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Lending Club, Prosper.com, and more: P2P Lending News Roundup

April 10, 2008 By 3 Comments

P2P Lending has been in the mainstream media news a great deal lately. I decided to post a roundup of many of the recent news articles on Prosper.com, Lending Club, Zopa, GlobeFunder, and Virgin Money. It is unfortunate that Lending Club entered a quiet period just as they were gaining tremendous growth in loan volume.

CNBC February 5th, 2008: From Zero to Millions: Financing Your New Business:

Online Family Lending Use a lending network designed for inter-family loans, such as CircleLending.com. Tools at that site will help you and your relative come to terms on the length of the loan and the interest rate, and calculate the monthly payment amount. For $99, CircleLending issues a legally binding promissory note and a repayment schedule. For $9 per payment, the company will set up automatic repayments using electronic funds transfer.

Peer-to-peer Lending: Several websites now make it much easier to find an investor who will back your business. Check out prosper.com, lendingclub.com and zopa.com.

Lending Club’s founder financed his first company with personal loans and high-interest credit cards. He eventually sold the business to Oracle. That experience inspired his new company. Lending Club, which launched on Facebook in May 2007 and on its own site last September, uses technology to match borrowers to lenders willing to offer unsecured loans of $500 to $25,000 with three-year, fully amortizing terms.

The author, Laura Rowley, must have used some old notes because [Read more...]

Filed Under: Lending Club, P2P Lending News, Prosper, roundup Tagged With: , , , , , , ,

More Lending Club Quiet Period Announcement Links

April 9, 2008 By 3 Comments

This extends my posting on the blog roundup of Lending Club quiet period postings…

HollowOak asks: “How far behind is Prosper? Or do they get kudos for having started the SEC filing months ago?”

Lazy Man and Money is calling Lending Club dead:

I have been worked for a number of start-up companies and they had one thing in common – they are extremely fragile. A high percentage of new companies fail.. I’ve talked to a few other Lending Club members… and they said they are gone and never coming back. They feel their trust has been violated. With each day that Lending Club can’t or doesn’t say anything to justify this inactivity, the more trust is lost. I might be blowing this out of proportion, but I’d rather err to the side of being conservative until I have reason to believe otherwise.

LazyMan is correct that their inability to communicate this issue over the next few months (?) is going to hurt Lending Club. It was communicated poorly, so I can understand why many people must assume the worst.


ProsperousLand wondered why he took yesterday off in his catch up post today about Lending Club halting new lenders. Mike had posted previously about Prosper filing with the SEC. RateLadder also posted information on Prosper’s SEC filing. The key line from my perspective from the Prosper filing is: [Read more...]

Filed Under: Lending Club, roundup Tagged With: , ,

P2P Borrowers Waste Time and Money with Early Payoffs

April 8, 2008 By 7 Comments

So far all my Prosper.com and Lending Club loans are current. I would be annoyed with loan defaults, but currently the number of borrowers who pay the loan in a month or less is starting to bother me. Why does a borrower bother to take out a loan for one month?

Here are a few instances from Lending Club of early paybacks that wasted my time and tied up my money while trying to find and fund loans:
[Read more...]

Filed Under: Lending Club, Performance, Prosper Tagged With: , , , ,

Prosper.com Lending Tools Webinar Cancelled

March 21, 2008 By Leave a Comment

Today, I planned to post some interesting information on Prosper.com lending based upon the Webinar (“Using Prosper tools for more effective lending”) that I signed up for with Prosper a few weeks ago. Unfortunately, [Read more...]

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Prosper.com Correlations: Late Loans and Interest Rate Caps

March 12, 2008 By 6 Comments

I often read that borrowers in one state or another are more likely to default on Prosper loans. I decided to investigate if there is any truth to the likelihood that some states are worse credit risks than others. The example that often comes to mind is Georgia which has a high default rate. Currently Georgia has nearly 8% defaults and about 10% late which is a higher than average rate of late loans, but nine states have more loans that are two or more months late than Georgia.

My interest in state by state loan default rates prompted my article Pennsylvania Loans: What were early Prosper lenders thinking? At the same time, I noticed how state interest rate caps vary widely from state to state — Pennsylvania 6% and Georgia 36%. I decided to see if the interest rate caps could partially explain the difference in Prosper loan default rates by state. My theory is [Read more...]

Filed Under: Performance, Prosper, Selecting Loans Tagged With: , , , , ,

Speech on P2P Lending for Toastmasters

February 23, 2008 By 2 Comments

It was my turn to give a speech last Thursday in the Toastmaster’s club that I attend. I decided to give the speech on P2P lending. For me, the most difficult part of selecting this topic was cutting down the material into only a 7 minute speech.

The Toastmaster (the person running the meeting) gives a short for the speaker, but the content is often provided by the speaker. I asked the Toastmaster to mention that this a perfect topic for me because it intersects two of my favorite topics — finance and the internet.

During the speech, I explained the basics of [Read more...]

Filed Under: P2P Lending News Tagged With: ,

Pennsylvania loans or what were early Prosper lenders thinking?

February 7, 2008 By 10 Comments

Browsing some Prosper lending statistics at LendingStats.com, I noticed that Pennsylvania loans are exceptionally late. 23% of the loans by dollar volume have already defaulted — despite the low rate cap of 6%. The low rate cap presumably should keep higher risk borrowers from receiving a loan. See Pennsylvania Loans Sorted By Origination Date. Other lower end rate cap states like [Read more...]

Filed Under: Performance, Prosper Tagged With: ,

Review My First Prosper Loans and Win a Book!

January 24, 2008 By 3 Comments

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%.

Filed Under: Prosper, Selecting Loans Tagged With: , ,

P2P Lending: Everyone is Watching

January 20, 2008 By 5 Comments

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 more...]

Filed Under: Getting Started, Performance, Prosper Tagged With: , ,

Second Peer to Peer Lending Carnival

January 20, 2008 By 1 Comment

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 more...]

Filed Under: P2P Lending News, roundup Tagged With: , , , , ,
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