Both companies had a strong lending month in January. Lending Club led the way with $34.0 million in loan originations, up from $31.0 million in loan originations during the month of December. Prosper issued $10.8 million in loan originations during the month of January, up from $9.5 million during the month of December. Lending Club issued 2,602 loans to borrowers during the month and Prosper issued 1,469 loans.

On a year over year basis, Lending Club saw a 229% increase in monthly loan volume compared to January 2011, when it facilitated $14.8 million in loans. Prosper’s monthly loan volume has grown 322% on a year over year basis compared to January 2011, when it facilitated $3.4 million in loan volume.

At current growth rates, Prosper and Lending Club will hit the $1 billion mark in loan originations sometime between May and July of this year. I previously predicted that Prosper and Lending Club will hit $1.4 billion in loan volume by the end of the year.

January was a relatively slow news month for the peer-to-peer lending industry. Prosper was most active in launching a new mobile site and offering a new IRA investment option for investors.

This article (Lending Club Surpasses $500 Million in Loan Originations, Prosper Tops $300 Million) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Prosper and Lending Club facilitated a total of $40.5 million in loans between borrowers and investors during the month of December, marking the strongest month in U.S. peer-to-peer lending history.

Lending Club lead the way, issuing $31,007,025 across 2,267 loans. This is the first month where Lending Club issued more than $1 million in loans per day.  Lending Club’s loan volume growth was up a whopping 12.68% over its November total of $27,518,650. The significant month over month growth can be primarily attributed to Lending Club issuing a larger average loan size. During the month of November, Lending Club’s average loan size was $13,329. In December, the average loan size increased to $13,677. There was a 1.5% increase in the total number of loans that Lending Club made between November and December.

Lending Club’s future growth is currently limited by the loan capital that investors make available. A Lending Club executive recently told me that the company ratchets its marketing efforts up as investor demand increases. It’s possible that Lending Club will continue to see significant growth in 2012 as long as the company can keep attracting investors.

Prosper also had a strong month in December, facilitating a total of $9,500,643 across 1,380 in loans. Prosper is now at the point of surpassing the monthly loan volumes that it had seen during its first peak in 2007 and 2008. Prosper saw a 5.5% increase compared to its November loan volume total of $9,003,672. Prosper’s largest investor, worth-blanket2, has now invested more than $10.25 million in notes on Prosper.

Prosper and Lending Club has now issued a total of $740 million in loan volume across 89,018 notes. At current rates of growth, the companies will have issued a combined total of 100,000 loans in early to mid-April. The two companies will also likely hit a total of $1 billion in loans in May or June of this year at current loan volume rates.

2012 Predictions

It’s looking like 2012 will be a massive year for peer-to-peer lending. In December 2012, I anticipate that Prosper will see around $20 million in monthly loan volume and Lending Club will see about $55 million in monthly loan volume. I also predict that Prosper and Lending Club will facilitate a total loan volume in 2012 that’s comparable to what the two companies have facilitated up until this point. It would not surprise me to see the two companies issue $600 million to $800 million in loans to borrowers in 2012.

I predict that 2012 will mark the entry of a third significant competitor into the peer-to-peer lending business in the United States. I don’t anticipate that that the business model used by a new competitor will be identical to that of what Prosper and Lending Club are using. I would guess the most likely scenario is that an established financial institution will try to get into the business of peer-to-peer lending.

This article (Prosper and Lending Club Facilitated $40 Million in Loans in December) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Lending Club explained the move on its website, “Larger loans need to attract investments more quickly than small loans in order to fund in the time available. So for a limited time, Lending Club is waiving the 1% service fee2 on all new investments made in loans of $20,000 or more – for the entire lifetime of that loan. Terms and conditions apply.”

The company also noted that larger loans tend to perform slightly better than smaller loans on its platform. Lending Club stated that notes above $20,000 have returned a net annualized return of 10.5%, whereas loans between $15,000 and $20,000 have yielded a NAR of 9.97%. Loans between $10,000 and $15,000 have yielded a NAR of 8.92%. Loans between $5,000 and $10,000 have yielded a NAR of 8.13% and loans smaller than $5,000 have yielded a NAR of 7.44%.

By waiving the service fee that investors pay to Lending Club, investors will see an improved net annualized return of 0.42% and 0.75% depending on the loan’s term and the interest rate of the loan. Lending Club noted, “an investor with a projected return of 8.52% with the service fee would have a projected return of 8.96% without the service fee – an overall increase in the projected return on this loan of almost 5%.”

