Author Topic: LC Deposit Delay for New Money  (Read 11305 times)

DiligentiaLLC

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LC Deposit Delay for New Money
« on: April 09, 2012, 02:20:21 PM »
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:

Quote
"The industry standard for processing and settling of an ACH transfer is 4 business days.  Some institutions are willing to take on the risk of posting credits before they have settled completely, and Prosper is apparently one of them.  We have taken the stance that we want there to be no ambiguity on the availability of the cash on the other side of the transaction."


Thought some of you may have wondered as well.

Peter

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Re: LC Deposit Delay for New Money
« Reply #1 on: April 09, 2012, 03:32:12 PM »
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.
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GS

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Re: LC Deposit Delay for New Money
« Reply #2 on: April 30, 2013, 01:48:28 PM »
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  I believe etrade puts a hold on the funds in my account, and they are withdrawn the next day.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

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Re: LC Deposit Delay for New Money
« Reply #3 on: April 30, 2013, 02:05:17 PM »
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.
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New Jersey Guy

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Re: LC Deposit Delay for New Money
« Reply #4 on: April 30, 2013, 02:25:23 PM »
"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.
« Last Edit: April 30, 2013, 02:28:41 PM by New Jersey Guy »
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Fred

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Re: LC Deposit Delay for New Money
« Reply #5 on: April 30, 2013, 03:31:18 PM »
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

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Re: LC Deposit Delay for New Money
« Reply #6 on: April 30, 2013, 03:45:12 PM »
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).

Fred

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Re: LC Deposit Delay for New Money
« Reply #7 on: April 30, 2013, 03:54:18 PM »
Fred: Wires are an option, but you get to pay a hefty $15-25 fee to originate one (in most cases).

As I stated: if you are willing to pay ....

On the other had, LC also has the following:

If your first wire transfer exceeds $1,000, we will deposit $25 into your Lending Club account to cover those wire fees.

I think this shows a good deal of goodwill.

ee1x

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Re: LC Deposit Delay for New Money
« Reply #8 on: April 30, 2013, 03:56:23 PM »
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.
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Zach

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Re: LC Deposit Delay for New Money
« Reply #9 on: April 30, 2013, 03:57:44 PM »
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 :)

Fred

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Re: LC Deposit Delay for New Money
« Reply #10 on: April 30, 2013, 04:04:17 PM »
With my most recent account, I funded 5, $5k transactions through Paypal :)

Didn't realize that I could use PayPal. 

Care share how you did this?

Fred

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Re: LC Deposit Delay for New Money
« Reply #11 on: April 30, 2013, 04:07:43 PM »
It remains to be seen whether or not LC or Prosper decides to hop on board ...

I got a note from the county treasury that they no longer accept ACH for property tax payment this year.

I sure hope Prosper and LC would get onboard on the better/faster ways.

Zach

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Re: LC Deposit Delay for New Money
« Reply #12 on: April 30, 2013, 04:08:28 PM »
With my most recent account, I funded 5, $5k transactions through Paypal :)

Didn't realize that I could use PayPal. 

Care share how you did this?

If you create a new LC investor account, on the transfer tab you'll see an option for Paypal funding (up to $5k). This option will simply remain available up until you verify your first bank account with the trial deposits. The funds are available within 15 minutes (but generally, it's almost instantaneous)

Fred

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Re: LC Deposit Delay for New Money
« Reply #13 on: April 30, 2013, 04:13:41 PM »
If you create a new LC investor account, on the transfer tab you'll see an option for Paypal funding (up to $5k). This option will simply remain available up until you verify your first bank account with the trial deposits. The funds are available within 15 minutes (but generally, it's almost instantaneous)

Thanks zpbsfg,

Looks like this is no longer an option for my existing account.

I do plan to open an LC IRA account later this year, so this is still a good tip to know.  Thanks!

mhvu

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Re: LC Deposit Delay for New Money
« Reply #14 on: April 30, 2013, 07:17:23 PM »
Quote
As I stated: if you are willing to pay ....

On the other had, LC also has the following:

If your first wire transfer exceeds $1,000, we will deposit $25 into your Lending Club account to cover those wire fees.

I think this shows a good deal of goodwill.

Only with your first deposit