It occurred to me that it has been some time since I've updated people on my Lending Club lending. I've been Lending Club for years and years now... and typing that sentence makes me feel really old.
A friend of mine was asking me if lending money on Lending Club is really worth it. I decided to back and dig into my previous updates to give her a quick snapshot of how it has worked for me. The obvious caveat is that someone else's performance will be different, but my performance is actually a little below the norm according to Lending Club. Anyway, I sent her a couple of years worth of data and posts that I've written:
- May 2011 - $3045.10
- July 2011 - $3231.02
- September 2011 - $3285.47
- May 2012 - $3385.32
- October 2012 - $3571.36
Here's what it looks like today:
So that $3045.10 of account value in May of 2011 is now nearly $3800! I've added no new money, just reinvested the payments of previous loans and let it snowball. That's around ~$750 on $3045 of principle in about 39 months. (Look at me getting all mathy). I found a calculator online and that rate of return comes out to about 6.75%. That's different than the amount that Lending Club shows in the image, but their calculation is over the entire time I've had the account (and is undoubtedly more complex).
In a world where banks are paying fractions of a percent, this is much better. (Especially when they pound their chests at giving "three times the nation average", which amounts to fractions of a percentage point.) Of course, this there's risk with Lending Club and it isn't like a bank account at all. I think that risk is minimal since I've had 456 notes, a significant sample size by almost any measure.
The thing that I like most about Lending Club is that I can see myself using my Lending Club account as a source of income in 30 years when I'm 67. Doing the math and compounding this interest, it will be $21,289 at that point. The cost of living will be more... and it's not like $21,289 will sustain me for years, but it's enough to take $200 a month out for years. That will hopefully cover some bills, which isn't bad considering that I just put money in once.
These small decisions add up. Get started at Lending Club today.
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