Lending Club: Anyone Invest?

[OneGuy67]

I invested a couple thousand back in 2008 in prosper.com. Took some hits during the recession and have had a steady small amount of loss due to non-payers over the years. I've lost the equivalent of what I've put into it and I have made in profit about half of what I put into it over the years. I have gotten wiser as to who I'm willing to lend money to and am only willing to lend to the safer (better credit) people and take a lower interest rate rather than gamble on a higher return with a riskier person.

[Great-Kazoo]

Interesting. I'll have to check this out some more. Keep us updated.

I wonder if you would irritate investors if you paid loans off early (they'd get less interest). I'll check the FAQs to see if there are early payment penalties.

Not if you invest with the right places

[Irving]

I invested a couple thousand back in 2008 in prosper.com. Took some hits during the recession and have had a steady small amount of loss due to non-payers over the years. I've lost the equivalent of what I've put into it and I have made in profit about half of what I put into it over the years. I have gotten wiser as to who I'm willing to lend money to and am only willing to lend to the safer (better credit) people and take a lower interest rate rather than gamble on a higher return with a riskier person.

It doesn't sound like your experience has completely turned you off to the idea though.

[asmo]

A while back I did Prosper for a few years. I made 36% ROI. Mainly large chunks for A grade stuff, and a metric fuck ton of low grade/low dollar. Only loan I ever got fucked on was the A paper.

[OneGuy67]

It doesn't sound like your experience has completely turned you off to the idea though.

My money is still there and I still actively invest. On top of it, I have received three loans from the site for progressively higher amounts to pay off higher interest rated items in a timely manner. The interest I make on my investment is higher than what I would get at any banking or stock institution, but there is risk to it.

[Irving]

With negative interest rates from banks becoming a possibility, I could see this becomming more popular.
Now I'm curious how people are using smaller loans. I think I might start suggesting this as a means for people I know with poor credit as a way to repair their financial lives and credit. Paying off a series of small loans has got to effect you positively.

[hawk1]

I've used TRADE KING online trading company (similar to eTrade) since 2007. $4.95 per transaction... They stay out of your hair and let you make all your own decisions. You win on your own and lose on your own. Bought FORD stock at $1.16, held on to for a while and sold it all at $15.43... Not a bad return!

Check 'em out!

[OneGuy67]

Yeah Irving, it can help out with your credit profile. All the interest rates I've received on the loans were in the low 12-13% and I was paying off credit cards with 18-21% interest attached. Plus the 3 or 5 year loan type helps out too. I always have paid them off early.

I'm happy to have invested and borrowed money there.

[Dave]

I got a loan from them almost a year ago to pay off CC debts and lawyers fees that were charging me about 22%. Got a 5 year loan to cover everything at 15%, I'm paying about the same per month as the CC balances but I'll be done in about 1/4 of the time. Having a family member steal your identity gets very expensive.

Once I'm clear in a couple of years (I make extra payments) I plan to be an investor in Prosper instead of sending my money to USAA's 0.1% interest savings account.

[Bailey Guns]

Follow up:

So I initially invested a whopping $250 into 10 different loans about a month ago. The loans have started paying back and this is what a typical information sheet on a loan looks like:



Keep in mind this is on a $25 investment.

I think I'm going to start investing at least $250 per month into this and see what happens. The potential returns are much better than any traditional savings plan, CDs or most other investments. I'm sure some stocks and/or mutual funds might do better but this seems pretty good to me. And I can diversify into many different investments and take as much or as little risk as I'd like. By breaking up the investments into $25 increments it really minimizes the risk I'll lose a lot of money if someone defaults on their loan.