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Lending Club Note Trading Platform – FOLIOfn

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With an investment of only $3,400… my peer lending notes at Lending Club are currently earning returns of 8.8% which, at the time of writing, equates to $25 of income every month.

One of the most important ways to keep your net annualized return (NAR) as high as possible it so watch your notes (loans) carefully and sell them on the note trading platform when they reach a level of risk you’re no longer comfortable with.  Don’t worry… using the note trading platform is much simpler than it sounds and today I’ll show you how I do it.

Note trading platform basics

The note trading platform is nothing more than an electronic marketplace for the buying and selling of notes that represent consumer loans issued through Lending Club.

Sellers list notes in hopes of selling for a price of their choosing. Buyers browse available notes, review borrower payment history and credit score, and buy the notes of their choosing at the asking price. Buy orders received before 11am PST on a business day will settle same day, otherwise the transactions will settle the next business day.

Accrued interest

Buyers receive interest payments whether they buy the note on the first day, last day, or any day in between the time the previous payment was made, so be sure to factor in accrued interest to your valuation of a perspective note. You can find the accrued interest since last payment on the Browse Notes page.

Fees

Fees for using the FOLIOfn platform equal 1% of the purchase price, charged to the seller of the note. There is no fee for buyers trades.

Tips for selling notes on the trading platform

You will have to determine your own criteria for trading existing notes, and everyone will do things a bit differently according to their own risk tolerance.

Here are a few strategies I use including a screencast of me selling a note and speaking more on the topic.

  1. I sell late notes. Any notes that have become late or are even in the grace period are watched very carefully and usually sold right away.  I do this because I am not comfortable lending money to people who do not think it important to pay their debts on time.
  2. I watch credit scores. Watching credit score drops can help you head off a late payment before it reaches late status.  Chances are, if a borrowers credit score drops significantly over a short period of time, they may be in financial trouble.  I will sometimes sell the note before it has a chance to go late.
  3. I price notes accordingly. This is a bit of a gray area and will take a bit of practice, but do not charge more for a troubled note than you would be willing to pay, and at the same time be sure you’re not giving it away at a price that is too low.  As you sell more notes you’ll get a better feel for pricing them correctly.

Enjoy this screencast of me discussing note trading and selling a note on the secondary market, and invest with Lending Club if interested.

Invest with Lending Club

If these returns interest you and you would like to invest in peer lending, you can sign up to invest with Lending Club and get started.

If you have any questions or comments don’t hesitate to leave them below.

Earn High Returns with Peer Lending

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Back in 2009 I was the guy borrowing from peer lending investors.  Not anymore baby!

Investing in peer loans is paying me about $25/month… and that number grows with every loan I invest in.

Invest in peer lending

Peer lending is just another term for peer to peer lending, social lending, p2p lending, etc.

Now-a-days I’m the guy getting paid to loan money… and it feels really, really good.

One way I invest – and earn high returns – is by using peer lending platforms to loan money to people who are in the same position I used to be.  I enjoy doing this for two main reasons:

  1. I can help them get out of debt.
  2. I can earn high returns on my money.

I usually stay away from loans (a.k.a. notes) being used to finance things, like weddings or automobiles, and stick primarily to debt consolidation loans and sometimes business loans.

How much you earn will depend mostly on the notes you choose, how you choose them, and your use of the secondary market.

How much I earn with peer lending

I currently have nearly $4,000 invested in 90 notes.  I have had one note default and am earning a NAR (net annualized return) of 8.55%.

The average peer lending investor earns approximately 10% on their investment… so I’m a little behind the curve, but I’m learning – and will take a 8.5% return any day.

To date I have earned $212 in total interest… and I’m pulling in about $25 in interest a month, and this number grows monthly as I invest in more notes.

