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Lending Club Investment Strategy

Lending Club is America’s #1 peer-to-peer (P2P) lender. The idea is simple: Lending Club allows you to be the bank, lending money to borrowers that you choose based on their credit worthiness. You can also lower your risk by borrowing to several lenders at once; spreading your money across a number of loans, just like a bank.
 
 
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Screen shot of CapitalistReview Lending Club returns using given strategy (updated 5/27/17)

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Capitalist Review has had a substantial amount of capital tied into Lending Club loans since 2010. Lending Club is a publically traded company and was named one of America’s most promising companies by Forbes, making it a reliable business partner. We also believe Lending Club will provide a higher rate of return over any other traditional fixed-income investment (assuming the strategy listed below is followed to a tee). Lending Club also provides excellent returns for investors without the constant up and down that comes with investing in stocks.  When the stock market is down 10% for the year, a Lending Club Investor portfolio can remain steady, making it ideal for those who do not like to ride the emotional waves of the stock market. Instead of seeing your portfolio lose thousands of dollars in value due to a bad day on the markets, Lending Club simply provides steady returns month after month after month.  At Capitalist Review, we use a Lending Club Investor Portfolio that should provide better returns than 99% of other Lending Club lenders, providing around 8%-10% annually. This is our method:
 

Lending Club Portfolio

  • Income Verified?:  ALWAYS select YES here
  • Inquires in the last 6 months: 0
  • Home Ownership: Own or Mortgage
  • Delinquencies (in the last 2 years): 0
  • Monthly Income: $5000 or more
  • Do not invest in the states of California, Nevada, Florida, or Arizona
  • Invest in C,D,E,F,G graded loans only
  • Reinvest loan payments

A few items to note in regards to the Lending Club Investor Portfolio presented here…

    • Investing in loans that are income VERIFIED is one of the most under-looked strategies at Lending Club
    • Avoid Arizona, California, Florida, and Nevada as they are notorious for high default rates (3 of these 4 are the top 3 in Bankrate’s article “Top 10 states for auto loan delinquencies“)
    • Try to invest in only E, F, and G loans but consider C & D if you’re having trouble getting enough E-G loans
    • Spread loans out over amounts of $25, $50, or $100 depending on how much you have to invest (investors with $100,000 or more to lend out can afford to make larger loans of $100), but most Lending Club investors should stick with $25 loans
Lending Club’s historical return predicts a return ranging from 6.69% to 10.77% for loans graded between C and G, but we should be on the higher end of that range using the Lending Club Investor Portfolio strategy outlined here.

 

Do you have any questions about the Capitalist Review Lending Club Investor Portfolio strategy? Please use the Capitalist Review “contact page” to reach out or simply leave a comment below.

Like this strategy? You should! Do us a favor and sign up for Lending Club here 🙂

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