P2P lending

[greenskeeper]

Thinking about investing in some P2P lending to get monthly income on my investment.

Who has done it and any suggestions?

I have about $20k to invest.

[mrpaseo]

I've looked into it, even went so far as to sign up and put some currency into the account. After watching the procedure it seemed that the veterans took advantage of the newbs so I backed out of the venture.

My only suggestion is, fully understand what you are getting into before you put your money out there.

Best.

[Goldy]

I invest with lending club and there are a few items to keep in mind. The interest rate is not your ROI unless you keep picking up new loans with the monthly income that is deposited into your account. I reccomend starting with a smaller amount and see if you think it's still for you after a few months.

They also offer signing bonuses of 100 bucks and I'd be happy to split it with you if you do ahead and sign up.

As for strategy, everyone has their plan and strategy but I have tried a few different ones and kept the loads from each strategy in different portfolios so I can track their performance but so far there is no difference. In general I look for loans under 10k and income over 3k per month. I tend to stick to the C notes and lower but have recently picked up a few A notes that looked interesting. I also only look at 3yr notes and reject any where the individual has more revolving debt than a few paychecks worth. Don't be afraid to take some shots too. My best note so far is from a guy who apparently trashed his credit and was in his last year of grad school before getting a nice job. I have been able to track his credit score and his story seems to hold water as his credit has improved over 150pts but the loan is still locked at 25% interest.

I haven't done much with the trading side yet but it seems really interesting albeit cutthroat.

[Goldy]

One thing that bugs me is that loans are now becoming hard to find. I looked two hours ago and found 4 loans that I would fund out of 8 that met my criteria but I was heading to dinner and couldn't pull the trigger. Each loan was brand new and had a few thousand dollars left on it but when I returned just now those 4 were gone and the other 4 that I was not interested in remained. It feels like big money has joined LC and is making it hard to find good loans unless you check very often.

[lewiskelly]

Now peer to peer lending is in business trend.Peer-to-peer lending most immediately brings to mind the largely feel-good act of extending small-time money to small businesses.For peer to peer lending,here business lending platform has define.

[5MinuteMoneyTips]

Lending Club Memo

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Jake Posey
5 Minute Money Tips

[SeanH]

(1) I would look into the tax implications. I thought this sounded interesting when I first heard about it, but I got the impression any earnings I made would be taxed as additional income.
(2) Somewhere out there on the internet is an interesting article discussing the fact that if your goal was to diversify your loans in an attempt to stabilize your returns ie. have a mixture of lower and higher risk notes that you would have a very hard time doing so.
(3) Whitecoatinvestor is a physician blog / boglehead and he posted a few different times about his experiences. In an attempt to summarize his take I believe he indicated: it takes longer than it should to start the loan process up - you have put money onto the site, but you are still waiting for loans to "be funded" which means you aren't earning returns during that time period. It can take a lot of time to invest all of your money to begin with if you have any sort of criteria that you follow. Ie. if you say I will only fund notes of a certain type that are doing it for a certain reason - there may be very few notes that fit your ideal loan. Depending on which P2P site you use you may not be able to sell notes (get rid of them) when they stop paying. One P2P in short - has a secondary market and the other does not. Certain states don't allow P2P. As your loans are paid off or not you have to put additional time into reinvesting the funds.

[Jerry91]

This is also known as social lending or lend to save option. When you invest here, you will be matched with borrowers who are looking for low rate loans and with smart savers who want high interest on their savings.