My Lending Club Experiment

If you’ve spent some time in the Personal Finance blogging world, you’ve probably heard of Lending Club before. If not, do yourself a favor and click the link to get yourself familiar with it. (I’m not an affiliate or anything and don’t make any money if you do.)

Basically, it’s a peer-to-peer lending platform. You can invest in people’s debt whether it’s to pay off a credit card, do some home improvement, start a business, or some other kind of common debt.

You do this by investing in “notes” of increments of $25. Notes are either 36 months or 60 months. Depending on various factors, each note has a certain interest rate which you can expect to have as your rate of return.

So you get a payment each month, (some principal, some interest) until the note is paid off. Some people will pay off the notes early and some unfortunately will get defaulted on and you won’t see any money.

If you’re familiar with how bonds work, these are very similar.

I’ve been investing through Lending Club since 2014. I used to invest in the stock market before I came across the Personal Finance blogging world and I used Lending Club as a way to hedge some risk.

Plus there’s something fun about seeing how much money you “make” through payments throughout the month.

At its peak, I had about $800 invested in Lending Club notes. But life happened, (like when I was supposed to do that awesome internship,) and I took a significant amount of money out.

I’m down to just under $400 now. I’m not going to make a significant amount of money investing with that but I’m okay with that.

Right now, I “make” just over $20 a month with the payments I receive on my notes. These payments include principal re-payments and interest.

In total, I’ve invested in 35 notes over the years. Of these, 25 are issued and current which means I’m getting payments each month. 9 of them have been repaid in full so I’ve received all of my principal back plus some interest which I’m okay with. Unfortunately, one has been charged off and I’ll never see the $14.94 in outstanding principal. It was a high interest rate note, so I’m not surprised.

My goal with Lending Club is to be able to invest in a new note each month so I need to reach a level where I get at least $25 in payments each month. My expected payments are $20.37 each month so I’m kinda close.

Right now, that’ll get me 9 new notes a year just by re-investing the payments that I receive.

That’s not bad at all!

Yeah, $20 in the grand scheme of things isn’t much. But $20 in “passive income”, for only having about $370 in outstanding principal with an adjusted net annualized return of 11.47%, is pretty sweet to me.

If you want to find out more about Lending Club, Mr. Money Mustache has his own experiment going on.

* * *

Going forward, I’ll have a page dedicated to updates with my Lending Club experiment as well as my other side hustles.


  1. I don’t know if you’re read the story in Bloomberg on LendingClub’s shaddy loans, I’d recommend it. I have been tempted by the LendingClub experiment but for some reason, even if I love the idea, it still feels like making such high returns on money so easily is ‘too good to be true’.
    Looking forward to read more about your experiment, I may be on the wrong side of the fence now but looking forward to learning more about it.


    • I read it this morning. It’s pretty crazy! I might lay low on reinvesting what I “make” back for a bit until they get things straightened out. I figure that it’ll probably mostly affect it’s stock price and who invests in them that way but my pre-existing notes should be pretty stable. I don’t see someone not continuing to pay their loans back because of the recent developments…if they’re legit in the first place. I don’t have too much money invested with them so I’d probably think differently if I had more with them. We’ll have to wait and see how things play out but I plan on mostly staying put for now.


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