Late in February, I decided to start experimenting with Lending Club by investing the $50 bonus that was deposited into my account when I signed up (using a referral link). I chose two loans, which were issued and entered repayment. Last week, I received the first payment from each loan! You can see a snapshot of the payment I received from one loan below:
The “completion date” is the day which the payment hit my account. It takes a few days, because the borrowers pay through an electronic transfer, which takes a few days to go between banks.
So now there’s $1.66 in my account – one payment of $0.86 and another of $0.82, minus the $0.02 “cut” that Lending Club took. I could leave the money there and reinvest it once my account balance reaches $25, or I could transfer the money into my savings account and let it earn interest for a while.
If I just leave the money in my Lending Club account, it will be 16 months (15 months from now) before there’s enough money in the account to invest in a new loan. There would be $26.56 in the account at that point. If I move the money to my bank account, which earns 1.50% interest per year, I would have $26.81 by that time. Not a huge difference – I’m not sure that $0.25 is worth the effort of transferring the money every month. It wouldn’t even allow me to invest a month earlier! So I’m just going to let it sit there, for the time being.
All I have to do now is sit back and watch the payments come in each month (hopefully). So far the experience has been simple, easy, and kinda fun. Grow, money, grow!
I’ll continue to give little updates on my Lending Club account here, but there probably won’t be much else interesting to say, unless one of my borrowers decides not to pay, or pays late. However I would love to get the perspective of a Lending Club borrower! If you’ve borrowed money from Lending Club, contact me about the possibility of writing a guest post for Poorer Than You.