Saturday, August 1, 2015

P2P Accounts (Update) - July 2015

On July 1st, our Lending Club account balance was at $9,374.86We received $526.74 in payments from our 431 active notes; of which, we received $52.25 in interest. The principal balance of our  active notes was $7,104.97, with $25.00 of loans in review or funding and a remaining cash balance of $2,269.89.  We are currently generating 5.27% on our seasoned notes. No loans were charged off this past month.   

If you follow us, you know that we've been struggling to find and buy notes that meet our criteria.  We no longer have the time to look for notes as we had in the past when it was our early morning ritual.  We now rely on the automatic investing tool to find and buy our notes for us.  Unfortunately, the automatic investing (at least for Lending Club) has proven to be a terrible way to grow our account.  

Our account did grow $94.84 since our last post in May.  But the growth is simply from existing notes.  Unless we continue to find and buy new notes, the growth rate will slowly decline as the outstanding balance from older notes continue to diminish. The saddest reality is we are now sitting on over $2,200 in cash but there is not enough notes out there to keep pace with our cash flow from existing notes. Our cash flow is growing by approximately $350 a month, which means our outstanding balance is shrinking by almost that much each month.  I think it might be time to look for an alternative investment for our idle cash.  Loyal 3 maybe?  


On July 1st, our Prosper account balance was at $9,360.81We received $486.34 in payments from our 412 active notes; of which, we received, $60.26 in interest. The principal balance of our active notes was $8,589.96 with $428.00 of loans in review or funding and a remaining cash balance of $899.14. We are currently generating 6.65% on our seasoned notes, and 6.34% on all notes invested to date (includes profits from paid off notes). No loans were charged off this past month.   

Compared to Lending Club, Prosper has been much better in terms of putting our cash flow to use.  The automatic investing tool for Prosper found 24 notes this past month that met our criteria.  I'm happy to report that the cash balance in our Prosper account (as I am writing this post today) is now down to $50.40!  
Seeing the success with Prosper, we decided to transfer $500 from our Lending Club to our Prosper account.  We will continue to do so if our Lending Club account continues to show no progress.  


Below are the updated numbers that include both Lending Club and Prosper accounts: 
Total Value of Both P2P accounts: $18,735.67
($185.95 increase from May post)

Estimate Average Interest Earned: 5.96%

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.

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