FinTech

Lending Club Offers IRA Bonus to Investors for Tax Time

by Jonathan Dyer 6

Just in time for tax season marketplace lender Lending Club is currently offering bonus incentives to begin investing IRA funds on their platform. Those who open an IRA account by April 18, 2016 and invest funds from their account by June 30, 2016 are eligible to receive between $50 and $2,000 depending on the amount of money they choose to invest. April 18 is also the last day to contribute to IRAs for before the 2015 tax filing deadline and the annual IRA contribution limit is $5,500 or $6,500 for those 50 years of age and over.

Lending Club’s IRA services are available to those opening a new retirement account as well as investors looking to rollover funds from a current IRA. All rollover accounts will need to be in cash before they can be transferred to a Lending Club account.

Once accounts are set up and funded there are two ways to invest using the Lending Club platform. The first allows for automatic investing that will not only select loans for you to contribute to but also allow you to reinvest any profit you make to keep your money working for you. This option requires you to have a minimum of $2,500 in your account as it will purchase 100 notes (shares of various loans) at $25 a piece. Alternatively you can manually select the loans you would like to contribute to.

The Lending Club platform rates loans on a scale of ‘A’ through ‘G’ based on credit score and other factors. This allows investors to manage their risk by selecting the mix of loan types they prefer. There are three default choices — A&B Weighted, Platform Mix, and D-G Weighted — or investors can choose what percentage of each loan grade they would like to invest in. Note that this is different from the manual investing option as you are not choosing the specific loans, just the criteria for the loans.

For those who want more control over their investments, Lending Club also allows you to handpick the loans you contribute to. When browsing loans you’ll be able to see multiple pieces of data including the interest rate, term length, the borrower’s FICO score, what the loan will be used for, and how much of it has already been funded. From there you can choose how much you’d like to invest in that loan. While this can be a great option for those looking to be more hands-on with their investments, it will also require users to monitor their account and so they can reinvest their profits.

Over the past nine years Lending Club has facilitated over $16 billion in loans through their peer to peer platform. Not only has this benefited millions of borrowers but it has paid off for investors as well. In fact research has found that  99% of investors who hold over 100 notes with no one note making up more than 1% of their account see positive returns on their money. With the current bonus being offered to those who open new IRA accounts through Lending Club, now could be a great time to get started investing on their marketplace lending platform.

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Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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