The new year welcomes another update for my P2P investments with Prosper.com and Lending Club. For those who don’t know, I’ve been with Lending Club since July 2009 and with Prosper since July 2012. I will perform these updates twice a year. I may do quarterly update if returns change drastically or major changes in the platforms occur. Otherwise it’s steady as she goes!
Lending Club passed the one billion mark in funding November 2012. This is a great milestone and brings more legitimacy to the industry. Another shot of legitimacy is former Treasury Secretary Lawrence Summers joined Lending Club’s board. Peter Renton of Lend Academy released a book aptly named “The Lending Club Story“. I haven’t had the chance to read it yet. If it’s anything similar to his online course, it should be a great way to learn about Lending Club.
Since my last update, I’ve added an additional $1,100 to the account. My NAR has popped up to 10.93%. For the past 2 years, it’s still hovering just below 11%. Since the previous report, I’ve made $344.66 in interest; I now have 3 more defaults and just over 600 active notes. Nothing crazy to report. No news IS good news. Things seem steady both in terms of returns and finding new loans to invest. In the past six months, it appears Lending Club has improved their loan filtering process where the scoring of the loan more matches the credit risk. So there’s less of a chance of finding a diamond in the rough. In my opinion this is a great thing; Prosper, on the other hand, could use some improvement.
Nothing really new to report with Prosper.com other than my rate of return has increased to 14.05%, from 11.45%. My return without question will decrease as the defaults come in and they are seasoned. During this period, I made $34.68 in interest payments. As stated last year, I will be adding more money to this account (Lending Club is also included). More than likely I will do this in the third or fourth quarter of 2013. I’m currently funding tax deferred accounts first and have some major expenses to take care of first.
Disclosure: I have over $11,000 invested with Lending Club and over $1,000 with Prosper.com.