Some of you may have already heard about or seen a change to your Lending Club account. Last week they added an on/off switch for adjusted net annualized return. Often times, I am met with skepticism when I tell people about my investment in Lending Club and it is soon followed by a question of my return on investment. I feel that I can now give them a fairly accurate number without having to do any math.
Here is my account with the adjusted return:
Adjusted Net Annualized Return view
The great thing about this is that you can view the assumptions they are using and also modify it yourself:
Lending Club Net Annualized Return Tool
I can definitely see using this to view your ‘worst case scenario’ return. One thing to remember is that notes take time to reach the different statuses. For instance, I currently only have 2 grace period notes as my notes are relatively new. Even my adjusted net annualized return is inflated and will drop eventually as notes reach grace period, late etc. For accounts with seasoned notes this feature is extremely valuable and I hope Lending Club continues to improve our investing experience. I believe making the interface as user friendly as possibly is going to be immensely important as investor demand continues to increase and peer/social lending goes mainstream.
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