Lending Club is likely dropping its service fee on a test basis to increase investor demand in larger notes. Because borrowers with larger loan sizes have much larger payments, investors tend to see them as riskier investment options.

Here’s the fine-print associated with the offer:

Lending Club will waive the 1% service fee for the lifetime of the loan on investments made no earlier than December 29, 2011 and made in loans greater than or equal to $20,000. Lending Club reserves the right to change or discontinue this offer at anytime, any change or discontinuation would only affect loans issued after the effective date of the change or discontinuation. This offer only applies to investments made in loans that meet the criteria of the offer at the time of issuance. The offer only applies to standard borrower payments during the original term of the loan, either 36 months or 60 months depending on the term of the loan. The offer only applies to regular payments made on the loan and does not apply to recovery and collection fees or the like. Lending Club will credit your account for any fees incurred within 60 days of payment, if any.

This article (Lending Club Waives Fees on Large Loans) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

If you are going to invest in loans on Prosper and Lending Club, you need to have a solid loan selection strategy. If you were to invest $25.00 in every loan that Lending Club has made, you would get a ROI of 6.69%. Although this is a solid rate of return in today’s market, you can do much better by only investing in loans that meet a few specific credit criteria. If you only invest in loans that meet the specific criteria that I mention below, your ROI would increase to 9.48%.

Here are a few building blocks to consider using when developing your investment strategy on Lending Club or Prosper:

• Few Credit Inquiries – Borrowers that have had more than 2 credit inquiries in the last six months are much higher credit risks than borrowers who have had 2 or less credit inquiries. Consider only lending to borrowers that have had 0 credit inquiries within the last 6 months.
• Many Open Credit Lines – Borrowers that have at least 10 open credit lines are actually less risky than borrowers that only have a few open. Of course, borrowers that have too many open lines of credit are also higher risk. If a borrower has more than 30 open lines, you probably should avoid them.
• Avoid Certain Loan Types – Avoid educational loans, moving loans, green loans and business loans. These types of loans consistently underperform other types of loans on Lending Club.
• Avoid Borrowers with Public Records – Borrowers that have public records consistently underperform those that do not.
• Lend to High-Income Borrowers – Borrowers that report higher incomes ($5,000 or more per month) consistently outperform borrowers with lower incomes.
• Lend to Borrowers with Mortgages – Borrowers that have a mortgage consistently offer a better risk profile than borrowers that are renters or own their home free and clear.
• Avoid “A” Loans – Extremely low-risk borrowers with “A” credit grades simply do not offer a great rate of return. Instead, loan to borrowers with B-G loans that are likely to repay their loans.

Of course, you should create your own strategy for Prosper and Lending Club using LendStats and other tools to find loans that are solid credit risks. The components to the basic strategy I mentioned above are great building blocks.

If you want to find loans on Lending Club that meet the criteria that I outlined above, use this link to find matching loans on LendStats. Simply login to your Lending Club account, then open all of the note links in a new window and select the “invest” button if the loan hasn’t already been fully funded. If you’re a prosper investor, use this link to find loans that match.

This article (How to Develop a Solid P2P Lending Investment Strategy) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

This changed over the weekend after working with Michael from Nickel Steamroller on his portfolio analysis tool. I asked Michael if he could modify his tool and to break down the data by portfolio. Michael also added the ability to only use loans that have originated within a specific date range, which helps factor out variables such as the average loan age.

As a reminder, here are the strategies that I’m using on Lending Club:

• The Common Sense Strategy – This is my original strategy which relied on weeding out borrowers that common sense would indicate that are likely to default.
• LendStats “A” Loans Strategy – The goal of this strategy is to develop a portfolio that will have absolutely no defaults or late payments. It involves investing in low risk A1-B3 loans that meet some specific criteria. Out of the 863 loans that meet this filter in Lending Club’s history, only 2 have ever defaulted.
• LendStats “B-C” Strategy and LendStats “D-F” Strategy. These two strategies are based solely on creating filters on LendStats that have historically performed well.
• The Crowd Sourced Strategy - The idea of this strategy is to invest in loans that get funded quickly. Any loan that is less than a week old and is at least 70% meets this criteria.

