Four New Features from Lending Club

Lending Club
The Lending Club blog announced four new features today:

  • Notes Already Invested in
  • Charged off loans and notes
  • Give your friends $50
  • Reinvesting Monthly Payments

These are all very useful features. I checked them out in my Lending Club account. But first, to give you some idea of the possibilities of peer to peer lending here are a few details of my rickety lending. Currently I have 44 notes in Lending Club that have a weighted average interest rate of 11.45%. None of my notes have ever been late. Based on outstanding principal the composition by rating are A 6%, B 55%, and C 39%. It seems to me that this is a very good interest rate when compared to Certificates of Deposit.

Notes Already Invested In

The “Notes Already Invested in” feature was one that I had requested in October. The part that is most useful to me is the ability to exclude notes already invested in when browsing and searching. I just have to select the check box at the top of the search page.

Charged off Loans and Notes

As far as “Charged off loans and notes” are concerned, I don’t have any of my notes that are past due so there is nothing for me to see — yet. Here is what Rob has to say:

We have added a “charged off” status to your account, so that you can now differentiate defaults from charge-offs. While “default” occurs automatically when a loan is 120 days past due, a loan or note only gets charged off when Lending Club considers it unrecoverable after a review of the collections activities (which can happen before or after 120 days). These charge-offs will appear in your end of year statement so that you can report them as losses for tax purposes.

Give Your Friends $50

The “give your friends $50” feature appeared at first to me to be a gift certificate I would have to buy. But no, it is a promotion and a very good one. Lending Club explains their generosity:

Well, we spend around $50 attracting a new customer anyway so instead of making an ad agency richer, we thought it would make more sense to let you invite your friends and deposit $50 in their account, make them $50 richer and make you look good in the process!

I have already sent invites to several friends and family who will appreciate $50 to play with. The slick interface allowed me to choose from my email contacts and edit the email invitation if I wanted.

Reinvesting Monthly Payments

“Reinvesting Monthly Payments” offers the ability to schedule a search that runs automatically when your cash balance equals or exceeds a given amount. This feature currently uses LendingMatch; Lending Club will be adding the ability to use the more granular credit criteria soon. I am using this feature by setting the minimum amount of $25 and the lowest target average interest rate. As soon as my cash balance reaches $25 I should be notified by Lending Club of the order that is waiting. I’m not interested in the order — I pick my own notes — I just want to be notified that I have enough to invest in another loan. We will see if it works the way I have set it up.


22 Feb 2009 A Lending Club Investment Analysis (PDF) was conducted by Javelin Strategy & Research (January 2009). Accounting for loans paid off early, late payments, defaults, and a Lending Club 1% service charge, the overall investment return still averaged 9.05%, with a median return of 10.48%, based on a Weighted Average Return on Invested Capital.
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  1. It sounds like you are getting a great return on Lending Club. I’m pretty happy with it as well.

    I’m glad to see they keep improving the site.

  2. Tom, Yes, I am happy with Lending Club. Prosper is returning 17.5% though one loan is in collection and another is late. Your website is very useful, has a lot of information about peer to peer. I’ve subscribed to your feed.

  3. Rick,

    Glad to have you as a reader.

    By the way, I enjoy the missionary posts as well. I served in Japan myself.

  4. Tom, Your blog has a lot of useful information that I am interested in. Thank you for your efforts. We are hoping to have Daniel out to Mongolia soon but we are not holding our breath on getting any photographs. What mission in Japan? I work with two engineers who served in Japan.

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