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Can You Really Trust Lending Club Returns?

Wednesday, May 1, 2013 - 7:14 PM
Many reviews have been done showing how easy it is to earn high returns at Lending Club, the peer-to-peer lender. However, it does depend heavily on borrowers who don’t default. Allan Roth of CBS MoneyWatch has a useful review of Lending Club and how defaults can wreck your returns. One excerpt from the article:
If I excluded delinquent loans, I calculated my annualized return to be about 1.60 percent. Less than a month later, two of those notes went into default and suddenly my 11.08 percent annualized return dropped like a rock.

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Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Wednesday, May 1, 2013 - 8:20 PM
There is no free lunch anywhere, one pays for what one can get.  I personally would not touch Lending Club at all.
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427