Lending Club Secondary Market

For those people that live in a state where they are not eligible for Lending Club or for residents of states that are but want to make more money, a great way is the Lending Club Secondary Market. This has not always been an option since Lending Club opened their doors in 2006 but since it was implemented it has really helped a lot of people.

Back in 2006 when Lending Club was first starting out they had no sort of trading platform whatsoever. Then Lending Club went into their quiet period in April 2008 and came back fully revamped in October 2008 after having completed their SEC registration.  At this point the notes were considered to be securities very similarly to the way that a stock is considered to be a security, allowing them to be traded on a secondary market.

Lending Club chose FOLIOfn as the Lending Club Secondary Market, just like their direct competitor, Prosper. The program is run separately though so you will need to open up separate accounts on FOLIOfn for each platform. This allows those who live in states where direct investment is not possible to still take part in Lending Club. Residents of the District of Columbia, Kansas, Maryland, Ohio, Oregon and Vermont however are still not eligible to use this trading platform either.

One of the really great things about them having this trading platform implemented is the fact that investors can now liquidate their portfolios. If they are short on cash and need to get their investment back quickly they can liquidate their notes and get their cash back often within days. It might be at a reduced rate compared to what they invested but it is always nice for investors to have that option.

A common strategy is for people to sell their loans that are late on the Lending Club Secondary Market. Some investors will put the loan up for sale as soon as it goes into grace period and others will wait a little while longer knowing that the payment might just be a few days late for a good reason. Others wait until it is 16 days late and then put it up for sale although at that point it will usually sell for a discounted rate.

There are hundreds of strategies that can be used on the Lending Club Secondary Market. The experts have really got it down to a science so it is worth the time to track one of them down to pick their brain.

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