So far, here’s how each portfolio is doing:

(Ignore the “Strict” portfolios; they are same as the B-C and D-F strategies that I’m using)

The average age of my loan portfolios are still very young, so it’s hard to praise or condemn a strategy with any great certainty at this point, but it does appear that following the crowd is probably not the way to go. My “Crowd Sourced Strategy” already has a number of late payments, which is troubling since the portfolio is only 90 days old. My “Common Sense” strategy will likely perform okay, but not great over the long run. I have the most confidence in my LendStats “B-C” Strategy and LendStats “D-F” Strategy and will likely be only investing in them from this point forward.

I’m also feeling pretty good about the strategies that I’ll be using in Prosper. The strategies that I’m using are pretty in-line (although not exactly) with what Peter Renton teaches in the P2P Lending Wealth System. I’ve already decided to make a $10,000 investment in loans on Prosper this month yet. Although, given the strictness of the filters that I’ve created, it will likely take a couple of months to get that money fully invested. It’s a bit disappointing to wait around for money to get invested. It’s either that or let the money sit around in my ING account and earn 0.9%.

This article (Evaluating the Success of my Lending Club Strategies) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

The $97.00 video series consists of eight video modules. There are three videos that introduce the concepts of peer-to-peer lending, discuss what risks are involved and what you need to know about peer-to-peer lending before you start investing. There are two videos about investing with Lending Club and two videos about investing with Prosper. The final two modules explain Lending Club’s trading platform and Renton’s current peer-to-peer lending investment strategy.

Renton said in an email that, “I have taken the most useful parts of the 192 blog posts from the Social Lending Network as well as plenty of new information that I have never shared publicly before and squeezed it all into 3  hours of video.” In his the first video of the series, Renton said that the goal of the video series was to help investors beat the average rates of return that peer-to-peer lending investors are seeing.

I don’t know that the P2P Lending Wealth System video series will provide any new significant insights if you’ve been investing in loans on Lending Club or Prosper.com for a while, but if you’re a new peer-to-peer lending investor and are considering putting any significant amount of money into loans on Prosper.com or Lending Club, spending the $97.00 and taking three hours learning about peer-to-peer lending via this course is almost certainly worth your time.

The course can be accessed at p2plendingwealthsystem.com.

This article (P2P Lending Wealth System Video Series Now Available) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

November was a great month for my peer-to-peer lending portfolio. My Lending Club balance is now about $95,000 after an additional $10,000 investment that I’ve added last month. All of my money is now fully invested using the strategies that I’ve outlined in the blog post, the Great Lending Club Experiment.

I now have a total of $94,866.00 in my Lending Club account and am getting a reported net-annualized return (NAR) of 13.11%. My NAR has again risen this month, from 12.87% to 13.11%. Of course, my NAR is artificially high because the average age of my notes is only a few months old. As the notes in my portfolio age, a share of them will default and get charged off. This will lower my NAR. I anticipate that about a year from now, my NAR will be somewhere between 8% and 9%. There are now a total of 1,838 loans in my Lending Club account, up from 1,602 last month, with an average note size of $54.00.

I’m starting to get the first hint about how well my different loan strategies will perform over the long term. My “Common Sense” strategy has had by far the most defaults, but this is because the average age of loans in this portfolio is about a year older than my other portfolios. Out of the new portfolios I’m testing, I’ve had 5 notes from my “Crowd-sourced Strategy” go into default. This strategy was to simply select loans which had a lot of interest from investors (loans that funded quickly). It’s initial underperformance might be an indication that following the crowd might not be the best idea. I’ve also had 3 loans in my “LendStats D-F” portfolio go into delinquency. None of the loans in my “Lendstats B-C” portfolio or my “Lendstats A” portfolio have gone into delinquency yet.

Overall, I’m still very happy with how my Lending Club investment is performing. I’m initially getting more in interest payments than I had anticipated each month because most of the loans which will default haven’t defaulted yet.

I also plan on putting some money into Lending Club’s competitor, Prosper, sometime early next year. I don’t believe I’ll be adding any more money to my Lending Club account for the time being, for asset allocation reasons. My first priority in 2012 will be to fully fund our backdoor Roth IRAs. After that, I will put some money into Prosper to try out a few strategies before putting any big money into it.

This article (My Peer-to-Peer Lending Investments: December 2011 Update) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s a press release Lending Club issued regarding its ranking on the list:

SAN FRANCISCO – Dec. 2, 2011 – Lending Club (http://www.lendingclub.com), the leading platform for investing in and obtaining personal loans, today announced it has been named to Forbes’ America’s Most Promising Companies list. Lending Club ranks No. 20 on the list of 100 privately held companies, and is one of just three financial companies included on this year’s list.

