Wednesday, May 18, 2016

P2P Accounts (Update) - May 2016

On May 1st, our Lending Club account balance was at $7,412.09We had $3,698.61 in available cash and out outstanding principal stood at $3,713.48
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 our plan is 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 continues to grow each and every month.
From our outstanding notes, we did receive $25.55 in interest. Unfortunately, we had several charged-off loans totaling $30.45 this past month. So this past month, we actually saw a net loss of $4.89, further validating our reason and need to find a new way to grow our money.
Once again, the automatic investing tool for Lending Club didn't manage to pick up any new notes this past month. In all, our total continuous to dwindle down and currently stands at 295 outstanding notes (66 notes have settled since our February post).  On the bright side, although our outstanding notes are not growing well, we have now seen a total of 989 notes paid in full. Oh well, it was good while it lasted. You know what they say, all good things generally come to and end at some time. :)    
As you can see our  295 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. Even though we've seen 66 notes settle since February, this mix remains identical to our mix in February. Again, 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 5.35% (down .05% from February report) on our seasoned notes. 

On May 1st, our Prosper account balance was at $10,266.80 ($71 more than our February report). We had $2,127.06 in available cash, $82.72 in pending payments, and out outstanding principal stood at $8,057.03.
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 $301.45 in payments from our active notes. From those payments, we received a total of $47.19 in interest and with one loan for $6.33 charged-off and $7.32 service and collection fees this past month. Surprisingly, we also managed to acquire $1,040.35 into new notes this past month. Still not happy with the amount of excess cash but it is leaps and bounds above Lending Club. We've essentially given up on Lending Club but hold some hope that our Prosper account can continue to thrive for a bit longer. 
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.  
We are currently generating an Annualized Return of 6.59% on our seasoned notes and 6.27% on all notes. 

Below are the updated numbers that include both Lending Club and Prosper accounts: 
Total Value of Both P2P accounts: $17,678.89

Estimate Average Interest Earned: 5.81%

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. Do you any worries about recouping money invested in any outstanding loans, with the PR trouble that Lending Club is having at the moment?

    1. Kenny - the PR troubles at LC do concern me. Another reason why I'm losing faith in LC. I haven't bought any new notes in a very long time. At this point, I'm not looking to sell my existing notes. I think I'll just let them all run their course. As long as the borrowers continue to pay, I think we'll be fine.


  2. I was going to invest in LC,but due to pr trouble and after reading few forums people mentioned having headaches during tax times.

    1. The trouble over at LC does add to the other frustrations. Always do what is comfortable to you. We post our results and sentiments to help you in your decisions, never to encourage or recommend a particular stock or investing tool.

      Thanks for leaving your comment. AFFJ

  3. I wish I had the stomach for LC. It just scares me to death to have that kind of skin in the game. Lending to people is a risky business. I see the merit in it, don't get me wrong but it's just super high risk. Glad to see it's mostly worked for you though.

    1. DR - I would say like many things, it was good early on. But like the saying goes, good things always come to end (at some point). ;) At least for LC, I think the good is behind us.

      Best wishes, AFFJ

  4. I'm somewhat concerned about recent events, but I don't have any trouble keeping my money invested or getting decent returns. You just have at accept that charge offs are part of the game and look at the bottom line. Here are my recent results.

    1. Nice results RAnn. And yes, charge-offs are definitely part of the game. If you invest in riskier, higher paying, notes, you have to expect a higher level of charge-offs. Big risk, big reward they say! :)

      Thanks for sharing, AFFJ