Friday, July 17, 2009

First Lending Club payment fully posted to my account

Since I posted yesterday about the first payment on my first Lending Club investment loan which was due five days ago, the updating process has completed and the first payment has been fully credited to my account. Done! Technically, I probably should say that it took four business days for the payment to post after the payment due date since the payment was due on Sunday.

The payment amount for my $25 share of a $7,700 motorcycle loan was $0.83, consisting of $0.26 accrued interest and $0.57 principal repayment. Lending club charges a 1% service fee, which was $0.0083 or rounded up to $0.01, so my net payment was $0.82, which was simply added to the cash sitting in my Lending Club account (which earns no interest unless I reinvest it.)

My rough calculation suggests that the 1% service fee reduced my nominal 12.53% interest rate by about 0.48% to roughly 12.05%. Still very decent. Over the term of the loan that discount to my rate will rise since although the monthly payment stays the same and the service charge is based on the total payment, the interest portion of the payment trends down to zero.

The Account Activity screen is now updated and shows both the loan payment and the Lender Service Fee.

The first payment for my second investment loan is due today. Just as wth the first loan, I see that the accrued interest is reset to $0.00. I do also see a line on the Loan Performance screen for the loan that shows the payment status as Scheduled, but I see that line for all of my loans. Based on my experience with the first loan payment, I believe that I will see this payment fully posted next Thursday morning.

I just noticed that the Loan Performance screen has a Credit Score Change field that alerts you if the borrowers credit score has changed. For one of my loans I see that their score is Up. Neat feature.

All in all, everything is proceeding smoothly.

Move over Bank of America, Wells Fargo, and Chase... us Lending Club investors are out to eat your lunch! Really.

-- Jack Krupansky

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