“We are honored to be recognized alongside up-and-coming companies likeSecondMarket, Box.net and Evernoteas one of America’s Most Promising Companies,” said Lending Club CEO Renaud Laplanche. “This has been a stellar year for Lending Club, as creditworthy borrowers and individual and institutional investors alike continue to recognize the value we provide. We feel that our inclusion on Forbes’ list is further evidence of the impact we are making on the financial industry and our future growth potential.”

Forbes’ list of America’s Most Promising Companies features 100 privately held up-and-comers with compelling business models, strong management teams, notable customers, strategic partners and precious investment capital.

To sharpen its search, Forbes teamed up with CB Insights, a Manhattan-based data firm that tracks investment in high-growth private companies. With $650,000 in grants from the National Science Foundation, CB has developed complex software called Mosaic that mines myriad online sources (from press releases and social networks to job boards and court filings) to come up with one, algorithmically derived score that measures a private company’s health. Forbes married Mosaic’s data-crunching with old-fashioned reporting to assemble a list of rising stars with bright growth prospects. To view the complete the list, please visit www.forbes.com/ampc.

Lending Club’s inclusion on Forbes’ list comes at the end of a strong year for the four-year-oldcompany. Lending Club has originated over $430 million in loans through the platform andpaid investors more than $36 million in interest[i]. Other 2011 highlights for Lending Club include adding Union Square Ventures as an equity investor and partner, the Conservative Credit Fund welcoming Peter J. Thomson as an anchor investor and recognition by the World Economic Forum as a 2012 Technology Pioneer.

By focusing on prime and super-prime quality borrowers, Lending Club has established a four-year, $430 million track record in which Prime Consumer Notes generated 17 consecutive quarters of positive returns and average annual returns of 5.5 percent to 12 percent depending on loan grades.[ii]

This article (Lending Club Named to Forbes’ America’s Most Promising Companies List) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Prosper.com and Lending Club, the two largest peer-to-peer lending companies in the United States, facilitated 3,506 loans during the month of November, with a total loan volume of $37.4 million.

Lending Club issued a total of $28,332,600 in loans in November, an increase of about 3% above its October volume of $27,482,550. Lending Club issued 2,232 loans in November, up from its October loan count of 2,118. Lending Club has now issued a 40,268 loans totaling $429,289,125 in loan volume. At its current pace, Lending Club will reach the $500,000,000 mark near the end of February or in early March.

Prosper issued a total of $9,003,672 in November, also up about 3% from its October loan volume of $8,706,068. Prosper facilitated 1,330 loans in November, up from its October total of 1,203 loans. Prosper has been steadily increasing its monthly loan volume since early 2010 and is now finally passing to the numbers that it saw at its first peak in 2007 and 2008. Prosper has now issued a total of 46,483 loans totaling $280,052,473 since it launched its service in 2006.

Peter Renton of Social Lending Network reported that Prosper received a significant boost from institutional investors during the month of November, noting that six of the top twenty investors in Prosper notes are new to the list this month. Renton also noted a significant influx from Prosper’s largest investor during the month of November, Worth-Blanket2.

November was a significant news month for the peer-to-peer lending industry. A new entrant, SoMoLend, launched a peer-to-peer lending service in Ohio. Peerform revised its business model with its new “Loan Options” program. Prosper ran several promotions and received $9 million in new venture capital and Lending Club was named one of America’s Most Promising Companies.

This article (Prosper and Lending Club Issued $37.4 Million in Loans in November) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

October was a fantastic month for my peer-to-peer lending investments. I put an additional $10,000 into my Lending Club account, bringing my account balance into the mid $80,000’s. I was almost able to get my new investment fully funded by the end of October, using five strategies in what I’m calling the Great Lending Club Experiment.

I now have a total of $84,057.66 in my Lending Club account and am getting a net-annualized return of 12.78%. My NAR increased significantly from last month’s NAR of 11.71% because I did not have any charge-offs this month. My NAR will decline over the course of the next year as loans age and default. There are now a total of 1,602 notes in my Lending Club account with an average note size of $54.00. I had some new delinquencies this month, which is to be expected. Out of my 1,602 loans, 14 of them are in funding, 1,530 are issued/current, 4 are 16-30 days late, 10 are 31-120 days late, 1 is in default, and 3 have been charged off.

So far, it’s too soon to tell which of my lending club strategies will outperform the others. None of the loans that I have invested in since August have become delinquent yet, but I anticipate they will start to show up during the next several months. Using LendStats, I have a pretty good idea of how well a few of my strategies will work, but there’s no way to track how the “crowd sourcing” strategy I’m using will work.

