Lending Club Review – How To Invest In Loans Like A Bank


Hey everyone this is Larry Ludwig from
Investor Junkie Reviewing today Lending Club How would you like to earn higher
interest rates than traditional cds or bonds? Lending Club might be that perfect
opportunity Lending Club is what’s
known as a peer to peer investing company that means as far as if you are a borrower looking to take out a loan you
can go to Lending Club opposed to your regular bank and investors such as myself can invest
in your loan The loan is unsecured meaning there’s no asset tied to that debt be it a car..boat what have you and ti’s no different than a credit card and
you can actually get either three or five year loan and anywhere up to thirty five
thousand dollars so it’s a great opportunity for someone
looking for a loan but today i’m not really i talk about
getting a loan but from an investor’s standpoint be sure to stick around to the end of my
presentation i’ll talk about a three hundred dollar bonus
you can get exclusively through me for lending club uh… Lending Club let me give you
a little background of Lending Club themselves Lending Club started in two thousand and six originally they were a Facebook app in fact they were probably one of the first
facebook applications they then broke off into their own separate web site Let me give a little background of my investment profile
with Lending Club i’ve been investing with them since june two thousand nine i have uh… that’s also over three
years now i have over nine thousand dollars invested with them and currently
in an NAR of ten point eleven percent which equals an ROI of about eight point seven five which is pretty good when compared to
other investments right now it’s pretty hard to get any fixed income at that rate uh… alright let’s login you’ll see the screen is blocked out that
is for security reasons okay here we go so you’ll see here there’s the summary
screen of my account i’m currently getting a ten point eleven NAR NAR or Net Annualized Return is slightly
different than ROI uh… the calculations are slightly
different I’m not to go into the mathematics that the website itself Lending Club has
some details on NAR and they are and it calculates it but just it’s safe to say it’s higher
than our ROI in fact there are a few sites that
discuss it in detail how to take NAR to ROI so uh… uh… in my case my ROI is about
about eight seven five percent which again is not bad uh… currently have a total of over nine
thousand dollars available cash as you can see here is a little over sixty one dollars and for the three years have been
investing with Lending Club but i have fourteen twenty five in interest uh… let’s go down to the notes area so if
you see all my individual notes i have currently three in funding uh… four hundred and fifty two issued and current out of the fully paid i have sevenity seven that means they paid earily they’ve paid it off uh… have a late one note that’s sixteen to thirty days late i have another ten
that are thirty one to one hundred twenty days late and i have charged off eleven eleven
means they’re completely charged off weren’t able to collect
the remaining amounts owed and uh… one of the things that’s definitely you
you understand with Lending Club is uh… unlike a CD can actually have
defaults so in this case the way you minimize
those defaults is you have many loans in my case over five hundred loans makes a very easy to uh… spread out the uh… risk and should there be a default it does
not affect the NAR that much uh… the more loans you have the better off
you are for a stable return so if you want a breakdown the notes at
a glance click on the notes link at the very top of the screen this will show you all the notes that i
own in my case it shows you the interest rates for
those loans the terms of those loans the uh… outstanding principle accrued interest the payment received and the status in
this case it’s showing you the status that’s been charged off first and you go through the list it shows you
current and again shows you I have a total of five hundred and fifty four loans i have uh… my case i have for if you
look at an next screen portfolios i have two separate portfolios the reason was i orginally started in two
thousand nine and wanted to I started investing a certain way and and in april of this year two thousand twelve i decided to change my strategy a
little bit uh… based on the previous
experience with the uh… the returns the defaults stuff that i
had issues with uh… some of the notes and changed my investing strategy
slightly so uh… you’ll see her first portfolio a weighted average of uh…
twelve point eight percent and the new portfolio currently which
again is still pretty new is sixteen point five five percent so
uh… expect that won’t go down but not as much as previously with new portfolio I decided to do much
more riskier assets when originally started with the first
portfolio I did ah… much higher rated loans and in the end I sometimes
Lending Club does not properly gauge or determine the risk of those loans one of the great things about Lending
Club since it all the data you have available to you
is transparent so you can actually go out and do your own risk models from the data
that they have available for all the historical notes that are out there which is really neat so you can
actually do it yourself and fortunately there are a few websites that can do it for you i won’t
talk about in today’s presentation but if you want to you can go to my
Lending Club review on Investor Junkie dot com and you can check it out okay so let’s go to the investment section let’s
say if you wanting to make an investment There are really two ways to make an
investment with Lending Club it is either the automatic method or the manual method I prefer the
manual method you are basically saying okay i want dial it in and i want x percent interest rate return and Lending Club does the rest I personally
don’t like that method I personally like to invest in the notes manually
and won’t even discuss it in this review you more welcome to do if you
wish to do it that way so here are the notes that are currently
outstanding and are currently available to invest in uh… you’ll see here there’s over
eighteen hundred notes uh… these are all individual people uh… that are looking for loans for
various purposes there’s people looking for refinancing refinancing their
credit card debt looking for people to for wedding for small business owners you name it it’s pretty much any
things under the sun and and keep in mind with lending club it’s only prime
borrowers who have to have a minimum FICO score in this case six sixty anything as below that the concert
sub-prime and Lending Club will reject them so Lending Club does all the the
