Meet Spends with Lending Club

Old Feb 1, 2013, 8:36 pm
  #1  
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Join Date: Dec 2012
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Meet Spends with Lending Club

Hey all,

Just thought I would share this recent opportunity I found out about and am about to try where you can deposit up to $5,000 with a credit card to fund a new Lending Club account. When I called, the representative said it would not be considered a cash advance, but I haven't tried myself.

I would only do this if your going to invest for a long time horizon, 8 months+, as the representative said if you withdraw the money too quickly it will just be refunded to your credit card. However, if you fund with a CC, wait a while, and link your checking, he said there shouldn't be any problems.

Also, LC is running an offer where you can invite a friend and both people receive $100 with a deposit of $2,500. Message me your e-mail and I can invite you and then you can invite me as I still need to fund my account too and we'll both get $200 for free.
mburns813 is offline  
Old Feb 1, 2013, 10:03 pm
  #2  
 
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I've done Lending Club, and yes the $5k counts as a purchase. Very easy. I actually invested it with Lending Club. My returns look good so far.

So feel free to PM me for an invite as well.
hobo13 is offline  
Old Feb 2, 2013, 1:32 am
  #3  
 
Join Date: Oct 2012
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8 months? I don't like 8 days when manufacuturing spend

Originally Posted by mburns813
Hey all,

Just thought I would share this recent opportunity I found out about and am about to try where you can deposit up to $5,000 with a credit card to fund a new Lending Club account. When I called, the representative said it would not be considered a cash advance, but I haven't tried myself.

I would only do this if your going to invest for a long time horizon, 8 months+, as the representative said if you withdraw the money too quickly it will just be refunded to your credit card. However, if you fund with a CC, wait a while, and link your checking, he said there shouldn't be any problems.

Also, LC is running an offer where you can invite a friend and both people receive $100 with a deposit of $2,500. Message me your e-mail and I can invite you and then you can invite me as I still need to fund my account too and we'll both get $200 for free.
farwest101 is offline  
Old Feb 2, 2013, 5:55 am
  #4  
 
Join Date: Oct 2006
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Has anyone funded a Lending Club account with a Citi card? If so, was the transaction processed as a cash advance?

Also, is there a hard pull for signing up as an investor?
MillenniumFlyer is offline  
Old Feb 2, 2013, 5:55 am
  #5  
 
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Originally Posted by mburns813
Hey all,

... this recent opportunity I found out about ...
Did you happen to search FT for this Club before posting?

Appears multiple times in the getting spending up thread. LINK
jcmitchell21 is offline  
Old Feb 2, 2013, 12:21 pm
  #6  
 
Join Date: Sep 2012
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can you do multiple CC deposits to add up to $5k or you can only do it once?
kr0n0s is offline  
Old Feb 2, 2013, 12:32 pm
  #7  
 
Join Date: Dec 2004
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Originally Posted by mburns813
I would only do this if your going to invest for a long time horizon, 8 months+, as the representative said if you withdraw the money too quickly it will just be refunded to your credit card. However, if you fund with a CC, wait a while, and link your checking, he said there shouldn't be any problems.
Tried the latter a while back. No dice. They won't let you pull it back via linked checking unless you actually invest it.
HikerT is offline  
Old Feb 2, 2013, 3:32 pm
  #8  
 
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Just to be clear. This only works for the initial deposit. I'm not offered an option as a current member.
joesmoe is offline  
Old Feb 2, 2013, 4:53 pm
  #9  
 
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Originally Posted by kr0n0s
can you do multiple CC deposits to add up to $5k or you can only do it once?
Only once. And in fact, you can only do a 'fund with CC' once, so you either do $5K then, or you settle for less.
hobo13 is offline  
Old Feb 2, 2013, 5:07 pm
  #10  
 
Join Date: Jan 2005
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So I'm far from an experienced Lending Club investor, but I figured I'd share my limited experience.

I opened my Lending Club account in the fall of 2012, after watching the peer-to-peer lending space for several years. I had a SPG Amex card that needed $5K spend, so it seemed like a good opportunity. I opened the account, and funded it. No issues. LendingClub gives you a call to chat and give you some tips. No pressure, they just want you to understand the concept. They were really nice.

I slowly started to pick some loans. I read a little on various websites and blogs to get some tips. Mostly I've been picking C,D rated loans, as I think I read somewhere that this is the sweet spot of risk / return. I have a very simple approach, and look for the following:

Purpose = credit card refinancing or debt consolidation (I'm not going to loan money for someone to take a vacation!)

