My Lending Club Story

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Over the next few weeks I'm publishing the entirety of my free report on “How to Make Money with Lending Club” as blog posts, so you can access them without having to download the report. If you'd like to read everything ahead of time, go ahead and download the report today! Last week's topic was “What is Peer to Peer Lending?

It began in January 2011. I had started my first “real” job after college 6 months earlier in June 2010. I was frustrated with the up and down returns of the stock market and looking for a way to expand my monthly cash flow.

Real estate in the area I was stationed was not an option, plus I knew I’d be moving within 18 months. Certificate of Deposits and savings account interest rates were abysmally low. None of these investment vehicles produced monthly payments or had a rate of return above 2%. Then I found Lending Club.

Lending Club is the New Kiva

This is Melito, an ice cream salesman in the Philippines. I helped expand his business with a $25 loan on

The peer-to-peer lending concept was familiar to me from Kiva, another P2P lending site. Kiva is focused on charitable investments in businesses in the third world. This is commonly known as microfinance: loaning money to people who don’t have access to traditional financial institutions. People who need loans but can’t get them from banks or can’t get a reasonable interest rate apply for loans that are funded by people from around the world.

Most investors have only $25 in each loan, meaning that they have very little to lose on each defaulted loan. I knew the default rate for Kiva was as low as 1%. Could Lending Club provide similar low risk with high return potential?

At first, I was apprehensive. The returns seemed too good to be true.

  • Who was borrowing money at such a high interest rate?
  • What was the default rate like?
  • How much data did the company have to backup that people would actually repay the loans?

lending-club-after-three yearsAll of the questions and more were clearly explained on the website. The transparency of the lending process and the amount of data available to the investor is fantastic. You can find lots of stats here. There’s even more data once you sign up for the service.

I’ve been investing in Lending Club now for over two years. In that time, I’ve only invested roughly $1100 into the service. Up until this year, I took a very lazy and uneducated approach to selecting which loans to invest in. Now I’m taking it much more seriously.

My Results After Three Years of Lending Club

After nearly three years of investing in Lending Club, here are my results. Remember, this was with almost no research and a very relaxed approach to selecting which loans were invested in. Had I taken more time to research, I’m sure my returns could have been much greater. I am now filtering much more aggressively and being very selective with the loans I invest in.

Loan Performance Summary – generated from

ROI 6.56% (+-0.43%)
Rate of Loss (Default/Charge Off) 5.36%
Total Lent 90 loans, $2,207
Remaining $1,294
Net Gain $136.25 (+-$10)
Markups Paid (secondary market) $2
Average Loan Grade C1
Average Interest Rate 14.89%
Average Loan Age 18.7 months

A 6% return is not negligible, especially when there was no work done on my part, CD and savings accounts interest rates are so low, and this is an investment very uncorrelated to stock market or property value performance. In an era of low FDIC insured interest rates and an extremely volatile and possibly overpriced stock market, Lending Club offers just one more way to diversify your income and investments.

So how does Lending Club work? And, more importantly, how can you get it to work for you?

Tune in next week to see How Lending Club Works. If you can't wait, download the free report here now!

3 thoughts on “My Lending Club Story”

  1. I’ve always been interested in joining Kiva or Lending Club for about 2 yrs now but never pulled the trigger because I was unable to locate a blog that provided insight or experience from using either site. Finally I found one and I am very interested in continuing to follow this blog and read more about your Lending Club experience. Great Job and keep em coming!

    • Kiva is a great way to support your fellow man in developing nations around the world. Lending Club can also be viewed as a socially responsible platform, as 80% of the loans on LC go towards debt consolidation and paying off high interest credit cards. If my P2P loan can help someone become debt free, I view that as a win win for everyone.


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