Personal Loan Portfolio

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While browsing for articles for an academic project, I decided to browse academic journals for articles on Prosper Marketplace and related interest rates. I thought someone must have published in a peer reviewed journal something on Prosper, but I did not find any existing articles outside of newspaper fluff pieces on P2P lending.

I broadened the search for other industries and the impact that the internet has made on rates. I found an article with empirical proof that the internet lowered … Continue reading «Internet Reduced Insurance Rates: Similar Impact on Loans?»

Eric, of Eric’s Credit Community, today announced on his site the launch of LendingClubStats.com.

There are currently a few different chart categories including:

• Loan growth rate shows great growth in the loans extended on Lending Club.
• Loans by Current or Late Status. Eric points out that this chart is currently useless because of the average age of the loans. I mentioned the same thing about the loan late rates posted on Lending Club’s site.
• Also posted are … Continue reading «Eric Launches LendingClubStats.com»

As I promised, I have extended some loans with Prosper (although I am not quite up to $500 yet). Since everyone can see Prosper loans and which ones I bid on — see my loans at Lending Stats — I decided to have some fun with it by holding a review contest of my loans.

If you provide constructive and specific criticism/advice on 4 or more of the loans I selected (or bid on), I will enter you in a drawing for a finance book. Also, in an attempt to find more advice, if you mention my request for advice and link to this article in your blog, you can receive a second chance to win. All details at the end of the post.

Let’s move on to the the Prosper loans selected and funded each at $50. I stayed with Grades C or higher, no current delinquencies, a low number of recent inquiries, and a low total dollar amount, and DTI ratios of lower than 45%.

• $5,000 for a honeymoon trip to Europe. I don’t like that they could not save up for the trip since that is what I have done for my world travels, but the loan is small the numbers good. It funded at 10.9%.
• Grade C trying to cut down debt with a $6,000 loan. 24% DTI. … Continue reading «Review My First Prosper Loans and Win a Book!»

I noticed that Lending Club is denying most loans. Since that time, Lending Club has started posting the rejected loan profiles on the statistics page. Scroll to the bottom of that page for the file. The data is missing several fields that you would use to evaluate a loan, but it is still interesting. For example, 285 applications of 6672 rejected loans had no FICO score. The highest Debt to Income ratio listed was 3626400%. That is not a typo — 3626400%.

Of course I am missing some key data, but one looked like a potentially good loan which was rejected for being over the 30% DTI.
$25,000.00 1/7/2008 family loan FICO: 815 DTI: 33.60% memphis TN

Lending Club may be passing up good money by rejecting loans like this one. In cases like this, it might be better to let lenders decide if they want to take the risk. However, on others I was glad to see the loans rejected because there was an amazing amount of complete junk … Continue reading «Lending Club Posts Rejected Loan Statistics»

Lending Club updated their interface today with some great improvements. They announced a few days ago in their blog that these changes were coming along with a reminder of the Lending Club 5% bonus program. Also mentioned was the number of lenders on Lending Club doubled in the last month!

But I am writing today about the changes to the Lending Club interface. (Before and after screen shots below.) Many of the improvements are items that I requested in my initial Lending Club review. My suggestions included … Continue reading «Review of Lending Club Update: New Portfolio View, FICO Score, & More»

Are you a current P2P lender? If so, which of the following services are you using? If you are not a current P2P lender, are you considering it? If you select another P2P lending site, please mention in the comments which one. Thanks for voting.

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If you are considering P2P lending, sign up with Lending Club or Prosper for traditional P2P lending, Zopa for risk free CDs, or Kiva for philanthropic mico-loans.

My funds arrived to Prosper Marketplace a few days ago. I planned to jump into Prosper and start carefully selecting loans for funding. I browsed a few loans, but I have cold feet.

So I opened my blog to reflect…. Why am I nervous about bidding? I had no problem lending on Lending Club for a total of about $1,000 to date. So why is Prosper Marketplace different?

My trouble in starting to bid seems to come down to the openness of the market. That same openness is great for transparency. As I have read on other blogs, browsing P2P lending is voyeurism. I think it is a bit of Voyeurism and Exhibitionism.

Peer-to-Peer lending feels voyeuristic for several reasons:

• Many loans provide interesting, entertaining, or just odd stories.
• After browsing loans, you cannot help but to feel more secure in your own financial future because you had to read so many poor quality loans.
• It can be fun to pass judgment on others occasionally and with Prosper or Lending Club, you can decide who receives funding and who does not.
• Peer-to-Peer lending allows you to feel superior to others who are not as financially savvy. That is why most of them need the money.

Peer-to-Peer lending is great fun to view the financial lives of others. I like that part of the openness.

So what about the exhibitionism? … Continue reading «P2P Lending: Everyone is Watching»

I participated in the second peer to peer lending carnival which is hosted at Brip Blap. There were too many good submissions to decide on a favorite post in this carnival, but I will post links and comments below to a few favorites. I submitted my article on Lending Club rejecting most loan applications.

Peer-Lend posted information on the new bidding guidance and interest rates. Moolanomy posted information about his second loan on Prosper. Prosper Lending Review interviewed the Fynanz CEO. (That one was interesting enough that I already blogged about it.) Rate Ladder updated the vintage curves.

WiseClerk make some P2P lending predictions for 2008. One of his predictions (listed at 75% probability) … Continue reading «Second Peer to Peer Lending Carnival»

I checked my initial Lending Club portfolio and all the first payments have arrived on time. It is a minor milestone considering that each borrower must make 35 more payments to allow me to achieve my expected return on the portfolio. It still feels good to see the money arrive.

My first Lending Club portfolio consisted of 10 loans for a total of $375 at a wighted average interest rate of 9.27%. Despite the advantage that Lending Club allows small bids - $25 - I still extended half those loans at $50 each which was probably a mistake, but not a big one since they are all relatively low credit risks. The total payment is $11.93 per month.

It feels good to receive the first payment, but $11.93 is an insignificant portion of the entire expected payment stream.

Now the question becomes - what to do with the loan proceeds? … Continue reading «My First Lending Club Payments All on Time»

Tom interviewed Chirag Chaman who is the CEO of the soon to be released new P2P lending site Fynanz which will focus on student loans. It seems like a small niche since there are already governemnt backed loans in this category and the rates are rather reasonable at banks. However, with the price of tuition continually out pacing inflation and standard loan sizes, this may be a niche worth pursuing.

I found the answer to the following question interesting … Continue reading «PLR Interviews Fynanz CEO Chirag Chaman»