
Ask HN: Investing on P2P Lending Platforms? - spking
I&#x27;ve been looking at putting some idle savings to work on peer-to-peer lending platforms like LendingClub.com and Prosper.com, and curious what kind of experiences HNers have had.  I&#x27;m specifically interested in hearing about actual returns and default rates, as well as any potential newbie investor landmines to be aware of.  Thanks!
======
akg_67
You may want to consider checking out forums where people interested in p2p
lending come together for discussions.

Reddit [https://www.reddit.com](https://www.reddit.com). /r/sociallending is
the primary subreddit though lightly used. I have also seen p2p lending
discussions in /r/investing and /r/financialindependence.

Quora [https://www.quora.com](https://www.quora.com). The responders to
questions related to P2P Lending, Lending Club, and Prosper (search keywords)
on Quora tend to be industry participants and professionals.

Lend Academy Forum
[http://www.lendacademy.com/forum/index.php](http://www.lendacademy.com/forum/index.php).
This is the discussion forum exclusively related to all things P2P Lending.
Most forum participants are individual investors in P2P Lending.

I have been lending on Lending Club and Prosper for over 4 years. I consider
P2P Lending as part of my asset allocation to Junk Bonds.

I am attracted to these platforms as they enable direct access to an asset
class, consumer lending, that was largely unavailable to individual investors
previously. While debt segment is much larger than equities segment,
individual investors have very little avenues to directly participate in
debt/fixed income segments. P2P Lending opens up one such fixed income class -
consumer lending. My primary interest with consumer lending is in the
diversification aspects due to potential low correlation with other asset
classes.

I enjoyed learning about consumer lending and other fixed income segments so
much that in 2012 I started PeerCube
[https://www.peercube.com](https://www.peercube.com), an online crowd-lending
analytics and automation platform.

~~~
spking
Thanks! This was very useful. PeerCube looks awesome. Quick usability note--I
am unable to get past the captcha to register (tried about 6 times).

------
baccredited
I have about 3% of my net worth with LendingClub. Returns have been 8%. I use
the automated investing tools and don't focus at all on the number of
defaults, etc. Just let the algorithm work for you. Realize that you are
basically lending money in unsecured loans, so I wouldn't let this become a
huge part of your overall assets. I might go up a bit higher to like 5% of
total net worth. I like that LendingClub returns are not too strongly
correlated with the S&P 500.

I would not even bother starting without $5K or so. Since the minimum
investment is $25, you need a large number of loans to offset any harm a few
defaults can cause.

One word of warning: HN folks might have a tendency to get too geeky with the
hands-on tuning, creating their own special lending rules to optimize returns.
I would say don't bother. You are better off writing code for money and
investing what you make.

~~~
spking
> Realize that you are basically lending money in unsecured loans, so I
> wouldn't let this become a huge part of your overall assets.

Great point, thanks for underscoring that. 8% definitely beats the 1.5% I'm
getting in a CD. Thanks!

~~~
baccredited
If you are just starting to dip your toes into world of investing I recommend:
[http://www.mrmoneymustache.com/2013/02/22/getting-rich-
from-...](http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-
hero-in-one-blog-post/)

------
stevencorona
I've about $30K in LendingClub over the past 2-3 years. Experience has been
great, I don't consider it to be as risky as people make it out to be. I have
Automated Investing turned on.

    
    
      Account Value: $30,248.38
      Net Annualized Return: 8.68%
      Number of Notes: 1694
      Late 31-120 Days: 25 ($152)
      Charged Off: 58 ($1,934)
    
      Payments to Date: $22,813.38
      Principal: $17,433.59
      Interest: $5,378.99

