P2P Lending

[flow321]

Curious to know if anyone has used Lending Club and what has been your experience with it? Whether it's positive or negative I would like to know your opinion, thank you.

[mjr]

MMM has written several articles on Lending Club.  They don't end well.

[tralfamadorian]

https://forum.mrmoneymustache.com/investor-alley/lending-club-time-to-panic/

[Car Jack]

If you can fire up Doc Brown's Delorean and go back about 6 years, it's a great idea for about 3 years.  Just get out before it starts swirling down the toilet.  I got completely out maybe a year ago.  My portfolio was sort of the opposite of Pete's.  All A and B loans.  I had no write offs and always matched his monthly percentage gains. 

Stay away.

[marty998]

Curious to know if anyone has used Lending Club and what has been your experience with it? Whether it's positive or negative I would like to know your opinion, thank you.

Someone gave you the wrong time for the party mate.

[efree]

I don't know about Lending Club but I've been using Mintos for a year and I like it. My ROI so far (including the sign up bonus) is more than 15% p.a. It's different from Lending Club in that it offers loans from more than 50 different loan originators and most of them have a buyback guarantee - which means that if the borrower doesn't pay for 60 days, the loan originator buys the loan back from you. So the main risk is that the loan originator might go bankrupt. But I have spread my money around many loan originators so I'm not that worried about that.

[flow321]

Thank you all for your input. I greatly apprecite it

[privatefarmer]

I don't know about Lending Club but I've been using Mintos for a year and I like it. My ROI so far (including the sign up bonus) is more than 15% p.a. It's different from Lending Club in that it offers loans from more than 50 different loan originators and most of them have a buyback guarantee - which means that if the borrower doesn't pay for 60 days, the loan originator buys the loan back from you. So the main risk is that the loan originator might go bankrupt. But I have spread my money around many loan originators so I'm not that worried about that.

ummm... per Mintos.com "Neither Mintos nor the loan originator is responsible for a borrower failing to service the loan, including for late payments. In the case that a borrower is unable to repay the loan, investors may lose some or all of their invested capital."...

there's no free lunch. high returns come w/ high risk of default.

[chasesfish]

https://forum.mrmoneymustache.com/investor-alley/lending-club-time-to-panic/

Investor since 2011, 1.5% annual return since account inception.  S&P 500 returned low double digits during that same period.  Not impressed

[Indexer]

My post roughly 2 years ago:

I've always avoided Peer to Peer lending because I could care less what the default rates are during an expansion. What are those default rates in a recession? Even bigger question, what does liquidity look like in a recession?

Loans to people who have a hard time getting conventional loans = we have seen this story before. It's fine when unemployment is low. These people are already having a hard time getting loans at the bank. I use to be a loan officer at a bank. If I declined to loan you the bank's money when you were in my office(and I had your credit report) I'm not going to go loan you my own money over the internet.

I know lending club was around in '08. I also know they have limited data from then, the data they do have isn't good, and based on what I've read the average FICO score is lower now than it was back then."

My thoughts haven't changed. I would stay away.

[HAPPYINAZ]

I have done OK with Lending Club.  But I did mostly A and B class loans.  out of 23 loans, 1 defaulted, 9 were paid off and the rest are being paid off currently.  I am pulling money out as I  just didn't like that the shortest loan period was 3 years.  I do a lot more investing now in Peer Street, which is real estate loans that can be just a few months to a few years in length.  I have done better with Peer Street, getting 8-10% return.  Out of 52 loans, I have had one default but got the money back after the property was foreclosed on and sold.  That's the nice thing about Peer Street, that your investment is somewhat protected because if the person with the loan defaults, the property is taken over and sold and proceeds go to the investors.  I have been using Peer Street for 2 years and like it as some diversification to other investments in the stock market. 

[efree]

I don't know about Lending Club but I've been using Mintos for a year and I like it. My ROI so far (including the sign up bonus) is more than 15% p.a. It's different from Lending Club in that it offers loans from more than 50 different loan originators and most of them have a buyback guarantee - which means that if the borrower doesn't pay for 60 days, the loan originator buys the loan back from you. So the main risk is that the loan originator might go bankrupt. But I have spread my money around many loan originators so I'm not that worried about that.

ummm... per Mintos.com "Neither Mintos nor the loan originator is responsible for a borrower failing to service the loan, including for late payments. In the case that a borrower is unable to repay the loan, investors may lose some or all of their invested capital."...

there's no free lunch. high returns come w/ high risk of default.

I'm not sure where you got that text but this is from the FAQ: "A buyback guarantee is a guarantee issued by the loan originator to the investor for a particular loan, that confirms the loan originator will repurchase the loan from the investor if that particular loan is delayed by more than 60 days. The buyback guarantee is given at an individual loan level and is marked by . If a loan with a buyback guarantee is delayed by more than 60 days, the loan is automatically bought back by the loan originator from the investor at the nominal value of outstanding principal, plus accrued interest income."

As I said, I've been an investor on Mintos for a year and more than 50 of my loans have been bought back. The buyback guarantee always works. Well, unless the company as a whole fails, of course. Anyway, I like this business model much more than the one where I have to worry about every single borrower not paying.