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re: Tell me about lendingclub.com - pretend I'm a 4-year old child
Posted on 1/19/15 at 10:13 am to LSUtigerME
Posted on 1/19/15 at 10:13 am to LSUtigerME
It's the definition of peer-to-peer lending. Effectively it is just credit card receivables, as they are unsecured. However, you are compensated for the risk of being unsecured with a much higher rate. Since you can buy in chunks as small as $25, you can become very diversified. The site gives over 100 credit metrics, but their underwriting and rating systems are very good, so I just buy as many $25 chunks as possible to achieve greater diversification. When you hit 100 notes, you have achieved sufficient diversification, but I try to get as many different notes as possible.
2
Posted on 1/19/15 at 11:20 am to TheHiddenFlask
I have some candy in my black van that you can enjoy while I explain on it our road trip.
Posted on 1/19/15 at 1:35 pm to TheHiddenFlask
I have around 850 notes, $25 in each, I set my investing at 7% A loans, 45% B loans, 35% C loans, 10% D loans, and 3% E loans, I stay away from F and G loans, great returns but to risky for me.
I get a Net Annualized Return so far right at 12%, however every time I get over $25 in my account it is put back into another loan so my compounded return is just over 20%.
They have done over 6 Billion in loans, the average charge off is 2% of loans, with only $25 per loan I expect to lose less then I would pay in brokerage fees over the same time frame.
Since I don't take money out and let it compound at around 20%(after fees and charge offs)I expect to double my money every 3.5 years.
I get a Net Annualized Return so far right at 12%, however every time I get over $25 in my account it is put back into another loan so my compounded return is just over 20%.
They have done over 6 Billion in loans, the average charge off is 2% of loans, with only $25 per loan I expect to lose less then I would pay in brokerage fees over the same time frame.
Since I don't take money out and let it compound at around 20%(after fees and charge offs)I expect to double my money every 3.5 years.
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