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Posted on 3/9/12 at 11:33 am to ich1baN
This article didn't ease my concerns. It is still a risk, and to tie up money for 3-5 years I think I would do better with something a had more control over.
A more detailed default rate wouldhelp ease some concerns.
A more detailed default rate wouldhelp ease some concerns.
Posted on 3/9/12 at 11:35 am to Pierre
quote:
After 3 years on a $5100 investment I'm $36.30 ahead. 26 charge offs so far on 96 original loans. This admittedly was thru a bad recession but their fraud prevention and collection process to me leave a lot to be desired
Posted on 3/9/12 at 12:19 pm to jcole4lsu
I've thought about putting a little money in one of these just to mess around with it. Apparently Texas residents aren't allowed to do p2p lending, but I created an account a while back when I was living in Arkansas that still works.
Posted on 3/9/12 at 12:46 pm to TyOconner
quote:
But supposedly you are 100% liquid. I have emailed them with my concerns so we will see what they say.
Investors thought investment grade corporates, high tier junk, and TIPS were liquid (TIPS due to being issued by the Treasury and AAA), then 2008 and BOOM, massive discounts to liquidity suppliers. Credit card issuers, with decades of experience, couldn't avoid massive chargeoffs with reams of data, financial info, and credit histories of seasoned borrowers. Since the borrowers apparently can't obtain credit from a traditional, or hard money, lender this makes pooling these loans an enhanced credit risk/facility??? How is one going to collect on nonperforming loans??? I would not waste my time nor money on that. Boring investing in solid companies is not the worst thing that ever happened to mankind.
There was an article recently focused on P2P in an emerging country and the massive increase in suicides, etc, after locals borrowed and were basically hounded to death by collectors. Prosper had many bad investor reviews.
Posted on 3/9/12 at 1:02 pm to tirebiter
quote:
high tier junk
No such thing as a safe junk bond.
This on the otherhand you can actually read through the person's proposal. 90% of loans are denied right off the bat and if you really want to be risk averse, just stay in Tranche A. Credit scores for tranche A are 750+.... It's not like they are taking joe sh1t the rag man off the street and giving him a loan. These are people with jobs, and good credit; you have the discretion to invest in whoever you want as well, which is an added diversified bonus.
I would just pick a few a day until you have hit your goal limit.
Posted on 3/9/12 at 1:10 pm to ich1baN
Starting to sound like securitized sub-Prime, brah, and that didn't end well. Prosper investors could choose only the highest rated borrowers as well and still had losses. Borrowers are in these pools for a reason. You are a high risk speculator or salesman.
I do not believe you are a Rivers alter, he hated IB's and banks way to much to supposedly work for one, and would not be pushing paper assets which may, or likely won't, have recovery value in default scenarios.
I do not believe you are a Rivers alter, he hated IB's and banks way to much to supposedly work for one, and would not be pushing paper assets which may, or likely won't, have recovery value in default scenarios.
Posted on 3/9/12 at 1:16 pm to tirebiter
I don't think you understand how this company works. The pools are separated. They aren't combined unless you choose to invest in separate pools. The risk is in accordance with your tolerance. They have been around since 2005 and have been through the brunt of the credit crsis without any losses.
It really isn't that difficult of a decision. If you don't know the difference between sub-prime and an 800 credit score, then I feel deeply sorry for you.
It really isn't that difficult of a decision. If you don't know the difference between sub-prime and an 800 credit score, then I feel deeply sorry for you.
This post was edited on 3/11/12 at 9:44 am
Posted on 3/9/12 at 1:23 pm to ich1baN
800 credit score would not need to utilize the structure.
ETA - from the linked article.
OK, borrowers who couldn't manage their finances and/or pay off existing debts are heavy users of LC. No, thanks.
ETA - from the linked article.
quote:
Lending Club and Prosper attract borrowers mostly for major purchases and debt consolidation. On Lending Club, more than 67% of the loans are for paying off credit card debts. Other loan types for borrowers and investors include home improvement, small business, and major purchase financing.
OK, borrowers who couldn't manage their finances and/or pay off existing debts are heavy users of LC. No, thanks.