prequalification screening for you all you need to do pick the loans if you
don’t like the returns on that loan don’t pick it okay so in my case I won’t talk specifically about the
filters are set up my again my review lending
club dot com uh… on investor junkie dot com I talked about in quite a detail your more than welcome to go there and find out
the details but what i will say is i’ll only invest in thirty six month notes and i’ve set up pre-screener here
to do that for me so now from again previously eighteen
hundred notes we now only have ninety two notes left so that meet my criteria what i do then is sort by the lowest first so i preferred to go to the highest and go
down from there to pick my notes so we go to the very last page which is page seven and you’ll see here that the highest interest rate is twenty one point four
eight percent if you look at that note you’ll see it’s are currently under
review which means is lending club has accepted the application but has not
totally processed it yet it may wind up rejecting it there’s
been a few cases where i’ve accepted or of invested a should say in certain notes that lending club still had under review and they wound up not getting fully
invested so you get your money back if that
happens on the other so uh… you know you can look for approved
ones that might take some time you made in this case want to do the uh…
review status keep it under review in the guy’s case or this person case
since I don’t know if it’s a he or she there it is months since
last deliquency seventy six I prefer not to invest in any notes have been delinquent same thing with public files on record month since the last record i’d prefer
them all to be blank so I will not be investing in them uh… let’s see in this guy’s case or this
person case it’s still under review to gross income is over nine
thousand dollars they have i also look for the
release credit lines two thousand and to me they have to be at least ten years of
credit district but they have less than ten years i did
not invest in them they have no delinquencies they have no public files which means
they’ve never filed for bankruptcy and uh… i let’s see if they have a
description actually have a long description which i like i i personally do not invested any uh… loans are for small businesses or
student loans i was actually historically of the riskiest i tend to just invest in that ppl consolidation or refinancing the ideal home loans also if you look into refinance or get a
small short-term loan for their house so save remodeling iol so do those so they’ve as friction usually
description of my mind uh… means of serious about this law if
they happened and message in the long description mean means they haven’t
taken the time to fully filled out there of loan application so i i like this one i’ll wind up
putting in this case twenty four dollars a have
a total sixty one you can only do and minimal immigrants of twenty five
dollars each solid twenty five dollars so that’ll show me what order summary at
the top of the screen shows you have twenty five dollars from
one note and i rate is eighteen point five five
percent so let’s find one more to complete this uh… and i don’t like his if there’s
uh… you know soonest cases customer or this uh… or or does not have any employer it’s
and a i tend to avoid those for the same
reason and stacey also have deliquency so
whilst at this one this one works for towards ross uh… milk in brooklyn new york they have a credit line since two
thousand two sent more less the ten year period uh… their gross income per month is
four thousand dollars and they’re looking to borrow sixteen
thousand dollar so there knowing issues i have in this case is
that a high revolving line you’ll zation which means a really at the edge in this case
they are consulting their debt my concerns are at they are not able to
keep up with there uh… debt payments so im pollyanna skip
this one might see this one has no delinquency gross income of six thousand month uh… doesn’t have a year olds agent some
reason not sure why is it unusual and no longer strips insults trust upon you notice obviously if if you see a whole bunch of other than
on notes within the same uh… if you are try to pick the best of the bunch known play wrote skip that one this one looks like a possible match no description unfortunately uh… article response one poetic so now i have so now i have two notes for fifty
dollars total average uh… every is seventeen point
nine one percent let’s actually view the or a complete it so is it shows year-long composition
like acer bolt the loans one club has a rating from aidid g uh… within each uh… rating they have a sobering but what you need to know is that speed
is of the best quality and wish means fear and the lois return i’d she’s on the highest rid uh… if you are but also the most risky so you try to do a mixture unlike a
sural desire a mixture of all sorts of different moms all right so written looks good this one end happily almost completed which is
good and to continue and will place this order and this case you done now back to place
the order wanna do is now cya tomorrow new portfolio because it’s a new loan
after april two thousand twelve and that’s it so now bean vested we’ll take a pro three or four days
before a complete really depends on the how far along his along but premature one of the most distorts the last thing
is my statistics for my investing so one of things as you can break down
the details for investing here sissy here you’ll see uh… i have uh… composition of no ways out
this i’ve decided no longer to invest in a loans i have some bs i have uh… officially
broken up evenly between bcn d have somebody is in the west indies and it’s just based on are pretty rough by filter on so should you hear my breakdown how much
i have house deposits of done which usually give details uh… for
investing for him your purpose okay let’s pretty much the end of this review of
lending club bahut questions be more than happy to
answer those questions you can make comments if you’re from minute to
recommit comes below the below the city of the bottom or if you’re on my website three
comments on the flip itself uh… i’d one of these you bribe
suggestion do is sign up to align mailing list like about quarterly uh… picks up
money club and to some tips insights in little will detail the family with my three
years investing with one club uh… thus far as the special promotion uh… when the club has graciously
allowed me to refer a customers to them and everyone who signs up as three
hundred dollars you must deposit uh… a minimum of ten
thousand dollars with them and you’ll get three hundred dollars from lending
club that’s pretty much it so it’s premature
instant return your planning uh… hoping to additional u_n_ i’ll talk to
you soon