Loan Rating: mostly C,D with a few B and E.

Term: 3 years. I avoid the 60 month notes.

Total loan amount: <$10k, and preferably not a round number like $10k (where it seems that somebody just guessed, rather than figuring out exactly how much they need to pay off a debt)

It took me a couple of months to get my $5k invested because I only put $25 in each note and there are only so many notes in funding at any given time. And then there is a fairly sizable number of notes that never get funded (I'm not sure exactly why). So you have to check back occasionally. And in reality, I think you have to plan to check back regularly because as the P&I trickle in, you either make new investments, withdraw your balance, or else leave your money uninvested. So do plan to put a little bit of time into it -- maybe 5 minutes per week. It's not quite like buying an index fund where you can look at it once per year! (I think LendingClub might have some automated screening tools you can use, but I haven't tried them. I suppose if they had screening tools, maybe they could have an auto-reinvest feature?)

After several months, all of my notes are current. One of them was paid off early (in the matter of weeks), which, if it happened a lot, could be annoying. LendingClub claims that my annualized return is 16% right now, but of course, that's because I haven't had a default yet. They actually predict that my portfolio should earn about 11% net of defaults and the LendingClub fee -- sounds pretty good to me.

Overall, I am happy with the experience so far. I view the $5K as an 'aggressive' component of my portfolio, and sort of like play money to invest with.

I hope this helps. If you want a referral, let me know.
hobo13 is offline  
Old Feb 3, 2013, 5:44 pm
  #11  
 
Join Date: Dec 2012
Location: Atlanta
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Originally Posted by hobo13
So I'm far from an experienced Lending Club investor, but I figured I'd share my limited experience.

I opened my Lending Club account in the fall of 2012, after watching the peer-to-peer lending space for several years. I had a SPG Amex card that needed $5K spend, so it seemed like a good opportunity. I opened the account, and funded it. No issues. LendingClub gives you a call to chat and give you some tips. No pressure, they just want you to understand the concept. They were really nice.

I slowly started to pick some loans. I read a little on various websites and blogs to get some tips. Mostly I've been picking C,D rated loans, as I think I read somewhere that this is the sweet spot of risk / return. I have a very simple approach, and look for the following:

Purpose = credit card refinancing or debt consolidation (I'm not going to loan money for someone to take a vacation!)

Loan Rating: mostly C,D with a few B and E.

Term: 3 years. I avoid the 60 month notes.

Total loan amount: <$10k, and preferably not a round number like $10k (where it seems that somebody just guessed, rather than figuring out exactly how much they need to pay off a debt)

It took me a couple of months to get my $5k invested because I only put $25 in each note and there are only so many notes in funding at any given time. And then there is a fairly sizable number of notes that never get funded (I'm not sure exactly why). So you have to check back occasionally. And in reality, I think you have to plan to check back regularly because as the P&I trickle in, you either make new investments, withdraw your balance, or else leave your money uninvested. So do plan to put a little bit of time into it -- maybe 5 minutes per week. It's not quite like buying an index fund where you can look at it once per year! (I think LendingClub might have some automated screening tools you can use, but I haven't tried them. I suppose if they had screening tools, maybe they could have an auto-reinvest feature?)

After several months, all of my notes are current. One of them was paid off early (in the matter of weeks), which, if it happened a lot, could be annoying. LendingClub claims that my annualized return is 16% right now, but of course, that's because I haven't had a default yet. They actually predict that my portfolio should earn about 11% net of defaults and the LendingClub fee -- sounds pretty good to me.

Overall, I am happy with the experience so far. I view the $5K as an 'aggressive' component of my portfolio, and sort of like play money to invest with.

I hope this helps. If you want a referral, let me know.
Thank you for sharing your experience. I started two weeks ago, but only did 1K as initial investment with a CC.
bocaspbx is offline  
Old Feb 3, 2013, 11:25 pm
  #12  
 
Join Date: Jul 2010
Posts: 144
Originally Posted by hobo13
So I'm far from an experienced Lending Club investor, but I figured I'd share my limited experience.

I opened my Lending Club account in the fall of 2012, after watching the peer-to-peer lending space for several years. I had a SPG Amex card that needed $5K spend, so it seemed like a good opportunity. I opened the account, and funded it. No issues. LendingClub gives you a call to chat and give you some tips. No pressure, they just want you to understand the concept. They were really nice.

