Just a data point – started on Lending Club in October 2013. Now up to 258 notes, adjusted return rate is down to 13.73% from twenties a year ago, but that was expected. I have an aggressive approach, only invest in E-F-G-grade minus some urban legends like never loan money to people in Nevada : )

From those notes, 13 are in default/charge off, 42 have been fully paid – assuming only pre-payment at this point (2 years), and I wonder if it hurts the APY? Since those people paid early, do I get the interest for 3 or 5 years? Guess not. But again, the biggest problem so far is the lack of liquidity – if I had a need for that money, it would not be easy to get it back before the 3/5 year term.

2 years into it, seems like a good way to make 10%+ on your investment. No idea how this will hold up in case of a downturn, people getting fired and defaulting on their loans. With SPX on track to return near a big fat 0% for the entire year 2015, LC looks like a good place to park some cash. However, a sales/support guy from LC called me once out of the blue, and started throwing some unexpected trivia and advice at me like not investing more than 10% of your portfolio in them. Yes, that was their sales person, and right at the time when I was considering moving more money into that account.

More updates will follow on this page.