Lending Club Update #2

Back on April 14th 2009, I posted an update on my P2P Lending with Lending Club. So far I have funded 116 loans of which 107 are issued and current, 2 are Late 31-120 days, 4 have been fully paid, and 3 have defaulted. Overall, very good performance compared to my previous Prosper account. My monthly income is now approaching ~$85 a month. My return on my portfolio is currently 12.52%. I recommend anyone looking to generate an alternative income stream to take a look at P2P Lending and Lending Club.

Lending Club Update #1

I continue to be a fan of Lending Club and plan on increasing my investing with the site. Too date, none of my 11 loans have EVER been late (much different from Prosper where almost 40% of my loans have DEFAULTED). Here are my lending parameters for Lending Club:

Rates: A - D
Credit Score: 660+
DTI Ratio: <10%
Delinquencies: 0
Funding status: 75% and higher
Loan Amount: $10,000 or less

These parameters have provided me with 0 defaults and a 12% return so far. I will update this blog over the course of 2009 with my lending progress.

Done With Prosper.com

Well, my stock picks are not looking too good at the moment. Who would of thought the market would collapse like that. But, check back in a year or so and they may not look so bad...

In previous posts I have discussed prosper.com (Peer-to-Peer Lender) as a nice alternative to invest your money. Well, due to a number of my loans on Prosper defaulting over the last couple of months, I have decided I will no longer be investing in any loans on the site going forward. Their credit requirements are too lax and their are too many defaults among their borrowers.

If I do invest in Peer-to-Peer Lending in the future, I will be using lendingclub.com where the credit requirements are more strict. I have nine loans with lending club, and so far, for all of them, the borrowers have paid on time.

Lending Club

There is new Peer-to-Peer lending site up and running now called Lending Club. It works similar to Prosper. According to their site, on average, you can earn 12.3% returns as a lender, and borrow money for as low 7.62% if you have a stellar credit. You can bid on loans in increments as little as 25$, or use 500$ and have them create a portfolio for you based on your risk aversion. I have been using Prosper for almost a year now so I'm going to try this site and see how it is.

Prosper Tips

Here are a few tips for you from what I've learned during my stint lending money on Prosper .com. Using these tips should help you make the most of your lending experience and maximize your profits:

1) Only loan to those borrowers with a C credit rating or better.
2) Only loan to those borrowers with 0 delinquencies in their credit history.
3) Try to fund only those loans that are automatically funded.
4) Aim for a interest rate of at least 20% on each loan.

If you look at this website, Eric's Credit Community, you can see that as of August 23rd, I am #267 of all Prosper lenders, based on my ROI to Risk ratio. So I must be doing something right.

Prosper Part 2

To continue with my last post about Proser. Prosper is now offering a 25$ sign-up bonus for everyone who joins as Borrower or a Lender (I myself am a Lender). So take a look and start earning 8-29% interest on your money! Just click here.

Prosper

I have not talked at all about my Prosper investing in this blog. I look at Prosper as a nice way to diversify my investments, get a high return on my money, and generate some passive cash flow. So far, in the last couple of months, I have invested 805$ in 16 loans at avg interest rate of 23%. I have another 200$ I will be investing next week. So far, all loans are current. My goal is to maintain a 20% interest rate for all loans, and generate a substantial cash flow for myself in the coming months. If you have not heard of Prosper, you can check it out here.