Comments on: Prosper Versus Lending Club

By: Tim Mc

Tim Mc — Sat, 03 Jul 2010 19:06:37 +0000

I’ve been with LC since Nov 2009. I am so excited… I’ve consistently been earning in the 15%-15.80% range since joining. I have ~ 180 notes, of which… 5 early payoffs, 2 late – but both of those are current, and on a “payment plan” that = about 20 cents less per payment over the next 6 mos, then goes back up. In order to get that great VERY low (non-existent so far) default rate with higher interest rates, is that I screen for borrowers that have a very reliable job, and no glaring red flags. Odd enough, but I screen out anyone who has worse grammar / spelling than myself (which gives them lots of distance to hang themselves… lol). I figure they better have a good education, and seem to have a good head on their shoulders. A weird example I can use from experience: a person in the health field 20 yrs (who I love to invest in – very reliable income), but can’t spell at all or avoids investors questions = red flag for me. I think – would i want them working for me? If not, then maybe their employer is thinking the same things, when it comes time to cut jobs. Just my 2-cents. Best wishes everyone.

By: Welcome to the Carnival of Money Stories – The Dough Roller

Welcome to the Carnival of Money Stories – The Dough Roller — Mon, 11 Jan 2010 22:56:24 +0000

[...] 100 Inspiring Personal Finance Posts for the New Year posted at Accounting Degree.com.MDP presents Prosper Versus Lending Club posted at My Dollar Plan.Joe Plemon presents Are You Eating Your Retirement? posted at Personal [...]

By: Jill

Jill — Mon, 11 Jan 2010 02:29:55 +0000

@Rimaye Yes, excellent point. if Lending Club doesn’t have a similar feature it may be because they screen these borrowers out beforehand. if not, though, it’s definitely an area where Prosper “wins.”

I’m glad Prosper has been so good for you. I definitely got in when P2P lending was new, and right at the start of the bad economy (late 2007) – these things undoubtedly contributed to my poor results. I’m not sure that Lending Club actually is better, that’s just been my experience. maybe one day I’ll go back to Prosper and compare them in real time – I realize that it’s not entirely fair to compare Prosper loans from 2 years ago with Lending Club loans today.

By: Week in Review: Gratitude Edition | Buck$ome Boomer's Journey to Retirement

Week in Review: Gratitude Edition | Buck$ome Boomer's Journey to Retirement — Sun, 10 Jan 2010 14:10:15 +0000

[...] Prosper Versus Lending Club. I’ve talked about Lending Club in the past but don’t know much about Prosper, another [...]

By: MJ

MJ — Wed, 06 Jan 2010 03:28:46 +0000

I just started lending with both. Lending club seems to be lower key. Sometimes, simpler is better.

By: Rimaye

Rimaye — Wed, 06 Jan 2010 03:28:03 +0000

Jill, one more thing in Prosper’s favor, in my opinion, is that you can click on a borrower’s profile and see if they have tried to borrow in the past. I use this as a way to screen borrowers for anything fishy: you would be surprised how many will change their rationale for a loan from one loan request to the next (i.e., one request for $5,000 to consolidate bills one week, another for $5,000 to start a business the next). That’s a huge red flag. So far as I can tell, Lending Club doesn’t let you examine a borrower’s listing history.

While I’ve only originated 7 loans with Prosper so far, and only 5 have been around longer than a year, I’ve had no defaults, and only one or two late payments. 3 have been paid off in full (2 early). Whether that’s due to blind luck or the fact that I thoroughly examine each listing and borrower profile before bidding, I can’t say.

I’ve only had a few months’ experience with Lending Club, but so far I prefer Prosper’s bidding on interest rates and the additional profile info. However, if I start seeing defaults on Prosper, I could easily change my mind.

By: Anthony

Anthony — Tue, 05 Jan 2010 20:59:33 +0000

@Daniel: I suspect it has to do with state securities laws and enforcement. State attorney generals often prosecute dubious investment schemes and various states may have guidelines or laws regulating investor qualifications – the assumption being that if you have enough cash flow or assets, you either know what you are doing or can withstand significant losses.

It can be annoying, but it prevents my grandmother from investing her pension in P2P lending, for example.

By: Daniel

Daniel — Tue, 05 Jan 2010 19:10:53 +0000

Do you know why some states don’t allow you to be an investor with lending club? Does living in D.C. really make THAT much of a difference that my investment options should be limited?