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I decided to take advantage of LendingClub’s 5% bonus offer, and started a transfer on Monday for $5,000 into my LendingClub account. The money arrived today, one day ahead of schedule, so that was nice. Also, I was curious what happened if some of my loans didn’t get fully funded or approved, and wanted to make sure that I still qualified for the bonus when this happens. I sent them an email in the morning and got a response about 2 hours later – so that made me feel good about them too.

LendingClub has this ‘portfolio’ concept, which is basically just a collection of loans that you bid on as a group. When you create a portfolio, you specify a dollar amount($500 minimum), and the level of risk that you want on a scale of 1 to 5. Their system then searches through loans that are currently in funding, and suggests an amount to bid on each one – totaling the value you specified.

With my $5,000, I created two portfolios – A ‘low risk’ one for $2500 that was a 1 on their risk-o-meter with a weighted average rate of 9.71%. My second ‘Medium Risk’ portfolio was also for $2500 and ended up as a 2 on the risk-o-meter with an average rate of 12.56%. That gives me bids totaling $5,000, which should qualify for a 5% cash back bonus.

The low risk portfolio included 50 loans for $50 each and was only for A, B, and C grade loans. The estimated monthly payment on each $50 loan is around $1.60 give or take a few cents, for a total monthly payment of $80.12.   The medium risk portfolio was for 100 loans at $25 each. It has loans of each grade, but most of them are in the B, C, and D grades. Each of those loans should pay me around $0.83 per month for a total of $83.21.  So, in a perfect world, I would receive $163.33 per month for the next 36 months, plus the 5% bonus of $250 for payments totaling $6,129.88.

Now I guess I just wait and see how many of these loans get funded and approved. From what I understand about the bonus, it is based on bids you place, regardless of whether or not the loan is ultimately issued. In that case, it actually turns out better for me if a large amount of the loans aren’t approved.

In fact, with that in mind, a person could have put some money into his account when the bonus was introduced, then bid on as many loans as possible where it was obvious that the loan wouldn’t get fully funded. If they played it right, they would not have to actually loan any money, but could still have gotten 5% of on the total of their bids. Crazy idea – wish I would have thought of it sooner