Peer Lending Sites
  • I've noticed on other discussions that some members are involved with peer lending sites. I don't know much about it but would appreciate some feedback on your experiences.
  • I use Prosper.com and like them. They are quick, easy, and you can automate reinvesting of interest earned as well as automating monthly transfers from your bank account for additional capital. I do LendingClub as well, but only put a smaller amount ($5,000) in them, with high risk loans. LendingClub doesn't have automation yet for reinvesting, but it does for monthly transfer of money from your bank account to it. So far, after 8 months, Prosper is returning 14% with two late loans and LendingClub is returning 17% after 4 months with no late loans.
  • I have found that there are not a lot of B/C loans available if you like choosing the loans individually. I wonder if institutional investors are going to completely take over the P2P market. Im deciding whether to transfer some IRAs now and this is what is holding me back.
  • The yields on US P2P lending is amazing. I have a little money in RateSetter and Zopa in the UK, and both are yielding around 5% or so. The only reason I am using them at the moment is for diversification purposes...
  • Jeremy: Wow, that's not bad at all. Is it really as simple as creating an account and transferring money to Prosper/Lending Club? What protections are offered if the person defaults?

    Thanks in advance!
  • @Junior - It is that simple. If someone is late 31+ days on Prosper, Prosper goes after them in collections, but that is no guarantee of getting the money. But that is part of the risk of peer lending is defaults. Everything has a risk :)
  • Thanks! Haha, typical me. Trying to earn a return without risk :) Coincidentally, my close friend is looking to borrow from Lending Club or Prosper (of course I have no influence in this decision), which gives me the opportunity to experience the transaction from both sides. I am sure I will have a few questions along the way once I get the ball rolling. Thanks for the feedback and quick response!
  • @Jeremy - Thanks for the help. I signed up for both Prosper and Lending Club. What are the differences between the two? They seem pretty similar. Which one do you prefer?

    I am just waiting for them to verify my bank account, then I am going to sit back and watch the $$$$$$ roll in! I'll send some your way :)

    Again, thanks for the help. Looking forward to your response.
  • I find that lending club is a lot easier to use. Prosper has a quick invest option that will automatically set up your account such that it will auto invest based on your criteria, with available cash, but I like to look at the loans individually. You can always split your contributions between the 2 until you decide which you like better.
  • @Junior - I like Prosper better because they are automated. Lending Club is easier if you like to look at loans manually and choose who to invest from. I have a little in Lending Club and most of it in Prosper. I have over 300 loans and 2 have defaulted so far in Prosper. I have 50 loans in Lending Club and none have defaulted, but I only started Lending Club 4 months ago and Prosper about 10 months ago.
  • @hvgotcodes - Thanks. I felt like Prosper was a bit easier to use and more automated. I prefer to screen my loans manually, but I am sure I will make use of both sites.

    @Jeremy - Thanks for the info. I am looking forward to getting started. I'm hoping to have money in both accounts by Friday. If you don't mind me asking, what happens with those who default on their loans? Will you see any of your money?

    Thanks!
  • @Junior - Maybe you will get your money back on defaults, maybe not - depends on if collections can get it. But that is the risk of peer lending - people not paying back their loans. If everyone paid back their loans 100% of the time, it would be all I'd invest in.

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