Overall, I’m very happy with how my Lending Club investment is doing. I’m hoping to an NAR of 10% over the long term. Early next year, I might start putting some money into Prosper as well. I understand that repeat borrowers are a fantastic investment in Prosper, so I might put some money in and use a standing order to fund those loans. Prosper also allows investors to access higher risk borrowers, which could also be a worthwhile investment.

This article (My Lending Club Performance – November 2011 Update) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s the press release

SAN FRANCISCO – Nov. 3, 2011 – Lending Club (http://www.lendingclub.com), the leading platform for investing in and obtaining personal loans, today announced that a record $400 million in total loan originations have been issued through the platform since inception.

The milestone comes less than four months after Lending Club reached $300 million in total loan originations in July. A record $27.5 million in personal loan originations in October contributed to the milestone. Lending Club loan originations are growing by more than 150 percent year-over-year, and the platform has now paid investors more than $33 million in interest.[i]

“Lending Club has had a monumental year, with growth averaging 10 percent month-over-month and continuing to accelerate,” said Lending Club CEO Renaud Laplanche. “We believe the rapid growth in capital invested through our platform, coupled with the growth of our team to include executives with decades of experience in investment management, has us poised to finish the year with a bang, and move into 2012 with tremendous momentum.”

By focusing on prime and super-prime quality borrowers, Lending Club has established a four-year, $400 million track record in which Prime Consumer Notes generated 17 consecutive quarters of positive returns and average annual returns of 5.5 percent to 12 percent depending on loan grades.[ii]

In addition to passing the $200 million, $300 million and $400 million milestones, 2011 highlights for Lending Club have included welcoming Union Square Ventures as an equity investor and partner, the addition of more than $30 million in new platform investment capital in September alone, announcing Peter J. Thomson as the anchor investor in LC Advisors’ Conservative Credit Fund, and obtaining recognition by the World Economic Forum as a 2012 Technology Pioneer. The company also expanded its LC Advisors team in October with the hire of former Angelo, Gordon and Co. partner Brad Pattelli, and Jeff McCarthy, former SVP of Jefferies & Company, Inc.

This article (Lending Club Hits $400 Million in Loan Originations) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s the release:

SAN FRANCISCO – Oct. 19, 2011 – Lending Club (http://www.lendingclub.com), the leading platform for investing in and obtaining personal loans, has appointed Jeff McCarthy, former senior vice president at Jefferies & Company, Inc., as Director of LC Advisors (LCA), a wholly owned subsidiary of Lending Club.  Based in San Francisco, McCarthy will focus on institutional sales and marketing and will be instrumental in the development of new investment products. He joins Jon Palan, Director, Institutional Sales, in these efforts and will report to LCA President Brad Pattelli.

“Jeff is joining LCA at a crucial time in our development,” said LCA President Brad Pattelli. “We’re experiencing rapid growth as Lending Club products emerge as an increasingly relevant component of any fixed-income strategy. Jeff’s background uniquely positions him to play a key role in expanding our offering and continuing to ramp up assets under management.”

As senior vice president of Jefferies & Company, Inc., McCarthy built and ran the capital introduction business for the prime brokerage group in the western United States. During his tenure, Jeff drove strong growth in the prime brokerage business, expanding the hedge fund client base from a few initial clients to over 350 clients with combined assets in excess of $15 billion.  Before joining Jefferies, McCarthy served as COO and director of marketing for two hedge funds, where he raised seed and early-stage capital, structured multiple partnership vehicles, negotiated distribution agreements and performed all non-portfolio related functions at the firms.  

“I am thrilled to be joining the LCA team,” said McCarthy. “LCA offers investors a true alternative investment in an otherwise crowded and often undifferentiated investment arena.  Investors seeking higher yields, with lower volatility and low correlation to other assets are faced with few options.  LCA is uniquely positioned to provide such a solution to these investors.  I look forward to contributing to LCA’s continuing success.”

Lending Club continues to experience unprecedented growth with over $30 million in new investment capital attracted in September to fund loan originations that are growing by more than 150 percent year-over-year. As of October 18, 2011, the company surpassed $390 million in total loans originated since inception.

Focusing on prime and super-prime quality borrowers has enabled Lending Club’s platform to generate consistent returns to investors, while offering consumers interest rates well below traditional alternatives for similar borrowers. 

