Lending Club is sooo hot right now 🙂 So I started a small account. $2500 to start and $50 every other week, so it isn’t even a noticeable fraction of our portfolio, more of an experiment for now. The small recurring investments provide some entertainment as well for now, while payments aren’t enough to support more loan purchases all that often.
My biggest concern is the liquidity of the assets, as they aren’t super liquid, but it has been interesting so far. I only invest in $25 increments and try to balance across grades for something like 16% nominal return. My filters are: minimal delinquencies in the last 2 years (usually 0 except for higher rate loans), 3 years employment, and credit card/debt consolidation. And I choose the loans closest to completion because they might offer two benefits; vetting by others and funding decision soon.
It does seem that a large number reach the “in review” phase before being kicked back. It makes sense for Lending Club to not review too much info on loans if they don’t even get funding, but my anecdotal, to-lazy-to-check the facts numbers tell me it is like 1/3 of the loans getting denied after receiving funding commitments. It’s just a bit of a pain, no big deal.
I’ll let you know how it goes. So far no late payments or anything interesting to report.