Tips for earning higher returns

Here are a few tips for those who want to start investing with peer lending:

  1. Before you choose loans be sure to pick solid criteria then save the criteria search.  I will elaborate more on this in a future post dedicated wholly to the subject, but for now just understand that you can filter the loans based on criteria like “no defaults in the past 3 years” and “credit scores of 700+”, etc.
  2. Keep an eye on the notes you invest in and resell troubled notes on the secondary market.  Again, I will drill down on specifics later, but just be aware that selling troubled notes on the secondary market is a crucial part of earning higher returns.  Don’t be intimidated by this either because it’s easy peasy, all you basically need to do is pick the loans you want to resell, price them at a discount and click “submit”.
  3. Diversify your notes.  By this I mean to invest in notes of different grades to balance risk and returns.  Peer lending platforms grade the loans based on borrower credit history and allow you to drill into the details and pick loans paying higher returns while still offering less risk – they’re there, you just have to look.

Those are the basics.  Feel free to ask questions in the comments section below.

How you can get started with peer lending

If you like the returns peer lending is delivering and want to get started, there are two companies I recommend in full confidence… Lending Club and Prosper.

Personally, I have more experience investing with Lending Club, but know both companies are sound and proven, so choose Prosper if their platform suits your needs better.

Debt Help – The Lending Club DebtBuster Challenge

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Don’t you just love the Christmas holiday?  Trees, lights, carols, cookies, cards, sacrificial giving, decorations, cookies, time off work, and time spent with family and friends… eating cookies.

Did I mention cookies? 😉

Considering how this time of year conjures up visions of sugar plums dancing through our heads… how did buying things people do not need with money we don’t have ever become synonymous with this season of charity, joy, and sacrifice?

Though this is a question more and more of us are starting to ask ourselves, I suppose we can leave the how and why of it up for debate another day and instead focus on debt solutions, debt help, and debt relief.  After all… if we’re honest with ourselves, dealing with debt head on is exactly what we need to do.  Debt is never going to just go away, we have to make it go away.  Credit card debt is never going to pay it self off, we have to make ourselves pay it off.  We can never start winning with money until we stand up, take responsibility for our debt, and start taking steps in the direction of responsible debt reduction.

This spirit of passionate debt reduction is the exact focus of the latest move from Lending Club.  They are currently sponsoring a cool promotion to help get you on the path of responsible debt reduction and throwing in some cool freebies along with it.

Introducing the Lending Club DebtBuster Challenge!

What is it?

  • From now until January 15th Lending Club is encouraging us to be responsible and commit to taking the DebtBuster Challenge to consolidate debt, manage debt, reduce debt, and eliminate debt once and for all.
  • This is a program they have created to raise debt awareness and encourage personal fiscal responsibility during this holiday season… and far into the future.
  • Go to the Lending Club website to check rates based on credit score and credit history and secure a debt reduction loan with Lending Club.
  • Sign up today and they will send you a nifty Lending Club t-shirt or back pack.

What is Lending Club?

  • Lending Club is a peer to peer lender who facilitates the borrowing and lending of money between individuals, thus bypassing traditional banks and all the headaches that come along with it.

Why Lending Club?

  • I keep saying “we” and “us” because you are not alone… I’m right here with you on this.  I secured a debt consolidation reduction loan through Lending Club back in August of this year and wrote all about it in my Lending Club Review.
  • Lending Club offers better rates and less hassle than borrowing from traditional banks.
  • And because I know all to well that debt reduction and elimination is exactly what many of us Americans need to be focusing on.

Join Lending Club for Debt Help

I am proud to be part of the Lending Club DebtBuster Challenge and am not alone in offering this wonderful promotion to you.

I am partnering with Lending Club themselves and the 4 other top DebtBuster bloggers to offer advice and encouragement for those committed to debt reduction during this holiday season.

As always, keep an eye on our blogs over the next few weeks for articles to help encourage your passionate move toward debt reduction and debt elimination.  A time or two each week we will be specifically addressing those who committed to taking the Lending Club Debtbuster Challenge.

Sign up and take the Lending Club DebtBuster Challenge

Do not put off your debt reduction any longer!  Now is the time and this is the opportunity.  Join me and thousands of other responsible and committed Americans as we get Lending Club on our side, commit to the DebtBuster Challenge, and make the move toward freedom from debt using the power of peer to peer lending.

Helpful DebtBuster Links

  • Official Lending Club DebtBuster Press Release

Other participating DebtBuster Bloggers