Lending Club Recovered Funds from Defaulted Loans

While updating our investment portfolio last month, I discovered that Lending Club had actually recovered some funds from previously defaulted loans. We’re not talking about a huge amount here — around $18 minus ca. $5 in collection fees — but it was still a welcome occurrence.

The total amount recovered was mostly from a single loan, though I also picked up a few cents here and there from a dozen or so other loans. Clearly, they were only able to get back a small portion of the missing money in these cases, but it’s better than nothing.

As things currently stand, I’m trucking along with a net annualized return of a bit over 7.30%. What about you?

12 Responses to “Lending Club Recovered Funds from Defaulted Loans”

  1. Anonymous

    I have 101 notes invested. 27 of them defaulted. My return rate is 3.01%

    I can’t believe that many people just borrow money and just don’t pay it back. The collections process seems useless. If someone is borrowing for home improvement, and doesn’t pay, liens should be placed on the property. If someone is buying business equipment, it should be repossessed. It seems all there is a few phone calls and then they can just keep the money.

  2. Anonymous

    I’ve been investing 3 years…
    In Funding: 32
    Issued & Current: 505
    Fully Paid: 33
    Late 16 – 30 Days: 0
    Late 31 – 120 Days: 0
    Default: 0
    Charged Off: 0

    Return is 14.02%

    I do have a whole selection method but most likely watching method. I just download my issued notes to a spreadsheet and here we go – the winner is: ME!! It takes me just 2 -3 minutes a day to review the notes and get rid of potential troubles.

  3. Anonymous

    I’ve been investing 3 years…
    In Funding 1
    Issued & Current 148
    Fully Paid 61
    Late 16 – 30 Days 0
    Late 31 – 120 Days 7
    Default 0
    Charged Off 16

    Return is 8.21%

    I don’t have a special way to select loans.. I don’t have the time to spend much time on reviewing them all etc.. I just buy them, blind sometimes.

    I do plan on putting $250 every month this year. I think the payments on these will get better, based on the trend for bankruptcies.

  4. Anonymous

    I’ve been investing with lending club for 1.5 years now and I’m averaging around a 14% return. Haven’t had any defaults luckily.

    I only have $500 invested now, but I’m definitely considering investing more, around $5k maybe? Don’t see many drawbacks, do you?

  5. Anonymous

    Portfolio dates back to 2/2010. NAR (their calculation) 8.19%

    In Funding 1
    Issued & Current 253
    Fully Paid 46
    Late 16 – 30 Days 2
    Late 31 – 120 Days 6
    Default 0
    Charged Off 9

  6. Anonymous

    I am not in a position to invest right now, but as soon as I am, I want to try Lending Club. I have seen so many bloggers write about it and they are making terrific returns. I don’t have much loss tolerance though, so I would probably invest no more than $5k.

  7. Anonymous

    Personal account 31 months old now. Adding funds monthly, investing/selling 5 days a week religiously, but quickly.

    Total loans: over 1450+ purchased.
    Total Sold: 540 (400 at 2% net premium, 140 at 2-3% net loss)
    Currently: 900+ notes (77% 3 yr. notes, 58% B/C grade)
    Late Notes: 0
    Default/Charged Off: 6
    NAR: 12.6%
    IRR: 15% (including new acct/recurring bonuses)

  8. Anonymous

    I’m at about 13% return rate, however, I’ve been investing for less than 10 months so my results are not accurate.

  9. Anonymous

    After 8 months….

    Lending Club:

    – 242 notes current ($25/ea)
    – 18.53% weighted average rate
    – 7 fully paid
    – 1 16 – 30 days late
    – 0 default
    – 0 charged off


    – 230 notes current ($25/ea)
    – 25.06% average note yield
    – 1 past due (1 – 30 days)
    – 1 past due (31+ days)
    – 0 charged-off
    – 16 notes paid in full

    I get better yeilds with Prosper but the investment process is slow and at times frustrating, as many of the notes I invest in don’t originate. Lending Club process seems more efficient, but lower yeilds (than Prosper) for the same investment risk. Overall I think Prosper is worth the frustraton because of the higher yeilds, but I’m weighted heavier now in Lending Club with my recent opening of a ROTH IRA (none of that is invested in notes yet).

    I think it takes a couple of years to have meaningful data so my higher yeilds may need more scrutiny before any conclusions can be made (defaults are likely to come from what I’ve read from those who are more experienced). But so far I’m pretty impressed with the whole process.

  10. Anonymous

    I have 443 notes outstanding, 35 paid off with Lending Club. About $10,000 invested at 9.21% annualized return. So far, 6 defaults-all charged off. My 6 defaults were 3 Cs, 2Bs and 1 E rated. I have 5 lates- one of those is in a payment plan- paying less per month than planned but paying. My lates are 2 Cs, 2 Bs and 1 D rated. I think most of them will become defaults.

    Most of my charged off loans only made 2-3 payments and then went into bankruptcy. I could not see it coming based on the original loan description- I don’t loan to people with recent delinquencies or who have over 20% debt to income ratio. I think some of them just decided to get some extra cash before they declared bankruptcy and had no intention to pay the loan back.

    To counter the risk of these defaults you must have a large enough loan pool with no more than the $25 minimum invested in each loan. So my defaults have already dropped my annualized return rate down a few percent, but I am still doing OK.

  11. Anonymous

    I’ve been investing in lending club for 6 months now. I can only invest using the note trading platform also, and I have a very strict criteria for selecting notes. Some days that I am looking to buy, I cannot find any suitable notes to buy.

    I have 63 notes and have averaged 22.02% return. I haven’t had any defaults, although I have had one note fall late and then catch up, and I have had one note that was paid off early. I only invest in E-F grade notes. I am expecting that I will have some defaults and that my return will drop to the low teens eventually, although it has not happened yet.

  12. Anonymous

    I’m tracking at a -1.91 currently. I have a total of 45 notes and 4 of those charged off. The first charge off was a full recovery and the next 3 all defaulted at about the same time and charged off Feb/March. I was very surprised that 2 of the 3 were A papers. Since I am in AZ my only option is the secondary platform. It’s been my experience that since I’m buying notes several payments into term 25% of my purchases payoff early, which means the interest I’m earning on my good loans is not making up for the defaults.

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