Your account will be reviewed up to four times per day, as soon as new loans are listed, with the goal of placing orders and deploying your cash as quickly as possible in accordance with your investment criteria. Depending on the factors below, your funds may be invested very quickly or it may take an extended period of time for all of your cash to be deployed.
The time required to deploy your cash using Automated Investing depends on:
1. The percentage of your account balance held in cash relative to other Automated Investing users.
Automated Investing prioritizes accounts with more available cash as a percent of the overall account size and places orders for those accounts first. As the Notes held in your account generate principal and interest payments from borrowers, your account may accumulate a cash balance which Automated Investing will attempt to reinvest automatically. However, due to the continuous inflow of borrower payments and inventory constraints, you should expect some amount of cash to accumulate in your account at times.
2. Availability of loan inventory on the platform.
Automated Investing reviews accounts and may attempt to place orders up to four times a day, as soon as new loans are listed. When Automated Investing attempts to place an order for your account, your account gets the same access to Notes on the platform as other investors who are placing orders at that loan listing period. Automated Investing is not a solution for limited inventory.
Automated Investing will not fund the last dollar of any loan listing in order to reserve inventory for investors who place orders manually. In addition, Automated Investing will not place orders when there are only a limited number of loans listed on the platform. At any given time, there may be loan listings meeting your investment criteria that Automated Investing will not select due to these constraints. Automated Investing users may browse loans and place orders manually at any time.
3. Your investment criteria.
Setting investment criteria that are concentrated on Note grades with limited inventory (e.g., loans with F and G grades) or grades with high demand (e.g., loans with C, D, and E grades) may increase the time Automated Investing takes to invest your capital. Some Note grade/term combinations are rare – Notes with G grades and 36-month terms and Notes with A grades and 60-month terms, for example. You may want to review LendingClub’s historical inventory when considering your investment criteria.*
For all accounts, the frequency of orders is based on the cash balance of your account, availability of loan inventory matching your investment criteria, and demand from other investors. The cash in your account may be deployed immediately or over a long period of time, and there may be weeks when many orders are placed and weeks when no orders are placed.
* This information is not intended to be investment advice. You should consult your financial advisor if you have any questions or need additional information.
A note on allocations by loan grade:
Should your Automated Investing criteria include an allocation of a certain loan grade or grades, the allocation you select will apply to your overall portfolio, including existing holdings. Depending on your existing holdings and your available cash, it may not be possible or may take an extended period of time for Automated Investing to approach your investment allocation.
Consider this example: assume an investor holds only A and B grade Notes but later sets her investment criteria to an allocation of 100% E grade Notes. Automated Investing will place order for E grade Notes only but will be unable to reach the investor’s new investment allocation during the period of time that she continues to hold the A and B grade Notes previously purchased. * Automated Investing does not sell Notes to rebalance a portfolio; it only places orders for Notes listed on the LendingClub platform according to an investor’s investment criteria.
Click here to log in to your account and enroll in Automated Investing.
* This information is not intended to be investment advice. You should consult with your financial advisor if you have any questions about your investment goals and criteria.
Automated Investing was previously known as “PRIME.”