Lending Loop Update
I’ve been investing with Lending Loop for over 2 years now. My first year in 2017 was better than expected, ending with a 10% return net of expenses. I was only expecting an 8% return. In today’s post I’ll dive into my 2018 performance with Lending Loop and also explain how the site has changed over the last year.
Liquid’s 2018 Portfolio Performance (11% return)
My 2018 average loan interest rate after fees was 12.7%. A loan write-off shaved away 0.7%. And a bunch of delayed payments costed me another 1%. Which means my actual net return came out to be 11%, or $3,369. Score! 😀 I started 2018 with $30,400 in my account, and the end of year balance grew to $33,700.
Here is my 2018 earnings statement.
- Interest earned $3,968
- Servicing fees -$421
- Bonuses $25
- Total earnings $3,572
- Principal defaulted $204
- Principal recovered -$1
- Total charged-off $203
Unfortunately I did have one loan write-off in 2018. But it was a relatively small loss of $203. The borrower, a street sweeping business, owed significantly more taxes to the CRA than the value of its assets. The CRA would naturally have priority over other creditors in any bankruptcy or insolvency proceedings. This was the first loan write off in my portfolio, but it likely won’t be the last.
Portfolio at a Glance
Here are some quick stats about my Lending Loop portfolio.
- I have made 87 loans in total over 25 months.
- 18 of those loans have been paid off in full. Hurray!
- 1 has defaulted, and I lost 81% or ($203) of my principal on this loan.
- 68 loans remain ongoing for now. 60 of these have no major problems, but 8 are either delinquent or in default.
As of this week in March 2019, I’ve made a lifetime earnings of $6,300 from Lending Loop. 🙂
As with dividend or real estate investing, having patience is a key element to the fixed income game. Due to compound interest, my total lifetime earnings should hit $10,000 by this time next year, assuming portfolio performance remains consistent. 🙂
In terms of what types of loan I hold, they’re mainly B and C+ grades, which has an expected yield range of 10% to 13% after fees. This mixture hasn’t changed much for me over time. Most of the loans I participate in have a 3 to 4 year term.