Sunday, May 31, 2015

P2P Accounts (Update) - May 2015

On May 1st, our Lending Club account balance was at $9,280.02 (an increase of $53.93 from last month). We received $520.98 in payments from our active notes; of which, we received $55.48 in interest (an increase of $.30).  The principal balance of our active notes was $7,753.28 (an increase of $609.92  from last month), with $125.00 of loans in review or funding and a remaining cash balance of $1,501.74 (decrease of $430.99).  We are currently generating 5.15% on our seasoned notes. No loans were charged off this past month.   

This past month we put forth a little more effort in trying to manually find notes to help lower our total cash flow in our Lending Club account. We found some notes in pre-funding through the standard browse loans option. But we found the bulk of our notes through the trading accounts simply buying up notes that others are looking to cash out early. We definitely don't have the time to do this consistently every month so hopefully the automatic investments start to pick up more notes soon. :) 


On May 1st, our Prosper account balance was at $9,269.70 (an increase of $79.76 from last month).  We received $457.89 in payments from our active notes; of which, we received, $56.70 in interest (a decrease of $3.60). The principal balance of our active notes was $8,387.06 (an increase of $71.87 from last month). The last two months have been much better in terms of putting our cash flow to use.  Both from the bumping up our automatic purchases to $50 instead of $40 and simply because we had found more notes this past two months. Unfortunately, we are still currently sitting on a cash balance of $882.64 (an increase of $7.89), of which a total of $450.00 is  pending investments.  We are currently generating 6.41% on our seasoned notes, and 6.21% on all notes invested to date (includes profits from paid off notes).

Even though we are not having great luck finding notes that meet our criteria (described below), the accounts continue to show some growth (albeit very small). 

Below are the updated numbers that include both Lending Club and Prosper accounts: 
Total Value of Both P2P accounts: $18,549.72
($133.69 increase from last month)
Total Interest Earned in February: $112.18
($3.30 decrease from last month)
Estimate Average Interest Earned: 5.78%

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. Thank you for the update and for laying out your selection criteria. I am very interested in p2p lending. I finally opened an account at prosper but so far I've been too scared to fund it :)


    1. Congrats on at least completing the first step! May I suggest that you do what I did when we were first testing out the waters with P2P. We started out funding just 4 notes at $25 a piece. We let them settle and also waited a few months to watch the payments from those notes come in. Slowly, as we began to build more confidence, we slowly purchased a note or two each month. Like everything else, in time and through consistent investments, we began to see our investments grow. The results you see above is about 3 1/2 years in the making.

      Good luck should you decide to fund your account and invest in P2P. AFFJ

  2. Thanks for the update. P2P lending remains a mystery to me and not too accessible to us Canadians. Hopefully one day we'll get into P2P lending.

    1. Sorry to hear that P2P isn't yet available. P2P is definitely a nice option, but truthfully, it not an exceptional investment tool. I'm glad I've consistently invested in P2P during the last few years as we now have a nice little pot of money. But I think we probably could have gotten similar returns elsewhere, and possibly with less effort. Hopefully, one day you'll be able to find out for yourself if P2P is something you want to have as part of your family's investment portfolio. AFFJ

  3. Hi AFFJ...

    This looks very interesting and I really wish I could partake in P2P lending.. really badly. Wanted to do it for a while now, but as Tawcan says, most of these platforms are not available to us Canadians...

    Best regards

    1. Sorry to hear. Not sure why Canada has not allowed it yet. I'm sure one day that will change. For now, just watch others (like us), and learn as much as you can so when the time comes, you'll already know what to do and maybe even have a strategy in place. :)

      Thanks for stopping by. Best wishes! AFFJ

  4. I have a Lending Tree account and use auto investing. If not for that feature, I would close my account. For me, actively seeking notes to buy would defeat the notion of passive income generation. Hopefully your success with auto investing will pick up!

    1. FerdiS - Although automation is not a cure all, it has certainly helped deter us from closing our P2P account as well. Life, with two toddlers and a full-time job, has definitely been busy. Without automation, I don't think we would be able to find the time to find enough quality notes to make it worthwhile to continue. Especially, given that the good notes are snatch up in matter of minutes from being posted.

      Cheers to automation and more quality notes in the near future! AFFJ