So my money cleared and this morning I started to put it to work at Lending Club.
I started with LendingMatch. I reviewed the initial loans discarded half and then searched for more in the credit tranches my portfolio lacked.
Starting with the negative (ending with the positive)…
- It took a long time to review each listing to make sure it had the extended credit parameters that I wanted. Advanced search is needed asap.
- When searching for listings to add to an existing portfolio the search contained listings already in the portfolio. It was a bad experience to re-review a listing several times.
- I can’t seem to find a way to keep my money invested. So I will have to regularly check in to make sure the listings become loans and to reinvest any proceeds.
- I found enough loans, but only barely. I would have preferred a slightly different mix. Here I am just being nit picky as I never find 20 listings at a single time on Prosper. However, that is usually because of rate not credit quality.
ending with the positive…
- The interface is super easy
- There are a lot of fine listings. I told you I was being nit picky earlier.
- All loans are autofunding. The rate you see is the rate you get.
Here is the mix of Lending Club credit grades of my initial 20 bids ($500)…
A (30%)
B (5%)
C (25%)
D (5%)
E (15%)
F (10%)
G (10%)
This portfolio has a weighted average rate of 11.63% and an expected monthly payment of $16.45.
It has a risk level (what is this?) of 2/5.
I did the bidding this morning and already 3 listings have completed and are in review.
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7 comments ↓
Thanks for the feedback. Advance search and automatic reinvestment (standing orders) are high in Lending Club’s development priority.
I hope you first started using LendingMatch (diversified portfolio recommendation) and then worked your way adding/deleting new loans to conform your ideal portfolio using search and browse (loans a la carte). It would certainly be very time consuming if you had tried building the portfolio on your own from scratch.
Regarding your question about risk, we use relative scale that represents the risk of the portfolio based on its composition and the historical default rates of the Loan Grades contained within, as described here. More information about the risks involved can be found here: https://secure.lendingclub.com/info/about-risk.action
Specially interesting are the sections about Investment/Portfolio Diversification and Balancing Risk vs. Reward.
Yes I started with LendingMatch… Which found an initial 20 listings ($500). I throw out 1/2… In the best credit grades I throw out 0% bankcard utilization. In the worst credit grades I throw out 3 or more recent inquires or a current delinquency.
I read the webpages recommended. I would add words around the numbers for risk level. Give the lender a warm fuzzy feeling. So maybe 2/5 could be…
“A fairly conservative portfolio, with enough risk sprinkled in to up the returns.”
A marketing wordsmith I am not, but you get the idea.
On the lender side of the fence – I just got a loan funded at the Lending Club. It was only for $2K, but it funded in a matter of days. The support was very helpful. These guys are tiny compared to Prosper, but if they continue this level of quality service, they should be able to really compete against Prosper.
I did not notice your Lending Club loan post until I had already extended my first Lending Club loans. I too was a little disappointed with the quantity of loans when I made my first loans there, but the quality seems good on the initial sniff test.
It is interesting that your loans also scored a 2 out of 5 on the Lending Club Risk Scale when compared to my loans. In fact, it inspired my to post this comparison of Lending Club Risk Scores across three portfolios.
[...] Many things happened over the course of a year that I hadn’t expected. In fact, if you had told me I don’t think I would have believed you. Even in my niche my advertising pricing power is high. And I was able to start LendingClub, Kiva, and Microplace investments. [...]
[...] feed or take a look at the site map. Thank you for visiting!Late night web browsing brought me view Rate Ladder’s first Lending Club portfolio. He posted some good suggestions for improving Lending Club as I think I did on my review of my [...]
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