Lending Club

So, they are growing up and becoming a bank, and after year-end will no longer offer the ability to invest in loans. I’ve just dabbled in it for a few years and have about $16k, this isn’t a big chunk of my portfolio or anything but it’s been fun. Now, should I move this money into Prosper, or just call it a day and buy S&P index funds?

I’m inclined to do the latter, it has been fun, but so far LC/Prosper don’t seem to return any more than index funds.

I’d also like to point out as I type this the website is telling my my topic is similar to ‘The Devil’s Lettuce,’ LOL. Is it equating ‘club’ and ‘lettuce?’ That’s all I can think of.

ETA: I put this in the sandbox as it seems the Finance section is for professional discussion, hope that’s right.

I had $50K in there at one point, but return was <4% in the end so after only a year or two I started selling off and funneling $$ out. The last bit finally sold off and made it back in my Roth IRA only last week.
It wasn’t worth it for the effort I went through. If 4% is all I can manage it’s not worth the diversification. If I could get 6-7% that would interest me more, and maybe I was a moran about it and the rest of you are getting great returns. But there are so many other ETF’s I could invest in, I just don’t see the point anymore.

Something to consider: Prosper shut down its secondary market a few years back, so if you should ever need to liquidate you won’t be able to.

I was able to manage a 6.43% return from the notes that I bought between 07/2014 & 11/2016. The last of them was recently paid off. I think I got a bit lucky both in terms of timing and note selection…also, small sample size - I only had about $1k invested.

My spidey senses tell me that you participated in the AO thread, so perhaps I’m just telling you something that you’ve already heard.

I was George Frankly on the AO, yes.

My returns have been good, holding around 9% or a bit more. Klaymen, I do recall getting an email from LC in… maybe 2018, saying that many people were complaining about returns, and they had re-tooled their grading algorithm. Anecdotally, my returns around that time bottomed out, I want to say in the 5.5% range, and have steadily picked up since then. Still, I can get 9%-ish in the S&P long-term, so there isn’t much meat here if any.

The point about liquidity is good, I often forget that aspect of the platform. It’s not a big deal-breaker, but obviously liquidity is worth something.

I think the work required to transfer funds out of LC, and into Prosper, and then manage Prosper… probably just going to funnel money out as loans pay and buy Russell 2k index funds.

I just noticed today that Lending Club cashed out all of my remaining notes in October. I didn’t have much left there but it’s nice to be done. My remaining funds will be going into a stock investing IRA. I guess you can say I was asleep at the switch that I didn’t notice before.

I still have about 20,000 in a Prosper IRA and 3400 in a Prosper taxable account. I am not adding to Prosper but I feel like letting these run. My taxable account has a Prosper stated return of about 5% and the IRA is running about 7%.

Early in your investment cycle Prosper returns are significantly overstated and the methods that Prosper uses do not discount delinquent notes until they charge off.

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Is that over the previous year? …for all-time?

The Ally money market account now gives 3.5%.

I’ve recently landed a chunk of money, so I’m contemplating if I want to get back into it. I see that the currently available listings for AA rated notes give anywhere from 5.3% to almost 10%…a mean average of about 8%.

Those figures are for the life of the accounts and the taxable account goes back about 8 years. The IRA account goes back about 5 years. At times I have made meaningful withdrawals from the taxable account.

As I said before Prosper overstates the returns, especially early in the account’s life.

The degree of overstatement depends on your level of delinquency. I have not tried to exactly pin down the extent of overstatement and because these accounts are pretty well aged I’m not too concerned about the overstatement.

1695814, If you think it would be helpful I could give you some delinquency history on my Prosper book of business. In the past I think Prosper gave out a lot of data but I don’t think that’s the case anymore.

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Closing out my Lending Club experience I had an IRR of about 6% over a 6 and a half year run.

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