Anybody else using this as an alternative to a savings account? This year wasn't bad. In previous years I've seen as much as 9%.
This year I'm going to actually start funneling money into it instead of just doing it as a hobby.
>>1021369
Returns for 2015.
Interested: pls explain via greentext
>>1021385
> Sign up for a Lending Club account
> Transfer funds from your bank account
> Pick out loans people are asking for based on a variety of criteria and the reason they need a loan
> Criteria include FICO, income, current debt, previous defaults
> Loans have variable interest rate from 5% - 28% based on risk factors
> Majority of loans are debt consolidation
> Minimum investment in a single loan is $25
> Once a loan has enough willing funders it starts and you receive payments monthly.
> You can set up reinvestment criteria as well if you don't want to manually pick out loans.
Also if you sign up with this link I get $50, but I'm mostly interested in opinions on it over getting referrals.
https://www.lendingclub.com/landing/invest.action?reg_referrer=Member_1071116&progId=29376472
>>1021399
> Majority of loans are debt consolidation
Too spooky 5 me
>>1021402
For what it's worth In the past I've invested in 50 loans and of the 50 only 3 eventually defaulted.
From what their prospectus says the default rate is pretty consistent and if you are either diligent with manual loan picks or you just invest in 100+ loans you'll always make 4%+ returns
So the only way you lose money is if the borrower defaults on the loan? I've never heard of this before, seems interesting though. Any more info? How much have you invested and what returns have you seen?
>>1021421
You can also lose a small amount of money if they pay it off really early since a part of your investment profits are paid to LC (this is how they make money) and if they pay way early you essentially get a penalty that goes to LC.
As a I said I've only invested 1,250 in the past and made returns on that of 6-9% annually.
This year I'm going to divert 500/mo into it since even 4% is way way better than my savings account rate.
>>1021371
6-7% isn't bad at all for the risk. Illiquid nature of investment is hard to get over though.
I think you're crazy to have this be your main investing activity. It's much more built for a small % of your overall portfolio on the risky illiquid bucket.
>>1021457
Definitely not my main investment activity. Still putting another 500 in traditional liquid savings, 1000 in 401k and 500 in other equity/fund investments each month.
I make ~ 7500/mo so this feels comfortable to me. In general the only other investments I've been making that have performed as well or better were individual equities. I feel like I got lucky with those. ATVI and MSFT for example did amazingly well and offset other losses I would've had.
Its an investing experiment for me. I'm still against flat investments right now for fundamental reasons. They make up less than 5% of my portfolio. Right now the risk/reward is not there to grow it past this. With US raising interest rates and looking to do it fairly regularly soon. Then it'll be scintillating and I'll move it to about 10%.
I make about 10% on my D-grades. 2-3% above inflation isn't really stellar for me.
