Friday, September 25, 2015

P2P Accounts (Update) - SEPT 2015

On September 1st, our Lending Club account balance was at $7,436.31We had $839.78 in available cash and out outstanding principal stood at $6,596.53
As our followers may already know, it has been more and more difficult to find and buy notes that meet our criteria.  Unfortunately, we don't have the time to search for notes each morning as we once had so we now rely on the automatic investing tool.  We've just haven't had much success through automatic investing.  So this past month, since we had way too much money sitting idle, we decided to open a new Loyal3 account. We will still keep our P2P accounts but plan to slowly move idle cash back to our bank account and invest the money into our new Loyal3 account. This was the reason for the -$1,987.44 net change to our account.
From our outstanding notes, we did receive $43.86 in interest. But was also had $26.27 in charged off loans so we only saw a net gain $17.58 this past month.
We did manage to pick up 5 new notes and thus invest $125 this past month. Hopefully that will help keep the account growing, albeit slowly than we would like. In all, we have a total of 413 outstanding notes and have seen a total of 846 notes paid in full.     
As you can see our  413 active notes are part of a very conservative mix with 69% of the notes being A Rated, 28% are B Rated, and 2% are C Rated.  We do not own any notes with a rating less than C. 
We are currently generating a Net Annualized Return of 5.25% on our seasoned notes. 

On September 1st, our Prosper account balance was at $9,947.64We had $1,187.19 in available cash and out outstanding principal stood at $8,760.45.
Although our Prosper account seems to be growing a bit faster than our Lending Club account, the struggle to find additional notes and having too much idle cash also exists for our Prosper account. 
From our outstanding notes, we received $601.63 in payments from our active notes. From those payments, we received a total of $56.89 in interest. But was also had -$5.76 in charged off loans so our net gain was $51.13 this past month. We also managed to re-invest $506.00 into new notes acquired this past month.
Similar to our Lending Club notes, the our Prosper notes are invested into a similar conservative mix. As you can from the pie chart above, majority of our notes are have an A or AA rating, although we do have C rated notes, they make up a very small part of our investments.  As noted above, we unfortunately have way too much idle cash.  That will change as slowly begin to withdraw the idle cash and invest into our new Loyal 3 account 
We are currently generating an Annualized Return of 6.98% on our seasoned notes. 

Below are the updated numbers that include both Lending Club and Prosper accounts: 
Total Value of Both P2P accounts: $17,383.95

Estimate Average Interest Earned: 6.11%

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.


  1. Hi AFFJ,

    Back when I used to be a Prosper lender I had the same problem, not enough quality notes to invest in. I've heard this is better with Lending Club, but I currently don't P2P lend so I don't know if this is the truth. With your strict lending guidelines you should do well as long as loans are available. Keep up the good work.

    1. Yeah, our experience has been the opposite. We actually have found more success in Prosper than Lending Club. In our opinion, both are no longer that great as it is too challenging to find notes and our cash stays idle too long.

      Slowly but surely, we are planning an exit. :(


  2. I really appreciate these updates as my sole passive income stream comes from dividends. I am open to trying out P2P lending and options too just waiting to read about more real world experiences before I jump in. I think you have the longest track record for investing in P2P notes that I have seen/read online. Seems like you have to be really careful who you lend to to limit those charge offs as I see your new criteria for lending. Keep these updates coming.

    1. Glad to share DivHut. Wish that I could sit hear and still highly recommend P2P as I would have a year or two ago. We like the liquidity and that it is another separate basket to keep our money, but just wishes that there where more quality notes to investment in rather than have our money stay idle so long. As you can imagine, with almost $20K invested in P2P notes, we are literally getting paid on multiple notes daily.

      Thank you for following along on our journey. We promise to keep the updates coming. :) AFFJ

  3. Thank you for sharing this information, as I haven't run across what a lender looks for on a P2P site. I am on the other side of investment, and have been looking for a debt consolidation loan. I have been turned down by banking institutions, and thought that a P2P would be a great solution. However, my credit score is 640 and I have been turned down by every P2P I have applied to because I have no revolving credit (no credit cards), a high DTI ratio (why I want to consolidate debt), and a Federal Tax lien paid off six years ago that the IRS won't remove until 2016. I am 100% service-connected disabled veteran and also received Social Security disability benefits, so my income is guaranteed. I have never been delinquent on any of the loans I have. The only site I have found that may be of assistance is WikiLoan, and I had to pay to have my debt consolidation request ($25,000 @ 10% for 4 years) published to be reviewed by lenders. However, after reading the above requirements, I feel that I have just thrown money down the drain.