When I started investing in P2P (person-to-person) lending, back when it got its start, proper regulations weren’t in place. Thus, as you can see above, my returns were kind of crappy in the early days. Now that the P2P sites had to add much more stringent regulations, my returns aren’t that bad at 7%-8%. This is how my Prosper account is performing:
While I only had about $350 remaining in my Prosper account, given the results to date, I decided to put another $500 in and see how it performs. This is definitely a test and alternative investment while I focus primarily on my stock accounts.
With P2P investing you can choose how risky you want to be. I tend to opt for relative low-risk, investing mostly in A+, A and B borrowers who mostly want to consolidate their credit card debt because credit card companies are gouging them.
From 2008 to 2014, I’ve had 17 notes paid in full ($25 microlending each) with 4 charge offs (i.e. people who took my money and ran with it) losing $118.55. At the moment one note is past due and 34 are current. My gain to date is $57.45, which isn’t a lot but that’s also on a very small investment amount to begin with.
I’d like to get to the point where I have about $1k in my P2P lending account at Prosper. I also have an account at Lending Club with a small amount out in loans. Interestingly enough my LendingClub returns are about the same as Prosper. I guess that’s a good measure of what these sorts of programs perform when you’re being somewhat risk averse.
