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Peer-to-peer Lending
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Just opened a Lending Club account with a few hundred bucks.
Heard many good things about LC. Any tips to cut the chance of loss? Probably going to stick with investing in A/B notes.
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Seems like an easy way to lose your money. What is the appeal? Are they somehow securing these loans or something.
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>>1018850
The key when starting out is to diversify by buying as many notes at the minimum investment ($25). This helps in case one or two of your notes you invested in default.

Also I've been on LC since 2009 when I discovered it. I am earning an average annual return of 7.24% before taxes, which I am satisfied with. I invest in mostly A and B rated notes with lenders having good credit history. Also you can write off any default notes on your taxes as capital losses in case you are worried about that.
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>>1019757
I don't use this sorcery but this seems sound. 7.24% is a pretty decent average annualized return, depending on the level of risk you're taking on (I'm guessing not as high since A/B notes sounds safe ish?).
What's your default rate ?
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>>1018850
I'm already using Mintos and considering Twino as well.
Both of them have buy back guarantee.

I was thinking about Bondora as well, but found some very bad reviews.
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I've used them I do primarily the MMM strategy.
D grade refinancing.
I Check the job title Fico score and time since last delinquency.

3 years averaging 10% adjusted for loss.
21 loans 3 chargoffs looking like 4.

You want to increase the number of notes to smooth out your risk.

In D grade notes at 16% apr You need $1875 to add 1 loan/month b/c piecewise not normal.

$25/(.16/12)=1875
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>>1019757
I've heard that you lose most of your gains from capital gains. Any comment?
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>>1018850
Britbong here. Used Funding Circle for about 15 months now. Yielding about 9.8% at the moment, but expect 7 after tax and bad debt. Not bad if you diversify, and you lend to business with credit scrores, not people.
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>>1020106
Pic is my account. Have had a few bad loans but they're all director guaranteed so they're having to pay it off with their own assets. Despite losses, much better than a bank account.

They also operate in the USA and three Euro countries.
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>>1019762
A and B loans are the highest rated notes where you're lending money out to people with good income history and above average credit history. My default rate is around 2%. I try to only loan my money out to people with a 775 FICO score or higher with ample income to pay their loan back.
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>>1019856
My gains far outweigh my losses, hence the 7%+ annual return I am earning. I'm not becoming a millionaire but it's a fun thing to do with $10k I had laying around earning nearly nothing.
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What could happen if an investor does not meet the minimum requirements?

> 70k gross income + 70k net worth (assets)
> 250k net worth
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Just buy equities. Similar LT returns and less downside when the economy turns since an actual company is backing the security, rather than unsecured consumer loan refinancings...
Thread replies: 13
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