This article (Lending Club Appoints New Executive to LC Advisors) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

In order to qualify for the bonus, investors must enroll in the bonus program and transfer funds into their account by October 31^st. Investors must also have their funds fully invested by November 30^th, 2011.

Here’s the fine print, “* To receive your bonus, all funds must be (1) newly transferred between the date you enrolled in the program (but not earlier than October 1, 2011) and October 31, 2011, (2) continuously maintained in your Lending Club account and (3) fully invested on the Lending Club primary platform market by October 30, 2011 to receive your bonus. Existing account balances and transfers prior to your program enrollment date will not be counted towards satisfaction of the necessary load to earn this bonus. The transferred funds that qualify you for this bonus offering will be locked for investment purposes only and unavailable for withdrawal. You acknowledge and agree that Lending Club reserves the right to withdraw the full original value of the bonus amount delivered to you upon violation of any of these terms. Failure to fully invest the new funds by November 30, 2011 will result in your forfeiture of the bonus amount. Transactions in the secondary market (the trading platform operated in by FolioFN) do not count as “investing funds” or towards unlocking the bonus. This bonus payment is taxable so please consult with your personal tax advisor. You are responsible for any taxes related to this offer. Void where otherwise prohibited. This offer may not be combined with any other offer.”

This article (Lending Club Offering 1-3% Cash Bonus on Large Deposits) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

September was a significant month for my peer-to-peer lending investments. I invested $60,000 into my Lending Club account during the month of August and was able to get almost all of it invested by the end of September, using five strategies in what I’m calling the Great Lending Club Experiment.

I now have a total of $70,037.33 in my account and am earning a net-annualized return of 11.71%. My NAR declined from 12.86% because I had two notes that were charged off. I did not place any additional new investments into my Lending Club account in September, but did receive a $1,200 deposit bonus from Lending Club for the $60,000 I invested in August.  I did place an additional $10,000 into my account in the beginning of October, but I haven’t decided which of the strategies I’m using I’ll put that money into.

There are now a total of 1,241 notes in my Lending Club account with an average loan size of $57.00. Out of those notes, 1,226 are issued and current, 13 are late and 2 are charged off. There was only one new delinquency last month. Of course, my average loan age is very young. There will certainly be a significant increase in the number of late payments and defaults during the next couple of years.

I have a pretty good idea of how well the empirically-driven strategies will perform (the “lendstats” strategies) because they are based solely on historical data. Another strategy that I’m using, which can’t be scored based on historical data, is to invest in loans which get funded quickly. I call this the “crow-sourced strategy.” I am also continuing to test my “common sense” Lending Club strategy. I’ve had great success, but there are still some consumers that wonder whether or not Lending Club scam s consumers—they don’t..

It’s far too early to determine which of my portfolios are performing better than any of the others. All of my late payers are on notes which were setup before the beginning of my experiment. I anticipate that the “common sense” strategy won’t perform as well as some of the others, simply because the average age of each loan in the portfolio is older than the average ages in the other strategies.

This article (My Lending Club Investments – October 2011 Update) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s the press release:

SAN FRANCISCO – Sept. 29, 2011 – Lending Club (http://www.lendingclub.com), the leading platform for investing in and obtaining personal loans, has appointed credit fund manager Brad Pattelli as President of LC Advisors (LCA), a wholly-owned subsidiary of Lending Club, to manage all LCA funds and to continue the growth in assets under management and the expansion of LC Advisors’ client base through the introduction of targeted credit-based investment products. Pattelli will be a member of the senior management team of Lending Club and will anchor LCA’s East Coast presence.

“We are thrilled to welcome Brad as a key member of both the LCA and Lending Club teams. His vast experience raising and managing fixed income funds should ensure the continued success of our existing funds and the development of new investment products,” said Lending Club CEO Renaud Laplanche. “Under Brad’s leadership, we expect that LCA will continue to rapidly grow assets under management and better serve the needs of our high net worth and institutional investors.” 

Prior to joining LCA, Pattelli was a partner at Angelo, Gordon & Co., a $23 billion registered investment advisor specializing in alternative investments. As the co-portfolio manager of the leveraged loan group, Pattelli led triple-digit growth in assets under management and revenue through the creation of new loan-related products, while delivering solid returns to clients. Pattelli’s two decades of investment experience includes managing money for high-net-worth individuals, family offices and institutional investors across a multitude of industries, asset classes and alternative investments. Before his time at Angelo, Gordon & Co., he held sales and analyst positions with Merrill Lynch and Salomon Brothers.

