My December 2009 Lending Club Performance Update – Earning a 15% Annual Rate of Return

by Hank Coleman

As of today, I’m enjoying a 15.33% annualized return on my investments with Lending Club.  Lending Club is the awesome peer to peer lending investment website where you can lend money without a bank straight to individuals who need it the most.  The beauty of the service for investors is that you can earn a great interest rate on your investments.

lending-club-december09

For those of you who are not familiar with Lending Club, there are usually about 180 loans on the website at any given time waiting for lenders like you and me to come along and fund them.  And, you can search through them all by several criteria. 

Check out my review of Peer-to-Peer Lending, what it is, and how to get started.

My portfolio of loans primarily contains a mix of Grade C, D, and Grade E loans.  I do not waste my time with conservative A or B class loans which do not pay very much interest.  One of the most important things is picking out which loans to invest in.  Here are some of my lending criteria that I use when choosing loans with great returns.  While savings accounts, money market funds, and certificates of deposit are paying minuscule rates of return, I continue to be quite happy with my Lending Club experience and the excellent return that I have been earning.

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{ 2 comments… read them below or add one }

Daniel December 30, 2009 at 3:17 pm

I really wish that I lived in a state that allowed me to participate in P2P lending. Living in D.C., I’m prohibited, and there’s no good reason why I shouldn’t be allowed to participate. So here I am stuck with investing in my low rate savings account..

Congratulations on your success!

Matt SF December 30, 2009 at 6:42 pm

15% sounds pretty sweeeeet! Big congrats thus far! I noticed a few real gems in the Grade D loans (gov’t employees, low DTI’s, etc.) but was too chicken to take the plunge so early.

Instead, I went a little more conservative with the B and C grade loans, from older borrowers with 5-10 years at the company, low DTIs, etc, but thought it best just to test the waters with safer plays since this is my first time out.

If I can duplicate your/our successes thus far, I might scale it up 10 fold just to see if I can make it work on a larger scale.

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