Friday, February 26, 2016

P2P Accounts (Update) - FEB 2016

On February 1st, our Lending Club account balance was at $7,361.93We had $2,353.61 in available cash and out outstanding principal stood at $5,143.71
As our followers may already know, it has been more and more difficult to find and buy notes that meet our criteria.  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.  Unfortunately, we've just haven't had much success through automatic investing.  So in September, 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 continue to move idle cash back to our bank account and invest the money into our new Loyal3 account. We obviously need to do a better to job moving this idle cash because our available cash is growing faster than we are investing money into our Loyal3 account.
From our outstanding notes, we did receive $34.33 in interest. Thankfully, there are no charged off loans this past month so the entire $17.58 was considered a net gain for this past month.
With our Lending Club on auto-pilot using the automatic investing tool, unfortunately, we didn't manage to pick up any new notes this past month. In all, our total continuous to dwindle down and currently stands at 361 outstanding notes (26 notes have settled since our December post).  On the bright side, although our outstanding notes are not growing well, we have now seen a total of 922 notes paid in full.     
As you can see our  361 active notes are part of a very conservative mix with 71% of the notes being A Rated, 26% are B Rated, and 2% are C Rated.  We do not own any notes with a rating less than C. I'm not too sure why it doesn't add up to 100% but I assume that these number have been rounded down as they were closer to the lower number. 
We are currently generating a Net Annualized Return of 5.40% (up .05% from December report) on our seasoned notes. 

On February 1st, our Prosper account balance was at $10,196 ($107.33 more than our December report). We had $2,323.78 in available cash and out outstanding principal stood at $7,774.87.
All in all, our Prosper account is certainly seeing better performance than our Lending Club account, however, the struggle to find additional notes and having too much idle cash also exists for our Prosper account. 
From our outstanding notes, we received $585.23 in payments from our active notes. From those payments, we received a total of $51.36 in interest and with no loans charged-off this past month. Surprisingly, we also managed to re-invest $250.00 into new notes 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 a few C rated notes, they make up a very small part of our investments.  Unfortunately, like our Lending Club account, we have way too much idle cash.  Hopefully, that continues to change as we slowly begin to withdraw the idle cash and invest into our new Loyal 3 account 
We are currently generating an Annualized Return of 6.81% on our seasoned notes and 6.41% on all notes. 

Below are the updated numbers that include both Lending Club and Prosper accounts: 
Total Value of Both P2P accounts: $17,557.96

Estimate Average Interest Earned: 5.90%

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. With all due respect; why such a conservative allocation when the history of LC and Prosper both show that the most profitable notes are the Cs, Ds and E's? I wrote about my p to p experiences here

    1. Honestly, we now look at your P2P investments as a supplement for a savings account. We used to view it as more but simply don't have the time to dedicate towards finding the notes. Using the automatic investment tool, we are only comfortable going the conservative route. But as long as its beating a money market savings account or CD, we are happy. :)

      We will have to check our your write up later this weekend. Thanks for stopping by. AFFJ