Author Topic: Lending Club New Jersey  (Read 2068 times)

Icecreamarsenal

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Lending Club New Jersey
« on: December 29, 2015, 01:15:53 PM »
Lending Club just sent me an email saying that New Jersey residents can now participate in Lending Club, so I transferred $2500 and chose automated investing D-G to dip my toes into the water.  Money takes 4-5 business days to be deposited.  Looking forward to see if I too can finally partake in some of these double-digit/close to double-digit returns!

JLee

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Re: Lending Club New Jersey
« Reply #1 on: December 29, 2015, 01:24:58 PM »
Interesting. I might look at that in 2016 after my IRA is maxed out.

AM43

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Re: Lending Club New Jersey
« Reply #2 on: December 30, 2015, 08:20:12 AM »
Glad to hear NJ residents can finally invest in LC.
I like LC a lot.
Not sure about double digits returns(although def possible), but 7-9% is def doable.

xenon5

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Re: Lending Club New Jersey
« Reply #3 on: December 30, 2015, 10:17:03 AM »
Keep in mind, double digit returns on Lending Club are unlikely in the long term.  See their statistics page:
https://www.lendingclub.com/info/statistics-performance.action

The median return for portfolios with an average age of 24-30 months is 7.4%.  If you bump up the weighted average interest rate of those notes to portfolios of 18+%, the median return jumps to 8.4%.  Only 10% of investors with such portfolios have made a return greater than 10.5%.  The average return of Vanguard's high yield corporate bond fund since inception is 8.48%, with a much lower expense ratio than lending club (0.23% investor/0.13% admiral vs. ~1% for Lending Club)

I'm not saying Lending Club is necessarily a bad investment. Just have realistic expectations for your long term return, and don't let the high interest rates of new notes let you believe that your actual return is much higher than it is.
« Last Edit: December 30, 2015, 10:28:20 AM by xenon5 »

Icecreamarsenal

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Re: Lending Club New Jersey
« Reply #4 on: January 03, 2016, 11:13:29 PM »
Keep in mind, double digit returns on Lending Club are unlikely in the long term.  See their statistics page:
https://www.lendingclub.com/info/statistics-performance.action

The median return for portfolios with an average age of 24-30 months is 7.4%.  If you bump up the weighted average interest rate of those notes to portfolios of 18+%, the median return jumps to 8.4%.  Only 10% of investors with such portfolios have made a return greater than 10.5%.  The average return of Vanguard's high yield corporate bond fund since inception is 8.48%, with a much lower expense ratio than lending club (0.23% investor/0.13% admiral vs. ~1% for Lending Club)

I'm not saying Lending Club is necessarily a bad investment. Just have realistic expectations for your long term return, and don't let the high interest rates of new notes let you believe that your actual return is much higher than it is.

Got it.  I'm excited about lending club because the returns are more consistent year over year, whereas the returns since inception data that you quote for that vanguard bond fund hide the fact that it was down a percent and a half this past year.