Hello All,Has anyone run across the Lending Club?http://www.lendingclub.com/home.actionI read an article about it recently, and am intrigued. Basically the Lending Club is a peer lending web site, where individuals can create "notes" for borrowers and potential borrowers ask for funding for various projects, debts, goals, etc. The return rates are attractive -- averaging 9.05% and much higher possible, depending on risk, minus a 1% fee from Lending Club -- and the default rates are below 2%. I like the idea of peer lending, and I think there should be more of this kind of community exchange of wealth after the meltdown of so many industries last fall, particularly the financial sector. I love the idea of cutting out the middle-man -- the banks -- and helping our fellow citizens to achieve their goals (while also making some money, too). The more I think about it, the project is really kind of revolutionary.Any thoughts?-Narn Ceredir
I would question the default rates that have been quoted. I still have outstanding loans on prosper.com and can tell you that the default rates are much higher in reality than how they were advertised. If you look at lendingstats.com, you will see that someone has aggregated the return for all of the portfolios held at prosper.com and the default rates. It looks like someone is trying to do the same for lending club also. Go to lendingclubstats.com and you will see a similar presentation. The current default rate is 4.2%. Note that the number of loans over 30 days late is also 4.2. It has been my experience that once these loans go late, they don’t come back. I would suggest that you visit the lender forum on this site and see what type of issues they are discussing before opening an account.
From what I have heard, Prosper was a real nightmare. I signed up for lending club in June 2011 ($20k). I am not sure if it really matters, but I take pains to do only 25-50$ notes that I buy in the aftermarket. I look for notes with a rising or flat credit score, a history of payments on the note, and I check each note's application to try to weed out fishy stuff like a history of non-payments, or anything to do with starting a business or medical expenses. I am getting 13% on an annual basis. yes, I have had some charge-offs, but not many. I have about 500 notes and I have lost 3-4. honestly at at that rate I am wondering why I bother with stocks.
bgotchall,You realize you're responding to a thread that's over 2 years old...?And FWIW, I consider P2P lending to be too risky to seriously consider, yet I take a fair amount of risk in my portfolio.- Joel
Joel:I couldn't find a newer thread :)
bgotchallThanks for bumping this thread. Indeed a very intriguing concept. Appreciate you sharing your results.So are you saying that you go to this "browse" section and just add the monetary amount you want in $25 or $50 increments to contribute to the total loan/note amount? It also states how many days are left, etc.https://www.lendingclub.com/browse/browse.action#
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