16 comments on “Lending Club Review – How To Invest In Loans Like A Bank”

  1. Eyal Elhayany says:

    a great review
    Thanks

  2. vw1610 says:

    Great review! I just signed up and awaiting fund transfer.

  3. ryan williams says:

    Great review!

  4. Jeremy Strickling says:

    Learned something new today.

  5. PeerInvesting says:

    Larry, great review. I just got started with Lending Club last year and started to make a few videos myself. It's such a great platform and a great way to diversify. Keep up the good work!

  6. Fungus Exterminator says:

    What method do you use to fund the investment?

  7. Ivegotwo says:

    notes are $25 each so I think recommended is $2000.

  8. Cadmium Blue says:

    does that mean I can't get the 300 signing up through you if I have a (small) account with them??

  9. Sam Sitar says:

    also what do i get at the end of a loan? i have to buy through foliofn.

  10. Joshua Galup says:

    Very sad they are not permitted in pennsylvania.

  11. Jose Martinez says:

    after a couple of years do you still continue to invest in Lending Club ? 

  12. andrelle garcon says:

    Thank you so much for this I have been looking for ways to invest

  13. TheGuyWhoSaysOhYeah says:

    Looks like a great way to invest!

  14. TenYasha l RPG says:

    What is an NAR and an ROY?

  15. Mo Khayat says:

    What if you don't want to fulfill the 36 month of your investment.  Can you sell the note to another person?  Is there a penalty?

  16. Sam Khalil says:

    Do you know if I can roll my IRA to Lending Club…..I saw a link on their site…but I was wondering if you had any experience rolling your IRA thx

Leave a Reply

Your email address will not be published. Required fields are marked *