Peer to Peer Lending | Personal Finance & Lifestyle | Yakezie Forums

I'm thinking about investing in the Peer to Peer market via sites like Lending Club or Prosper.

Has anyone invested in P2P before?  What kind of ROI can you expect? What amount should you start with?

Would love some insight into this.

Thanks Derek. Just the kind of info I was looking for.

LifeAndMyFinances said:

I never liked lending out money in places like this because the people that are borrowing are getting denied from the banks for a reason. They're more likely not to pay you back.

Not all the borrowers were turned down from more traditional lending sources.  Some are attracted by the lower interest rates.  Also, you can select the grade of note.  The more risk you take, the greater the potential reward (as with everything in life, right?).

I have $5K invested in Lending Club.  So far I have a 15.8% net annualized return, although it's still very early and typical defaults occur around half way through the loan duration.

There are some tips and tricks to smart lending, not just diversification as most believe. For example, there are tools and filters to get rid of certain bad apples, like anyone from California (seriously).  I'm planning a post on this later in the week if you want to look out for it.  In the meantime, check out http://www.lendstats.com for come filters and analytical tools.

I'm also planning to do a monthly update to my lending going forward, with continued analysis of investment types on Lending Club.  My current plan is to trickle in $500/month up to as much as $30K if I continue to have good results and feel comfortable with it. 

Note: I do not expect to stay at 15% NAR, but anything over 8% is icing to me.

Everything Finance said:

I'm thinking about investing in the Peer to Peer market via sites like Lending Club or Prosper.

Has anyone invested in P2P before?  What kind of ROI can you expect? What amount should you start with?

Would love some insight into this.

Peter from Bible Money Matters (a Yakezie member) posts his success with Lending Club: http://www.biblemoneymatters.c…..6-returns/

I've used both Prosper and Lending Club and received about 10% returns from each.  Plus, I've made decent money from their affiliate programs.  I haven't been investing in new loans though because I don't want to tie my money up.  Once I have more liquid cash I plan to start investing in them again.