Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I tried it quite a few years back and I had one default (I only invested a total of $200 in different loans). It wasn't worth it. one default can really mess you up unless you invest a lot money in a lot of different borrowers. The biggest problem is you really have no way of assessing how credit worthy they will be.
It's easier and probably more profitable to just buy a bond mutual fund.
if the banks won't loan these people money why should you? to make any kind of decent money you would have to have a pretty large amount in this stuff. that means evaluating loads of potential borrowers to get diversification from default.
you gotta be kidding if you would take that amount of time to evaluate these borrowers. i would rather cut the grass and i hate mowing..
Last edited by mathjak107; 07-19-2013 at 02:35 AM..
It sounds like they'll help match investors with borrowers in the same community. The idea being that this added social layer (+ other social components) will lower the chances of defaulting but still provide a decent return to the investor.
I'm not comfortable with the idea of only lending to one borrower. I like Lending Club--I only put $25 into each loan, so even a full default would only lose me $25, not the whole investment. Do they have provisions for collections or judgments?
I have heard of sum people doing okay with this personally i dont think its worth the risk. Maybe a ton of microlending but like others said one bad apple can ruin any gains plus ur own money
Location: In a city within a state where politicians come to get their PHDs in Corruption
2,907 posts, read 2,070,571 times
Reputation: 4478
Problem with p-2-p lending is two-fold: a.) It isn't particularly liquid for the average rate of return it provides, especially when you want to cash out if/when the loans start turning south, and b.) it's a young, unproven asset class. It hasn't been tested during recession. Yes, I do know the platform was born out last recession, however that doesn't mean it will necessarily perform well when it all goes south next time.
Therefore, I've taken a pass on it.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.