Lending Club Adds Yield to Maturity Data to Notes

I logged in my Lending Club account today to buy a few more note, then I noticed something that’s apparently new in the Note Trading Platform.

Lending Club Yield to Maturity

It’s a new column of data called (click the above screenshot to enlarge). If you are not familiar with Yield to Maturity (YTM), then you can check out the definition on Wikipedia. Basically, it’s the rate of return I will actually get if I hold the note to maturity (usually 36 months if I buy a note with the maximum number payments remaining).

Before, the only rate information on Lending Club is the interest rate of the loan, which is determined mainly based on the borrower’s credit. However, if you can only invest in Lending Club’s secondary market, like I do, then interest rate alone won’t tell you how much you will make from your investment. Other factors, such as the purchase price of a note, on-time payment of the note’s remaining payments, and reinvestment of principles all play a role in determining your rate of return should you decide to hold the note to maturity. Among these mentioned above, a note’s asking price, with a markup or discount, is the biggest element. That’s why I only buy notes at par value or with a discount :)

If you are interested in P2P lending through Lending Club Note Trading Platform (for those who are not qualified for direct lending), be sure to check out my Lending Club Note Trading Platform review. You can even get a $25 bonus now to get started.

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