Considering investing in Lending Club notes. Has anyone tried it and what were your experiences?
It’s hard to liquidate
I thought I was in a monogamous relationship. Turns out I was in lending club.
I invested in Lending Club notes for about 4 years, my return after losses and fees was not bad (in 6-7% range), but I stopped reinvesting and tapered off the account because I suspected that defaults would increase somewhat during a downturn (like credit card defaults). The returns tend to be front weighted, since defaults take some time to happen.
Yeah, LendingClub notes are more like bonds, which have maturity dates. But you normally get 4 to 7 percent returns by auto investing, which is better than bonds.
I've put in 5k over the last 10 month's with one lump sum and a regular rolling amount. With zero defaults so far (which I understand is uncommon in the first year anyway), my ROI is ~12%. My problem is scale. Even buying into notes at $50 each, I have over 100 notes and there were only another 100 I could buy into. I also maxed 401k, espp, and other investments already so this is experiment cash.
That's awesome in a year in which markets have underperformed. Do you manually select notes or have you set it to automated investing?
Automated with an mix of 36 and 60 month notes. I'm probably switching to $100/note to scale further.