P2P Lending (Lending Club in particular)

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sunzt

Diamond Member
Nov 27, 2003
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So i've been reading up on P2P lending (Wikipedia, articles, loanacademy, etc) and i'm interested in trying it out. Probably spread about 1k in $25 increments. Has anyone tried Prosper or Lending Club or any experience with P2p lending in general? I'm thinking of Lending Club since it seems to be more successful.
 

DaveSimmons

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Aug 12, 2001
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Prosper was tried by people here (not me), a year or two ago. If you search you might find the old threads.

I wouldn't recommend it as an investment -- you'll get a high % of return on the successes but one or two defaults could leave you with a loss.

If I did this it would be with one of the nonprofits that use donations to make micro-loans in developing countries. With those, you're not worrying about returns since the money is gone for good.
 

Raghu

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Aug 28, 2004
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A thread of this sort keeps coming up every few months. Fundamentally P2P is what banks should be - facilitators of cash flow between lenders and borrowers.

I think interest rates in developed countries are quite low.

If you are going to be lending to people in developing nations, check the interest rates from banks in that country. Also check if your loan is denominated in $/local currency, to account for currency fluctuations. For instance, a 6% return from India might look good to you but is pretty dismal by Indian standards.

http://www.hsbc.co.in/1/2/personal/bank-accounts/fixed-deposits/interest-rates

The loan rates are obviously even higher. A secured home loan is ~10%. Unsecured personal loans are 15-20%.

That said, I wouldnt mind a $40k loan at 6% so that I can buy a place :p
 
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