All Financial Wisdom

Past-Due Notes Experience with LendingClub

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After investing with LendingClub.com for 6 years, I am having my first past-due note experience with the collections log. This all started when the borrower missed a payment.

So far, the borrower is past due 31-120 days. I am hoping his next payment will go through.

This is a "high" risk loan. The rate of the debt consolation loan was set for 25.78%, which is almost the highest available. I took this into account through my screening process of the notes. I only invest $25 per loan, which diversifies my offerings. I also look for candidates that have been employed for more than 4 years. This means that they are fairly stable and can hold a job. I like to think that someone who is responsible enough to hold a job for four or more years, that they will be responsible with the loan as well.

When you select the past-due note, you will find something similar to below for the payment history for a past-due note:
Lending Club Payment History

 

Further beneath that, there is the Collections log.  LendingClub has the obligation to try it's hardest to collect the full value of the note back for the investor.  I wants to return the money to the investor by getting the borrower back on track.  To do this, they try to contact the borrower and get more information about why they haven't paid or why the payment did not go through.  LendingClub provides a log of their efforts with generic entries in the Collections log as shown below:

Lending Club Collections Log

In the LendingClub Collections Log, they describes if a message was left, if the borrower was contacted, or other events.   As a lender, I use this screen to determine the likelihood of getting my money back.

 

This is my first notes that has been past-due.  I am not too worried about not getting my money back because first, it is just a $25 note, and my other notes are current.  I am still earning interest on that past-due note, so that if the borrow starts paying, I will be receiving a better return than originally planned.

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