The Lending Club account was funded this morning and this afternoon I placed my first order. There is quite a bit of money in the account and I want to create a laddered portfolio. So my first order was just a fraction of the total portfolio.
One alternative I had considered was purchasing on the secondary market. Lending Club allows purchases and sales of individual loans through folioFn. It’s an interesting marketplace where people have placed portions of loans for sale and put their own price on the item. It reminds me of the homes for sale in my neighborhood where some prices are high and some are priced for sale right now. The site shows the Yield to Maturity which helps show where the price is set.
I decided not to follow that idea because the amounts of the loans are set by the original purchase and the remaining value. Given the value I want to have mature each month, it sure would be difficult to figure out what to buy and what priority to put on each. I imagine I could do it, but the amount of time it would take seems daunting.
That makes an interesting point that any purchase I make I should plan to hold on to the loan until maturity. I have structured the portfolio with that in mind. Three years is a long time and plenty to change my mind.
The first order I placed was for a person in Maryland looking to buy a car. I will have a very small portion of the total loan once it is fully funded. Updates to come.