On February 1st, our Lending Club account balance was at $9,148.82 (an increase of $56.06 from last month). We received $583.55 in payments from our active notes; of which, we received $58.53 in interest (an decrease of $2.06). The principal balance of our active notes was $7,830.71 (a decrease of $119.32 from last month), with $50.00 of loans in review or funding and a remaining cash balance of $1,268.11 (an increase of $363.44). We are currently generating 5.00% on our seasoned notes. No loans were charged off this month.
We are thankful that we are don't seem to be losing any money, but with the automatic investments strategy not working out very well, more and more of our money is standing idle and thus losing value when inflation the opportunity costs are factored in.
Any ideas on where we could invest this growing cash pile?
On February 1st, our Prosper account balance was at $9,169.98 (an increase of $335.66 from last month, but this included a cash infusion of $300 on January 23rd). We received $448.95 in payments from our active notes; of which, we received, $61.56 in interest (an decrease of $1.90). The principal balance of our active notes was $8,173.36 (a increase of $346.71 from last month). We are definitely having much better luck with the automatic investing on Prosper as compared to Lending Club. Nevertheless, we are still currently sitting on a cash balance of $996.62 (an decrease of $11.05), of which a total of $120.00 is pending investments. We are currently generating 7.44% on our seasoned notes, and 7.22% on all notes invested to date (includes profits from paid off notes).
Even though we not having great luck finding notes that meet our criteria (described below, at least the accounts are continuing to show growth. Below are the updated numbers that include both Lending Club and Prosper accounts:
($391.72 increase from last month)*
Total Interest Earned in December: $120.09
($3.96 decrease from last month)
($3.96 decrease from last month)
Estimate Average Interest Earned: 6.28%
*The increase shown for the past month does include a cash infusion of $300.00.
Click below to view our peer-to-peer lending accounts history
Our family has been investing in peer-to-peer lending notes for approximately 3 years now. And because of past defaults, we have now refined our search criteria. As a result, we now take a slightly more conservative approach with the notes we invest in. Currently, we only invest in notes that fit the following initial criteria:
- Amount requested is under $6,000;
- Credit score of 700 or more; and
- Monthly payment will be less than $250.
From those we evaluate (Employment Status):
- The borrower's income (prefer > $50,000 but depends on amount requested);
- Length of employment (must be > 2 years); and
- Their occupation (certain occupations, known to be more secured, are more desirable).
We then look at (Ability To Pay):
- Their credit history;
- Revolving balance; and
- Debt to income level, etc.
We do not invest in any notes where borrow is currently delinquent, of if they have had a public record within the last 12 months. We also do not invest in notes where the description provided is "Other." We feel that there is too much risk involve when the borrower is not willing to reveal why he/she needs the money.