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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 Read the rest of this entry »

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? Read the rest of this entry »

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) Read the rest of this entry »

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? Read the rest of this entry »

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 Read the rest of this entry »

Thank you for reading my first two months of blogging P2P lending. During this time, I have written 37 articles on P2P lending as I have shared my experience and learnings about peer-to-peer lending.

I would like to thank all the bloggers who have linked to my posts and added me to their blog roll. P2P No Bank Aggregator (managed by Rate Ladder) has provided a some traffic and makes it easy to break into the P2P lending blogging scene and to keep up with other blogs. Lazy Man and Money also sent many users my direction with the first Peer to Peer Lending Carnival. My MicroFinance (link removed 3/5/2008 because blog now MIA) was the first to add my blog to his blog roll. Other blogs have followed such as Prosper Lending Review and I have received a few mentions in the official Lending Club Blog such as this announcement. Wise Clerk also linked to several of my posts. I am certain that I missed some more bloggers, but I cannot remember all the links at this time.

Bloggers also helped create the content for my most popular post to date “Advice for New Prosper and Lending Club Lenders.”

Also, thanks to Lending Club which has already paid out Read the rest of this entry »

I decided to review the statistics at Lending Club and I scrolled down past the table towards the CSV file of data. There I noticed an amazing figure — Loans Not Approved for Listing. 5,137 loans for $44.9 million dollars have been denied for listing on Lending Club. The total number of loans approved is only 645 for $5.2 million. Only 11.2% of all loans submitted to the site were approved for listing, so Lending Club is attempting to keep out many of the lower quality lenders despite the fees that they could earn for originating possibly many of those loans. [Update: See the comments by Rob at Lending Club to know what loans are denied.]

I am glad to see how many loans they are filtering out, but one statistic on the page bothers me - the percentage of Lending Club’s late loans is currently premature to present in my mind. Currently, the percentage late is listed as 0.47% with a footnote that reads: Read the rest of this entry »

I heard last year about SUV owners who were upside down in their car loans resorting to arson due to high gasoline prices. Out of desperation, car owners torch (or pay $300 to a professional arsonist for the service) to collect the insurance money. There is a great quote from the article:

At the root of the problem: People pay too much for a vehicle they really can’t afford…

Jennifer Mieth, manager of fire data and public education at the Massachusetts State Fire Marshall’s Office, said car fires are “cyclical.” She added, “When times are good, fires are down. When they are bad they go up.”

…Rowe is not the only one who has seen an increase in SUV fires. Arson investigators in San Diego County saw vehicle arson go up 34 percent between 1998 and 2002, prompting analysts to surmise that more people facing economic hardship may be setting fires to their cars to escape high payments.

The sub prime mortgage crisis has similar roots. Read the rest of this entry »

I started peer-to-peer lending with Lending Club for several reasons, but I will invest my next $500 with Prosper Marketplace loans lat this week due to several factors including increasing interest rates and improving collection efforts.

The recent response to the poll of where to invest my next $500 was great and I followed my promise and invested $500 as directed by my readers - with Lending Club. Despite the success and fun of that poll, it is time that I gained some Prosper Marketplace lending experience. I’ll post a Prosper video tutorial similar to the video of selecting a Lending Club loans after I bid on several Prosper loans.

Actually, I only need to invest $475 rather than $500 because I have been credited for a referral to Prosper. Thank you to the person who followed my Prosper link who also received an account bonus.