Bought My First Lending Club Loan Through The Note Trading Platform At A Huge Discount

I love Lending Club. If you are a reader or follower of the blog, you probably know this. I usually talk about Lending Club at least once a month. I am just really happy with the services and incredible interest rate that I earn on my investments with them. You can read my review of Peer-to-Peer Lending, or you can also see how I have been earning over 15% return on my money annually with the loans I am making.

Today, I wanted to tell you how I finally got around to investing in “bad” loans or loans in default with Lending Club. You are probably wondering why in the world someone would invest in a loan where the borrower has not made all of their payments. It is because of the incredible rate of return. Many of these loans can be bought through Lending Club’s Note Trading Platform for pennies on the dollar. The Note Trading Platform is an electronic marketplace where individuals and organizations can buy and sell Notes corresponding to consumer loans issued through the Lending Club website. Sellers list Notes that they would like to sell and enter an asking price. Buyers browse Notes that are available for sale, review payment history and the evolution of the borrower’s credit score, and buy Notes at the asking price.

I recently bought a loan directly from another lender who had invested $25 dollars in May 2009. After seven months of paying on time, the borrower started having trouble making loan payments around Christmas. I ended up buying the remaining amount of the loan, approximately $15, for $5 in the hopes that eventually the lender will make good on his or her commitment. My hunch paid off, and yesterday, I received my first payment, interest, and late fee from the loan