Comments on: Lending Club IRA: Why it is good for your retirement

By: Lending Club lender

Lending Club lender — Thu, 28 Jan 2010 22:57:19 +0000

Not sure if anybody is still following this thread, but Lending Club has reduced the balance requirement for a no fee IRA to 10k.

By: Lending Club lender

Lending Club lender — Sun, 20 Dec 2009 15:50:45 +0000

I don’t think Prosper offers anything in the way of an IRA product, but even if they did, I’d be very leery given their default rates, now approaching 45% of all loans! See Fred93’s blog for the gory details.

By: Lending Club lender

Lending Club lender — Wed, 25 Nov 2009 02:20:25 +0000

Lending Club has waived all IRA fees for any account that maintains a balance of 15k or more in 2010. Looks like they’re trying to bring more capital in. Traditional, ROTH, and SIMPLE IRA’s are on their menu, as well as solo 401(k)’s. My SIMPLE has done well this past year, with only 3 notes late out of over 100 notes total and no defaults yet. Return is hovering around 11%.

By: A Personal loans guy

A Personal loans guy — Wed, 18 Nov 2009 21:50:50 +0000

I have always really liked the idea of social lending and the retirement idea is interesting, does anyone know if prosper does the same thing?

By: LendingClubber

LendingClubber — Sat, 14 Nov 2009 16:17:14 +0000

I just signed up for Lending Club’s “No Fee” IRA through EntrustCama. While the minimum investment for the no fee status is $15k, that was just a bit more than I had planned to invest. Saving $250 a year is significant and worth the extra investment to me.

By: Lending Club lender

Lending Club lender — Tue, 09 Jun 2009 00:51:42 +0000

Quick follow up on the subject of ENTRUST’s fees. They charge $25 to wire funds over to LC, and $5 to snail mail a check. These fees are covered through the end of this year by LC, but will be the responsibility of lenders as of January 1, 2010. There’s also a two day delay between the time you make the request and the time the funds get moved out. That delay is in addition to the time your check takes to clear, of course.

By: Deepak

Deepak — Fri, 24 Apr 2009 12:45:29 +0000

After that, assuming about a 10% return, the annual fee should be in the .5% area the third year, and will go down a bit each year as a percentage of the total value of the account, assuming the account increases in value.

By: Deepak

Deepak — Fri, 24 Apr 2009 12:43:19 +0000

Nice writing. You are on my RSS reader now so I can read more from you down the road.
Deepak

By: Lending Club lender

Lending Club lender — Thu, 09 Apr 2009 04:09:33 +0000

Quick follow up. I may have miscalculated the fees involved in my above post. I will owe ENTRUST $250 next January. That will cover this year and next year’s fees. So if my SIMPLE IRA is fully invested both years ($13,500 x 2 = $27,000), then the fee works out to .92% for two years, or .46% each year. After that, assuming about a 10% return, the annual fee should be in the .5% area the third year, and will go down a bit each year as a percentage of the total value of the account, assuming the account increases in value. That puts them in line with many ETF’s, though not as low as Vanguard’s.

I did confirm the fact that the application fee is waived if you apply before April 15th.

By: Personal Loan Portfolio

Personal Loan Portfolio — Thu, 02 Apr 2009 00:54:26 +0000

The fees are definitely going to add up at that rate.

Lending Club had the benefit from Prosper’s experience, so I can assure you that they will never have a forum. See number eight on this list. The forums there became quite inconvenient to Prosper and when they purged the forums of both members and posts, they made an army of angry lenders.

By: Lending Club lender

Lending Club lender — Thu, 02 Apr 2009 00:27:24 +0000

Entrust’s fees are definately something I took into account before investing. For my SIMPLE IRA, it works out to 1.85%, plus Lending Club’s 1%. Though significantly higher than index funds like Vanguard ETF’s, they didn’t seem outrageous when compared to some other mutual fund families or ETF’s. Entrust will waive it’s fee for this year if you invest by April 15th. The fee that I don’t really understand is Entrust’s $50 application fee. You fill it out and mail it in to them. Inputting your data into their system shouldn’t take a lot of time, They then wire your funds to Lending Club. In an era of $100 fees for college applications, I guess they see this as another revenue source. I believe this fee will also be waived if you apply before April 15th. No matter what, if a significant percentage (greater than 3-4%) of loans go into default mode, the question of fees becomes a moot point as you write off the balance of those loans. It would be nice if LC provided some additional stats regarding the number of loans that were able to be recovered through collection efforts. It would also be nice to have a forum on the site.

By: Personal Loan Portfolio

Personal Loan Portfolio — Wed, 01 Apr 2009 23:10:34 +0000

J, Thank you for commenting. I had not seen your response in the comment queue before I responded to the first commenter who went through without approval since he had commented here a few times before.

I intentionally posted it before midnight to show it was not an April Fool’s joke. I have had a loan portfolio with Lending Club for a long time now and it is actually doing quite well — WAY BETTER than my prosper loans.

I’m sorry to hear that yours loans have gone south. Would you be willing to send me a screen shot of your dashboard I’d like to see what it looks like since mine looks rather good. Contact me through the contact form, and I’ll respond back so you can attach. Let me know if you want me to post it for others to see or not.

I’ll re-do all the math on my above analysis considering the fees, but overall the reduced volatility should make a large difference after time.