So I started an account with Lending Club back in February or March, and invested in 100 notes. With reinvestments, I think I'm at about 115 now. I'm quite pleased---I get to help suck profits away from the big credit card companies, and make a little money in the process. Arbitrage! Capitalism at its purest!
But there's something that's been happening that I haven't been able to figure out: a few of the loans I've invested in (5 so far) have been paid in full within a month or two of being issued. I don't particularly MIND; I just don't understand what's going on. Presumably 5% of the people who take out big loans don't magically come up with the cash to pay them back in two months. Is this some sort of weird arbitrage opportunity? What's going on here?
I suppose if you were able to get a better rate somewhere else, you could refinance your LendingClub loan, but... given how fast this has occurred with my notes, I find that hard to believe.
I haven't been able to find anything on the internet about this phenomenon. I've attached a screenshot of the loans. They're all C-F grade loans, both 36 and 60 month.