“Lending Club has the potential to profoundly transform the traditional US banking system,” said Pattelli. “By leveraging its proprietary technology to create a lower cost and more transparent flow of capital between borrowers and investors, Lending Club greatly improves the system’s efficiency and passes on the benefits to investors in the form of higher risk adjusted returns.  Investors are finding the value proposition offered by the Lending Club platform to be extremely compelling in today’s challenging interest rate environment.” 

Pattelli holds a Bachelors of Science in Electrical and Computer Engineering from the University of Notre Dame and an MBA from Columbia University, where he was most notably trained by Jim Rogers, Chairman of Rogers Holdings and founder of the Rogers International Commodity Index. Pattelli also holds the Chartered Financial Analyst designation.

Lending Club continues to experience unprecedented growth with over $30 million in new investment capital attracted in August to fund new loan originations that are growing by more than 150 percent year over year. The company recently surpassed $370 million in total loans originated since inception.

Focusing on prime and super-prime quality borrowers enables Lending Club’s platform to have generated consistent returns to investors, while offering consumers interest rates well below traditional alternatives for similar borrowers.

This article (Lending Club Names New Head of LC Advisors) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Rose shared on Google Plus that he became interested in peer-to-peer lending after Fred Wilson’s Union Square Ventures invested $25 million into Lending Club in August. He has since sold off a significant number of his stock investments and has begun investing in Lending Club notes with a Lending Club PRIME account. Rose shared that he is currently earning an 8% rate of return.

He discussed his new investment on a recent episode of Diggnation (starts at 5:00):

You can also read our Lending Club Review

This article (Kevin Rose Loves Lending Club) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Lending Club recently took some steps to improve its secondary market. The company made it so that investors cannot sell notes that have been charged off or are in default. Lending Club has also set a maximum markup of 70% and put a seven day expiration point on note listings. This move has significantly reduced the number of junk loans listed on the platform, however, there’s still not that great of a way to sort and filter through loans.

Our friend Michael over at NickelStreamroller has developed an alternative portal to the Lending Club secondary market that he refers to as “SMAP” or Secondary Market Alternative Portal. Michael says that his new web-application exists to help investors price their notes logically and to help buyers filter out loans that are over-priced or otherwise a bad deal.

In a recent blog post, he describes the new tool, “The SMAP (Secondary Market Alternate Portal) allows investors to see Lending Club notes from FolioFn in a new light. The Folio platform as-is, is not very useful. It’s slow, and does not have many search options. Anyone who has used it for more than a few minutes quickly sees it’s not a very useful platform to search for notes. It’s my hope this tool helps investors selling notes at a logical price sell quicker, and helps investors trying to buy loans filter out the cruft (read -10,000% YTM)! Since all of the existing loan data is already on the Nickel Steamroller platform if you would like additional search fields, such as loan purpose or state, feel free to contact me, as they can be added with relative ease.”

Michael noted that there are still some issues to workout with his tool. The import into the tool is currently a manual process. Additionally, there’s no way to link into FolioFN’s platform at this time.

This article (New Method to Find Loans on Lending Club Secondary Market) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s the commercial (requires QuickTime):

This article (Lending Club Produces First TV Commercial) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

In my most recent post about my Lending Club investment, I commented that I would provide an update when I had fully invested the additional $60,000 that I added to my Lending Club account. As of September 9^th, 2011, I have a non-invested account balance of $1.35. I did vary the totals invested each category a bit based on what notes were readily available to invest in during the 45 day window I have to invest my Lending Club funds.

I found that the three strategies that involve using a strict filter to find loans which are likely to perform well produced a relatively low amount of loans. In my “Lendstats D-G” strategy, my average note size is $115.96, primarily because there aren’t nearly as many D-G loans as there are A-C loans. The strategy that was easiest to be diversified in was the crowd-sourced strategy, which has an average note size of $66.35. My “Common Sense” strategy has a large number of notes, primarily because I had been making loans using the strategy during the last several months.

The other significant change in my Lending Club account during the last month was the number of late notes that I have.  The early notes that I had purchased using the “Common Sense” strategy are now 6-12 months old. I have a total of 13 loans that are late, 2 of which are in default. I am beginning to agree with LendStats that the loans in my “Common Sense” strategy portfolio will probably perform average at best. One would think that only investing in bowers that had no public records, have not had a history of late payments and have been employed for at least two years would be better borrowers over the course of a period of three years than some others, but that may not be the case. It looks like raw empirical data will be much more useful than common sense as I develop a long-term Lending Club investment strategy.

