[DiligentiaLLC]

I found out why Lending Club takes four business days to process a deposit/transfer of new money into one's account before the money is available for investing. As some of you may know, the deposit is instant with Prosper so I inquired with my LC rep as to why it takes so much longer with them.  Below is the response I received:

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[Peter]

Thanks Chris, that is good to know. I understand Lending Club's position and most companies take the 3-4 days to process transfer but I sure do appreciate Prosper's willingness to allow instant transfers. Thanks for sharing.

[GS]

I thought I would bump this one since, as a new investor, I found it helpful. 

I know with etrade, my transfers are instant.  I believe etrade puts a hold on the funds in my account, and they are withdrawn the next day.  I really like that.  I noticed that even with LC, when I look at my bank account transactions, it appears that the money is transferred to LC within 1 day, so I've wondered why they hold the money for an additional 3 days.

[ee1x]

I think what Prosper does is require you to have at least one note in your portfolio before they are willing to take on the risk. That way if the instant transaction fails for whatever reason they have some collateral in the form of your note(s).

It seems relatively safe so it doesn't quite make sense to me why LC doesn't offer this service as well.

[New Jersey Guy]

"I noticed that even with LC, when I look at my bank account transactions, it appears that the money is transferred to LC within 1 day,"

I put in for a transfer last Friday.  LC it would be available no later than Thursday (6-days).  I just checked my bank account.  It's confirmed CLEARED YESTERDAY April 29th.

I put in for a second transfer yesterday (Monday) and LC stated that money would be available no later than 7-days.  It got posted today as pending.

It's too slow.  I can't buy off the LC platform, but I feel for you guys that do.  Waiting for funding, applications getting cancelled, and now another week where your money hangs in limbo making nothing.

[Fred]

If time is important to you, and you are willing to pay, LC provides an option for "Wire Transfer - 1 business day":

https://www.lendingclub.com/account/wireMoney.action

[Zach]

The important aspect to consider here is that regardless of whether or not LC or Prosper were to have collateral for 'instant ACH transfers,' no loan would fund fast enough that couldn't just retract your investments if the ACH fails a few days later.

Obviously, Prosper hasn't had issues with it in their existence otherwise they would've pulled the plug on it.

The other thing is that Prosper has a hold on the instant transfer until the money clears on their end - you can't withdrawal the money until several business days later.

Fred: Wires are an option, but you get to pay a hefty $15-25 fee to originate one (in most cases).

[TravelingPennies]

from: zpbsfg on April 30, 2013, 03:45:12 PM

[TravelingPennies]

One nice thing that brings some hope to this discussion is that Dwolla and a handful of other companies are working towards getting rid of the wretched and painfully outdated ACH system and its pointless delays:

https://fisync.dwolla.com/

It remains to be seen whether or not LC or Prosper decides to hop on board but I definitely think this is the wave of the future. I'd be surprised if this doesn't become the standard within the next 5 years.

[TravelingPennies]

I would say the issue at hand would be more for ongoing account deposits, as opposed to first-time funding of an LC account. With first time funding, you're best off going with Paypal and collecting some Credit Card reward points/cash back.

I suppose, you can just never verify your bank account trial deposits on LC, and you'll indefinitely be able to fund using a credit card - until they catch on

With my most recent account, I funded 5, $5k transactions through Paypal

[TravelingPennies]

from: zpbsfg on April 30, 2013, 03:57:44 PM

[TravelingPennies]

from: ee1x on April 30, 2013, 03:56:23 PM

[TravelingPennies]

from: Fred on April 30, 2013, 04:04:17 PM

[TravelingPennies]

from: zpbsfg on April 30, 2013, 04:08:28 PM

[mhvu]

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