Peer to peer lending.

The default rate might increase if economic conditions get worse. Bonds with similar returns have a really bad credit rating (non-investment grade) for a reason

>>1673071
>The default rate might increase if economic conditions get worse.

True. But can the same not be said for companies within an index fund? Obviously a whole company going under is less likely that some loser defaulting on his 15% loan, but the opportunity to spread, say $1000, over 40 different borrowers I feel mitigates this to a pretty considerable degree.

>Bonds with similar returns have a really bad credit rating (non-investment grade) for a reason

But is it really fair to compare personal loans to bonds? Bonds are inherently very low risk low reward. The website publishes default rates, and an A1 rated borrower (9.99% before fees) has a default rate of 0.08%. I don't think you could find a 10% bond with a rate anywhere near that low.

Why jump in at 20%? Why not start at 5% and see how it goes?

>>1673072
An index fund doesn't qualify for anything. There are small-cap and nano-cap funds. Also you aren't only lending to "some losers" but mostly small firms in eastern europe AFAIK, are you?

Also, a bond is basically a loan to a company or a state. And of course the default rate of an A1 borrower is low, they get ranked down multiple times before going default.

>>1673081
>you aren't only lending to "some losers" but mostly small firms in eastern europe AFAIK, are you?

You are thinking of micro lending, which is mostly a charitable thing

OP is asking about peer to peer lending, which is personal debt in your own country

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>>1673083
you aren't. those are the options for p2p lending from a major p2p site here in europe.

also ask yourself why their credit rating is so low that you can get over 10% p.a. and the p2p site makes a profit aswell.

>>1673079
For sure. I think I will jump in with $500 to get a feel for it.

>>1673088
Not in US or EU. I'd definitely be lending to individuals. I see what you're saying, but I just did a quick look at one of my country's biggest banks, and their personal loans are at around 19%. Personal loans have always been stupidly high interest, so if the P2P site can undercut the banks by 8%, and offer loans to low risk people, then where's the big risk for me?