I don’t know that I’ll put any additional investments in Lending Club this month. I depleted my savings account balance down to about $10,000 after paying tuition for my graduate school classes and making my Lending Club investment. I’ll probably re-invest the interest and payments in my account, but won’t add any new money until at least the first of the year. I will however, be getting a nice $1,200 deposit bonus in my account sometime next month. I’ll certainly invest that money.

This article (The Great Lending Club Experiment: September 2011 Update) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.

Here’s the official press release

SAN FRANCISCO, CA, – Sept. 8, 2011 – Lending Club, (http://www.lendingclub.com), the leading platform for investing in and obtaining personal loans, today announced that Peter J. Thomson has become a cornerstone investor in the Conservative Consumer Credit Fund. LC Advisors, a wholly-owned subsidiary of Lending Club, serves as the General Partner of the Fund. The Fund invests in the two highest grades of 36-month consumer loans originated through the Lending Club platform.  In addition, Thomvest, Mr. Thomson’s venture fund, has taken an equity interest in Lending Club alongside Union Square Ventures.

“Our philosophy is to embrace and promote innovation,” said Mr. Thomson, chairman of Thomvest and director of Thomson Reuters Corporation. “We believe Lending Club is a remarkable financial innovation: it creates a more direct path between sources of capital and the consumers who need that capital at a given point in time, which helps lower interest rates for consumers and offer higher yield to investors. As we look to preserve and grow our capital with fixed-income investments, Lending Club’s investment platform fits our needs ideally.  Thomvest is also pleased to be able to participate in Lending Club’s future growth as an equity investor.”

“We are thrilled to welcome Peter Thomson and Thomvest as strategic partners,” said Lending Club CEO Renaud Laplanche. “We have gotten to know each other during the several months of their due diligence process and it became clear that we share the same views concerning the role of technology and innovation in improving marketplace efficiency and transparency. These shared values, combined with Mr. Thomson’s cornerstone investment on our platform, make Mr. Thomson and Thomvest our key strategic partners for the years to come.” 

Lending Club continues to experience unprecedented growth – over 100 percent year-over-year – including a record month in August with over $30 million in new investment capital added to the Lending Club platform. The company recently surpassed $350 million in total loans originated and is now originating over $23 million in prime consumer loans each month.

Focusing on prime and super-prime quality borrowers enables Lending Club’s platform to have generated over a 9.5 percent Net Annualized Return as of September 1, 2011, while offering consumers interest rates well below traditional alternatives for similar borrowers.

About Lending Club

Lending Club brings together investors and prime borrowers, utilizing technology to reduce the cost of traditional lending in order to provide borrowers with better rates and investors with better returns. Founded in 2006 and based in San Francisco, CA, Lending Club has been recognized for its results and innovation by the Harvard Business Review and Dow Jones, was recently named a World Economic Forum Technology Pioneer and featured in major publications, television and radio shows. More information is available at: http://www.lendingclub.com.

 Additional information about Lending Club is available in the prospectus for Lending Club’s notes, which can be obtained on Lending Club’s website at https://www.lendingclub.com/info/prospectus.action.

 About Peter Thomson

Peter J. Thomson is a Director of Thomson Reuters Corporation and Chairman of Thomvest.  Mr. Thomson’s enthusiasm for technology and its increasing impact on our lives led to an investment strategy over ten years ago of investing in early stage companies that were distinguished by the strength of their management teams, their degree of technical differentiation, and their ability to address large and growing markets.  Prior to founding Thomvest, Mr. Thomson worked on three continents for subsidiaries of the Woodbridge Company of Toronto, during which he gained a broad range of operational and strategic experience.  Mr. Thomson also currently serves as the Co-Chairman of the Woodbridge Company as well as a Director of Public Mobile Inc.

 About Thomvest

Thomvest is a venture capital firm committed to the success of our entrepreneur partners. We primarily focus on investments in areas where we have deep expertise and experience, including software, technology-enabled services, and hardware businesses. The capital we invest is our own, enabling us to be more creative, flexible and patient than most venture investors. It takes time to build great companies and we’re committed to supporting our entrepreneurs throughout their journey. That’s why more than two-thirds of the companies that we have funded in the last decade have either gone public, been acquired, or continue to grow as independent businesses. To learn more about Thomvest, please visit www.thomvest.com.

This article (Lending Club Receives Two More Investment Partners) was originally developed by and is property of Peer to Peer Lending News. Checkout P2P Lending News for the latest social lending, microfinance and financial innovation news.