Lending Loop Review

Lending Loop 2017 Update – Auto-Lend Review

I have a confession to make: I’ve forgotten about my Lending Loop account.  For the last six months, I’ve hardly logged into my account.  What can I say? Life took over.

I enjoy finance and investing…but I also have a very young family, wear many hats and have too many things to do…like everyone else in the world.

After getting ready for work, making lunches, getting dinner ready,  running around to activities and overseeing my real estate portfolio, I forget about logging into Lending Loop.

And when I do get the few minutes of time, I still find it time-consuming filtering through financials, researching companies, scouring through questions and answers…especially when my loans are only $25.

So I stopped.

And as the interest payments and loan payoffs rolled, I didn’t reinvest the income so my account was doing absolutely nothing!

Fortunately, Lending Loop evolved and progressed fast because now they have an automated lending feature called Auto-Lend.  It has made my investing through Lending Loop so much easier.

I really like Auto-Lend because not only have I diversified with more loans BUT I’ve also averaged an 8.8% annual net return since activating it.

And in this blog post, I’m going to share my strategy with Auto-Lend, how it has performed and how my investments have done over the past two years.

Automated Lending

Lending Loop Review

Lending Loop recently raised $2M in funding to help launch Auto-Lend.  Since Auto-Lend started, I’ve been a super fan because the feature is so easy to use.

With Auto-Lend, I’ve continued with small loans, typically $25.  And I only loan out to grades B and higher.  Although the lower grade loans have higher interest rates, they are also riskier so I use Auto-Lend to avoid them.

Over the past two months, even with these conservative filters, I’ve made 12 loans with Auto-Lend!

Currently, I’m investing $25 per loan and it is easy to reinvest the interest income. I have received $122 in interest payments back (after fees) and it is slowly building up in my account.

Lending Loop Performance

I hope Lending Loop adds more features to Auto-Lend in the future.  I’d love to see more filters like: debt to income ratio, company age greater than X, etc. so that Auto-Lend is more personalized.

2-Year Performance

I made 34 small loans over the past two years resulting in $1,667.41 in total investments.  And I’ve netted average returns of 8.8%.

In terms of re-payment, loan amortizations range from six months to five years and I’m expecting monthly payments (principal and interest), similar to a mortgage.

Lending Loop Portfolio

I’m happy to say that 3 loans have been repaid!

Lending Loop Repaid

 

Chargeoffs

In total, 1 out of my 34 loans have defaulted and is considered delinquent. Overall, Lending Loop has only had 3 loans default since inception.  The default is very very low, however, lower than the industry standard. I think it’s reasonable to expect more defaults will occur with time.  It is very important to continue to diversify so that defaults are mitigated.

Here is the breakdown of my loans to date:

  • 11 loans above A
  • 21 loans above B
  • 2 loans above C

Initially, I made a few larger loans thinking there were a lot more B to A loans, but it turns out that Lending Loop’s portfolio has, to date, held a lot more loans graded C or lower. This lead to me not making many loans in the first year.  I’ve changed my strategy in the past year with more frequent, smaller loans, which has resulted in me slowly diversifying my account. I encourage everyone to continue diversifying their accounts by lending small amounts to a larger number of businesses.

Helping Businesses through Social Lending

I find it very inspiring to be able to invest and help businesses in Canada. I love knowing that my money is helping businesses in Canada and making a positive impact.

It’s very rewarding to read about success stories on Lending Loop. One of my earliest investments was for a business called ChocoSol, who was featured on Lending Loop. The owner had a dream about making chocolate, making a living specializing in artisanal chocolate using organic, forest garden, shade-grown cacao and expanding his company – I find it amazing how peer-to-peer lending is supporting his dream.  My two loans to ChocoSol were fully repaid as of March 2016.

There are many more incredible stories of real people with real businesses who have been successful in receiving loans through Lending Loop. These businesses would have otherwise hit a wall with banks or else been bogged down with months of red tape.

To date, Lending Loop has funded over $10M in loans to businesses.

Lending Loop Success

Thanks to Lending Loop for supporting this blog.  I’ve been waiting patiently for years for this type of lending platform to come to Canada.  I think this is a great way to invest. If you want to get started with an account of your own, be sure to hit up my affiliate link to get $25!  It is a win-win situation.  You get $25 for opening an account with a minimum investment of $1500 and you also help me out by supporting this blog.


Related Posts:

Lending Loop Performance – One Year Later

How I am Investing In Lending Loop – Canada’s First Peer to Peer Lending Marketplace

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