Portfolio Allocation Strategies

Lending Alpha offers three unique strategies based on your investment preference.

This strategy targets a lower risk profile in order to maximize annual return stability at the expense of lower annual returns. This is also the most tax-efficient strategy for taxable accounts.

Portfolio Targets
Annual Net Return: 5.5% to 6.5%
Average Interest Rate: 9.5%
Average Default Rate: 3%
Loan Count: 400+

Account Sizes
Recommended: $10k+
Maximum: $2M

Allocation Rates
Full Account: 3 weeks
Reinvestment: 4 times a day
Dynamic Loan Sizing*: No

This strategy targets a balanced risk profile in order to capitalize on the widest variety of economic and consumer credit environments. It seeks for the highest risk-adjusted net returns.

Portfolio Targets
Annual Net Return: 6.5% to 8.5%
Average Interest Rate: 14%
AverageDefault Rate: 5%
Loan Count: 500+

Account Sizes
Recommended: $20k+
Maximum: $2M

Allocation Rates
Full Account: 4 weeks
Reinvestment: 4 times a day
Dynamic Loan Sizing*: Yes


  • Returns are not guaranteed and may lose value.
  • Returns estimate were generated from Lending Alpha’s model that incorporate historical performance.
  • Expected portfolio loan grade and term distributions were based on Q4 2016 loan selection criteria per strategy.
  • Actual portfolio allocation distribution will vary depending on supply of loans and small account may not be able to be fully diversified as intended.
  • Loan returns assumes reinvestment of principal from payments and calculated as estimated annual Internal Rate of Return (IRR). IRR includes expected idle cash, loan charge offs, and Lending Club’s loan servicing fees.
  • *Dynamic Loan Sizing automatically calculates the value of the loan to invest considering the following: Diversification target, Cash Ratio (amount of cash relative to account value), and Expected relative loan performance.

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