Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

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Topic Author
Morik
Posts: 1345
Joined: Tue Nov 25, 2014 11:26 am

Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by Morik »

I experimented with LendingClub a while back with a Roth IRA.

All of the notes have matured except one. I don't really understand why this one is still outstanding--it was issued in 2016 with a 60 month term, but still has ~18% of its principle outstanding and is still receiving monthly payments. If I look at the progression of principle paid each month, it appears this note will take another 7 payments before it is paid off.

In March 2021 LendingClub updated the IRA custodian to AltoIRA. The fees were waived for 12 months. So they will start charging fees I believe in March 2022. Unclear to me what the fee is--AltoIRA pricing indicates either $10/month or $25/month depending on starter vs pro account, but I have no idea which one my account is and can't seem to find that info on Alto.
Other things I found online indicate that it is $100/year for lendingclub accounts held at Alto... Anyway I can contact Alto to find this information.

The total amount of cash I get from this note over the next 7 payments is < $5. Depending on the fee structure at Alto, this is going to cost me anywhere from $70 to $175 in account maintenance fees.

Does anyone know if it is possible for me to just abandon the note so I can close out the account and not pay maintenance fees?
veggivet
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Location: New England

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by veggivet »

It's been a while since I was on the LC platform, but couldn't you just list the note for sale at a pretty good discount? I remember when I did that with notes that I sensed were going to be late or default, I could almost always sell them quickly. Once you sell it, close your account, and say goodby to LC and their fees.
Topic Author
Morik
Posts: 1345
Joined: Tue Nov 25, 2014 11:26 am

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by Morik »

veggivet wrote: Thu Jan 27, 2022 10:00 am It's been a while since I was on the LC platform, but couldn't you just list the note for sale at a pretty good discount? I remember when I did that with notes that I sensed were going to be late or default, I could almost always sell them quickly. Once you sell it, close your account, and say goodby to LC and their fees.
They closed the secondary market as of Aug 2020, so it is not possible to do that AFAIK.
veggivet
Posts: 1481
Joined: Sun Jan 25, 2015 12:07 pm
Location: New England

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by veggivet »

Ugh...in that case, I would just close the account and walk away.
Topic Author
Morik
Posts: 1345
Joined: Tue Nov 25, 2014 11:26 am

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by Morik »

veggivet wrote: Thu Jan 27, 2022 10:17 am Ugh...in that case, I would just close the account and walk away.
Thanks--that works. I just called them and they are sending me an account closure form so I can abandon the last note.
veggivet
Posts: 1481
Joined: Sun Jan 25, 2015 12:07 pm
Location: New England

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by veggivet »

Good move! It looks like the stock has reacted negatively to your departure. Down 26% today... :wink:

FWIW, I haven't missed LC since I left them...way too much time invested for the return. I doubt you'll miss them.
Topic Author
Morik
Posts: 1345
Joined: Tue Nov 25, 2014 11:26 am

Re: Is it possible to abandon a lendingclub note? I have one note that is going to cost me a lot in account fees.

Post by Morik »

veggivet wrote: Thu Jan 27, 2022 10:36 am Good move! It looks like the stock has reacted negatively to your departure. Down 26% today... :wink:

FWIW, I haven't missed LC since I left them...way too much time invested for the return. I doubt you'll miss them.
Yeah I stopped investing in new notes I think in 2018? I'm glad my position is finally unwound.
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