This post was edited on 3/9/12 at 1:32 pm
Posted on 3/9/12 at 2:43 pm to tirebiter
Posted on 3/9/12 at 4:00 pm to Pierre
quote:
The truth is that the median return across all Prosper lenders was negative 3.2%.
Then Prosper compares the returns to, of all things, the returns of the S&P 500 equity index. Spin it, spin it. High yield and low risk do not belong in the same sentence.
Posted on 3/9/12 at 5:55 pm to tirebiter
quote:Right, and that's for a possible 10% return?
OK, borrowers who couldn't manage their finances and/or pay off existing debts are heavy users of LC. No, thanks.
Not appealing to this investor.
Different strokes though.
This post was edited on 3/9/12 at 5:57 pm
Posted on 3/9/12 at 8:10 pm to BigBoyTiger
quote:
I just threw $1,000 in a Lending Club account.
I've been doing it for a few years now. so far so good.
quote:
We will see how it works out.
manage your risk and diversify who you loan to and you will do fine, i am now getting 9% returns as of last month.
quote:
I'll let everybody know after I've been doing it for a year or so.
Yes, definitely keep us updated. Great that you are finally jumping in! welcome aboard!
ETA: it is a nice diversification to have along with stocks, bonds, mutual funds, commodities, and real estate or whatever else you invest in. I am looking into possible private mortgage note investing next.
This post was edited on 3/9/12 at 9:02 pm
Posted on 3/10/12 at 11:22 am to Fat Bastard
Thanks for your reply FB, it is hard to quell mass lemming dissent sometimes.
Posted on 3/10/12 at 12:59 pm to ich1baN
quote:
Thanks for your reply FB, it is hard to quell mass lemming dissent sometimes.
not a problem.
Just trying to share with everyone else and they can make their own decisions. I understand people being skeptical in the beginning. I think every investor was skeptical about most investments in the beginning before you learned how they work and what the risks were.
Different strokes for different folks. Just like you like PM's while many here do not. Or maybe some just do not like "possessing" physical PM's. I for one do not. However, I do not mind PM futures or ETF's though for a little change and diversity. I have a smidgeon of SPDR GLD ETF in my account. Heck, the last PM i traded as a commodity/futures contract was palladium quite some time ago.
Posted on 3/10/12 at 5:38 pm to ich1baN
The story on these deals is that, yes, you do tend to get a better yield but you also get a higher default rate.
Wiki their competitor, Prosper. They had the same kinds of yields but once you took default rates into account most members lost money, although not hugely. The average rate of return was -2%, supposedly.
Wiki their competitor, Prosper. They had the same kinds of yields but once you took default rates into account most members lost money, although not hugely. The average rate of return was -2%, supposedly.
Posted on 3/10/12 at 6:21 pm to foshizzle
Thanks for the reply foshizzle. The problem with Prosper from what I have read is that they took on a lot of loans that were not as prudent. That is why I like LendingClub more.
All in all, I use them to diversify a little more as well with some foreign banks that are paying around 5-6%.
All in all, I use them to diversify a little more as well with some foreign banks that are paying around 5-6%.
Posted on 3/10/12 at 6:55 pm to foshizzle
quote:
The story on these deals is that, yes, you do tend to get a better yield but you also get a higher default rate.
which is why you can choose your rate of return you wish for. higher ROR, higher risk per one's credit rating. I have only had ONE default. Has not hurt me at all in the grand scheme of things. 25 bucks. Big deal.
Prosper is running again? They were shut down awhile back. That is part of the reason I did my research and went to lending club instead.
quote:
The average rate of return was -2%, supposedly.
link??
This post was edited on 3/10/12 at 7:03 pm
Posted on 3/10/12 at 6:58 pm to ich1baN
quote:
The problem with Prosper from what I have read is that they took on a lot of loans that were not as prudent. That is why I like LendingClub more.
and that indeed could explain why they had to shut down for awhile in the past.
Posted on 3/10/12 at 7:49 pm to Fat Bastard
My return on Prosper was -4.5%. It stinks. Very poor collection effort. My portfolio had a 17% return but the write offs ate it up.
My advice read this before investing Prospers.org
My advice read this before investing Prospers.org
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