Anyone have a prosper.com or similar account?

[Goldy]

I just found prosoer.com and was really excited because peer to peer lending is something that I have always wanted to look into but I didn't know where to start. Anyone have one? Got any tips for me? Also, do you know what the minimum investment is? I looked at one of the other P2P sites and they were requiring 20k to fund the account.

[sblatner]

I have two accounts at Lending Club. I started with $300 and invested that and then slowly added to it. Once I had had that for a year and was comfortable, I transferred my IRA. It took a while to invest all the money as I was loaning small amounts and was trying to focus on smaller loan totals. I am hoping the smaller the loan, the more likely of payback. I am averaging 6% on both my accounts and am very happy with Lending Club. The customer service is really good.

[Goldy]

Great! So how does it work if the lender defaults? Can you reclaim any of your principle via collections or is it just lost?

[Slug]

I recommend putting "prosper" into the search engine for this forum as a place to start and reading thoroughly at prospers.org as an ending place. If you still feel like investing, go for it.

[disneysteve]

I tried to get involved with Prosper but it isn't available in my state.

[bdoubleu]

My experience is only with Lending Club.

If the borrower defaults, they have an aggressive collections process. They tell you how they've tried to contact the borrower, what the response has been, etc. You can also see when the payment is due and when the payment was actually processed, to help identify which loans might be problems down the road.

I also have a loan that they've started to accept partial payments on (which isn't great, but much better than getting nothing!). From the two I've had default, they tried to contact the borrower a few times each month for several months (this is all documented so the lender is able to view it at any time). I had a couple that were 60-120 days late, and via their collections process alone, those are now current. And even with two loans defaulting, I'm earning ~8%.

I've been using Lending Club for a couple years now, and I really enjoy it. I like the overall idea of peer-to-peer lending. Although I struggle with whether to classify the money I put into it as "fun" money or "investments," since it feels like gambling sometimes!!