I slowly started to pick some loans. I read a little on various websites and blogs to get some tips. Mostly I've been picking C,D rated loans, as I think I read somewhere that this is the sweet spot of risk / return. I have a very simple approach, and look for the following:

Purpose = credit card refinancing or debt consolidation (I'm not going to loan money for someone to take a vacation!)

Loan Rating: mostly C,D with a few B and E.

Term: 3 years. I avoid the 60 month notes.

Total loan amount: <$10k, and preferably not a round number like $10k (where it seems that somebody just guessed, rather than figuring out exactly how much they need to pay off a debt)

It took me a couple of months to get my $5k invested because I only put $25 in each note and there are only so many notes in funding at any given time. And then there is a fairly sizable number of notes that never get funded (I'm not sure exactly why). So you have to check back occasionally. And in reality, I think you have to plan to check back regularly because as the P&I trickle in, you either make new investments, withdraw your balance, or else leave your money uninvested. So do plan to put a little bit of time into it -- maybe 5 minutes per week. It's not quite like buying an index fund where you can look at it once per year! (I think LendingClub might have some automated screening tools you can use, but I haven't tried them. I suppose if they had screening tools, maybe they could have an auto-reinvest feature?)

After several months, all of my notes are current. One of them was paid off early (in the matter of weeks), which, if it happened a lot, could be annoying. LendingClub claims that my annualized return is 16% right now, but of course, that's because I haven't had a default yet. They actually predict that my portfolio should earn about 11% net of defaults and the LendingClub fee -- sounds pretty good to me.

Overall, I am happy with the experience so far. I view the $5K as an 'aggressive' component of my portfolio, and sort of like play money to invest with.

I hope this helps. If you want a referral, let me know.

GREAT summary, hobo -- really appreciate this!

One quick question -- admittedly, I didn't look too hard for it on the website, but what kind of fees does Lending Club hit you with?

I assume they take their cut before they pay the proceeds of the loan to you?
footypjman is offline  
Old Feb 4, 2013, 5:33 am
  #13  
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I've been a LendingClub investor for almost a year now and want to validate everything hobo has said.

I'd recommend anyone interested in peer to peer (P2P) lending to read as much as possible before jumping in. Peter Renton runs a website, lendacademy.com, and has authored a couple of books on the subject. He's very approachable and his books are pretty straight forward.

I started out with a $2500 investment to get my feet wet and learn the system. I'm now an order of magnitude higher and anticipate P2P lending to be 10-15% of my entire investment portfolio. I invest solely in D-G notes. Unlike hobo, I do have two defaults with several hundred notes in my portfolio. They bothered me at first but then I realized that it's just the price of business. If there was no risk there would be no return. My rate of return per LendingClub is 19.8%, which is artificially inflated (to make a long story short, they only count interest on currently invested notes) . My actual rate of return is closer to 17.5%.

You are provided fundamentals when you invest in a loan: the FICO score, debt to income ratio, the reported income, etc. Lending Club has a proprietary formula to divide loans based on risk and they letter them A-G. They further stratify the loans into subgrades 1-5. The letter/number/length of loan combo determines the interest rate paid.

Lending Club collects 1% of payments made. I just had a payment on a $35K 60 month loan that I have $25 invested in. My fractional receipt was $0.69; $0.23 was principal and $0.46 was interest. LC took 1 cent (which will be averaged out over the life of the note).

The most important thing when investing in these types of notes is to diversify. According to LC statistics (that they freely provide), approximately 1% of investors with 100 notes have lost money since inception but no investors with >800 notes have. 87% of people with 100 notes made more than 6% and 93+% of people with more than 800 notes made more than 6% returns.

There are risks with these investments and, despite the FolioFn trading platform, the invested notes are fairly illiquid. I would not recommend investing money that you would need in a 3 year horizon... I definitely would not invest money you think you might need in 6-12 months.

The only real way to meet spends using LC is to use a CC to invest money you'd be investing anyway... it's not a useful method to churn cash as they have enacted barriers to prevent this.
emma dog is offline  
Old Feb 4, 2013, 7:54 pm
  #14  
 
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Originally Posted by footypjman
GREAT summary, hobo -- really appreciate this!

One quick question -- admittedly, I didn't look too hard for it on the website, but what kind of fees does Lending Club hit you with?

I assume they take their cut before they pay the proceeds of the loan to you?
Emma explained this above -- better than I could have.
hobo13 is offline  
Old Feb 4, 2013, 8:03 pm
  #15  
 
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Very interesting topic!
mnscout is offline  

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