2 additional notes every 3 months for the short term future. We'll probably also plan to add some extra money in every few months. This will still be along way off on LendingClub's recommendation of holding a minimum of 800 notes to minimize risk. I'll also point out that we look at this money as investments and not savings since the money is tied up in the notes and isn't liquid. And of course there is risk with the 9.47% average return we expect to realize.
My formula for picking notes is simple. 36 month term only. A, B, or C grade borrower. 1+ year with current employer. Otherwise I'm not picky about what they are borrowing for.
Have you used peer-to-peer lending? Which company? As a borrower? Or investor?
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