Wednesday, April 21, 2010

Still have one more Lending Club investment loan to get issued

All but one of my latest batch of Lending Club investment loans were issued as of Monday. Somehow I had made a mistake and inadvertently selected a loan that was not already "Approved", which means that although it had reached full funding, it failed to be issued due to a lack of final documentation from the borrower. I was out for a few days, but I just placed a new order for a new "Approved" investment loan.

I also had accumulated enough interest and return of principal to make yet another new loan investment.

Together, the two new loans average 18.67% return, with a historical default rate of 5.95% and a service charge of 0.73%, resulting in a projected return of 12%.

Meanwhile, my Net Annualized Return has inched up to 15.19%. I have a total of 51 notes, pus the two new ones from today that are still in funding.

Even with this doubling of my total porfolio size, my Lending Club investment is still a modest size experiment. Even doubled again it would still be modest size. If all goes according to plan (not that I actually have a plan), by the end of the year I should finally have a real investment in Lending Club loans.

My goal continues to be a 15% return, but I figure I need a little buffer so that repayments (and maybe even defaults) don't push me below my goal too frequently. I may in fact keep pushing upwards with loans in the 16% to 18% range until I get my return up to 16% and then gradually work the average back to 15.5%.

So far, my Lending Club portfolio has been perfect, with no delinquencies or even late payments. I started investing with Lending Club back in June 2009.

This is still just an experiment for me since I have no prior experience with this type of investment, but so far in has been very encouraging. I intend to double the size of the experiment in June or July (assuming my work income continues.)

-- Jack Krupansky

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