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Lending Club Increases Minimum Investment to Open an Account to $1,000

Individual investors now must deposit $1,000 in order to start investing on Lending Club

May 17, 2017 By Peter Renton 3 Comments

Views: 693

Until today new investors at Lending Club could open an account with as little as $25. This has now changed. Going forward to open a new account at Lending Club you must deposit $1,000. The $25 minimum investment per loan still applies but you will no longer be able to start an account with less than $1,000.

Now, people who have accounts with a balance of less than $1,000 are grandfathered in. They will be able to continue to invest as before. The new requirements only applies to people opening new accounts or those who have yet to make an initial deposit.

The reason for this move can be explained in one word: diversification. We have written many times before about the importance of diversification and Lending Club has a page on their site dedicated to this topic. With $1,000 investors will be able to invest in 40 notes; while that is still not very diversified it is a lot better than investing in, say, four notes when someone starts with $100.

My Take

This is a good move from Lending Club. My only concern is that the minimum is still not high enough. I would like to see a $2,500 minimum that will allow investors to start with 100 notes. But I understand where they are coming from. They don’t want to set the bar too high so that people will be reluctant to give them a try.

In my own example I started with a $500 investment in Lending Club back in 2009. I wanted to test them out and wasn’t sure what to expect so I wanted to start out small. Would I have invested $1,000? Yes. I probably would have done $2,500 as well but the bigger the minimum the fewer new investors they will get willing to give Lending Club a try. So, $1,000 is probably a fair compromise.

Filed Under: Peer to Peer Lending Tagged With: diversification, individual investor, Lending Club

Views: 693

Comments

  1. carl says

    October 7, 2018 at 9:20 pm

    If I made 70k a year I might not be as interested in investing? I dont and so I cannot use this p2p lending.

    Reply

Trackbacks

  1. MonJa Monthly News Update- June 2017 | MonJa says:
    May 31, 2017 at 1:40 pm

    […] Lending Club Increases Minimum Investment to Open an Account to $1,000 (Lend […]

    Reply
  2. LendingClub Closing Down Their Platform for Retail Investors - Lend Academy says:
    October 7, 2020 at 3:05 pm

    […] closed down earlier this year, we have seen investors in some states being locked out of investing, increased investment minimums and there have been few, if any, new innovations for retail investors in many […]

    Reply

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LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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