Is peer to peer loaning a meme? Does anyone actually make money

>>1573004
I have an EXTREMELY small portfolio with LendingClub (less than $2.5k) as a test. Only started about 6 months ago, but so far so good. Really not going to be able to tell until the notes mature a little more.

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>>1573026

How bad are you fucked if someone defaults?

>>1573004
I don't know who they actually lend money to. They advertise loaning to people who can't get money from traditional lenders. But every pre-approval they send me is a decline in disguise even though I can get small loans or cards from a bank without too much hassle.

>>1573030
Not really. Just like any bank, the interest rates on the notes are based on the likelihood of a default, and cover the default rate nicely.

Furthermore, the minimum amount invested in a note is $25, so I have a bit over 100 active notes at the moment. The chances of ALL of them defaulting(especially at the same time) would be pretty slim. I'd imagine a pretty catastrophic event where every just stopped paying their loans like after the bubble burst.

The notes are spread out over people who have small returns but good credit, as well as those with larger returns but bad credit.

I have had several different notes end up in grace period and in collections, but as of today they are all caught up and I have none that are past due. Still an experiment, which is why I don't want to invest a ton into it right now.

>>1573033
>They advertise loaning to people who can't get money from traditional lenders.
That does not sound accurate to me. I have some acquaintances that borrow from them(actually might be Prosper) who have no problem getting "traditional" credit.

It might be more accurate to say that they get better interest rates than from a traditional lender, being that the overhead is so much lower.

>>1573045
Wait, so I can take a loan there, default and free money?

>>1573053
Depends. They work just like a normal bank. If you have an unsecured loan, sure, go for it, but you're going to be harassed by collectors and if you do actually go to default, they're going to fuck up your credit just like any other bank would. For secured loans like auto loans they will still have a lien on the title just like any bank.

Does that answer your question?

>>1573046
Read their marketing material? Propser, LendingClub, Kabbage, BestEgg, Upstart, etc. The one and only time I was approved it was for something exorbitant like 40% interest.

TMI: Winding down an unsuccessful business at the time had me bouncing back and forth between about 625 and 675. Every time my score dropped, offers flooded in, only to dry up when my score recovered.

Honestly, this time next year when I'm out from under everything but house/school debt, I don't see any reason not to go back to a credit union for any future borrowing.

>>1573026
I have an even smaller portfolio with Harmoney in New Zealand, 500 bucks. Like you say, it needs more time to mature but if you spread your notes across a sensible range of risk grades/interest rates then it's money for nothing really. Check it every now and then and reinvest/withdraw.

I'm fairly sure these are unregulated so if anything goes wrong you have to eat the loss.

Savings accounts on the other hand are insured by the government so you will never lose your capital.

Risk/reward basically.