P2P Lending

Our family's is focused on growing our peer-to-peer (P2P) lending accounts in an effort to one day replace our Emergency Fund with these accounts.  Currently, our family hold an account with both Prosper.com and LendingClub.com. There are other peer-to-peer lending sites out there but we chose these two because they are the two largest.  With that, we feel there is a better selection of higher quality notes and we believe they have more experience and resources to deal with potential defaults.
In an effort to grow our peer-to-peer lending accounts, we are currently re-investing all of the payments that we receive from our notes. And when the cash balance is low, we are also continuing to add more funds to the account so that we may constantly purchase new notes.

Our goal is to grow both accounts to a grand total of $50,000 which should bring us close to $3,000/month for a period of roughly 36 months.  We understand that the monthly payment will slowly decrease during this time as the notes are paid off. But, if needed, we should also have a decent dividend income that we could theoretically use to help supplement the our basic needs during such emergency. 


NOTE: The total provided here reflects the prior month as reports are not generated until the following month. As of May, we have decided to report our balances every other month since there is very change to report as our P2P activity has been on the decline this year.

January 2015 - $9,104.70
February 2015 - $9,148.82
March 2015 - $9,194.87
April 2015 - $9,226.09
May 2015 - $9,280.02
July 2015 - $9,374.86
August 2015 - No Post
September 2015 - $7,436.31*

YTD INCREASE: -$1,668.39*
* withdrew $2,000 to open Loyal3 account.

January 2014 - $6,441.46
December 2014 - $9,092.76

2014 INCREASE: $2,651.30



NOTE: The total provided here reflects the prior month as reports are not generated until the following month. As of May, we have decided to report our balances every other month since there is very change to report as our P2P activity has been on the decline this year.

January 2015 - $8,834.32*
February 2015 - $9,169.98
March 2015 - $9,187.84
April 2015 - $9,189.94**
May 2015 - $9,269.70
July 2015 - $9,360.81
August 2015 - No Post
September 2015 - $9,947.64***

YTD INCREASE: $1,113.32*
* deposit $50 to from bank account.
** deposit $300 to from bank account.
*** deposit $500 to from bank account.
January 2014 - $6,728.42
December 2014 - $8,758.00

2014 INCREASE: $2,029.55


Current: $18,735.67

(2014 - Year End: $17,850.76)


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. P2P has been a nice alternative investment for our family. Nevertheless, I still see P2P as simply a nice supplement to our online savings accounts and CDs. Your money remain liquid and the return is certainly better, but I don't think our return was quite 30% though. I believe the increased value was more because we had added more cash through the year.

    We'll continue to invest in P2P but I don't think there is simply enough quality notes out there to grow our portfolio to the size I had originally planned to. I still prefer to grow our money through dividend paying stocks. :) AFFJ

  2. Hey! Its good to see others tracking their network online also. Im intrigued with your P2P earnings. How long have you been investing with it and what kinds of returns are you seeing overall since day 1?

    1. CashFlowDiaries - we've been investing in P2P notes for about 3 1/2 years now. Overall, we average somewhere around 6% annually. Not incredible returns, but we like that our P2P payouts can now help supplement our emergency fund since we are getting paid almost daily from our outstanding notes. This has allowed us to slowly move more of our emergency fund into dividend stocks and help grow our passive income stream through dividends.

      I know friends who make more than 10% from their P2P notes so I know its possible, but they also deal with more defaults and late payments...something I really don't want to hassle with. :)

      Thanks for stopping by and leaving your comment. Best wishes! AFFJ

  3. Hi AFFJ,

    If you could only pick one, either Prosper or LC, which one would it be? Been wanting to dip my toes in the P2P lending pool and have been following your posts. Congrats for your great work towards, FI.

    1. A4I - you'll probably find that more notes are available in Lending Club if you manually invest. Lending Club has been around longer so is a bit more well known. However, I have found that Prosper seems to have a better automatic investing system. We now automate our purchase of notes in both companies and month after month, we always end up purchasing more notes through Prosper. So I guess our response is, it depends. :)

      If you go the automatic investment route, Prosper is hands down the better option from our experience.

      Good luck with your future investments no matter which one you choose. AFFJ

    2. In my opinion, LC's website is easier to use and gives you more information, but I agree that the Prosper automated feature seems to work better--my uninvested cash amount seems to be generally less there. I like the trading platform for LC more as well, and use it to reduce risk and increase cash flow.

    3. I agree with everything you said. LC seems to be easier to use and I do like their trading platform more. In fact, the trading platform seems to be the only place I find notes these days! We now mostly rely on the automatic investing system and as I mentioned in my last comment, LC doesn't seem to do a great job in that category. :(

      Thanks for stopping by and commenting on our post. Best wishes. AFFJ

  4. AFFJ, Do you still use P2P and moving fwd you plan to keep it active, funding more. I keep seeing people folding P2P, as investment firms money coming into P2P and not good opportunity for individual investors. As you had been doing P2P for sometime now, would like to get your opinion before opening an account. Thanks for sharing your thoughts.

    1. I am slowly closing my Lending Club account. I don't have the time to search for notes every day so I invest through the automatic investing platform. It appears that the notes in my criteria aren't available much any more as I very little activity. I am slowly moving my money over to Loyal 3 where I use the same strategy of investing $25 at a time into dividend paying stocks. Best part, Loyal 3 offers completely free trades.

      If you consider P2P, and especially if using the automatic investing platform, I would recommend you go with Prosper over Lending Club. Lending Club use to be better when it all began but Prosper is leading the way now. We see roughly 4-5x more activity in Prosper than we do with Lending Club. It seem just seems like the cash balance in our Lending Club account just keeps growing month after month.

      Hope that helps. Good Luck.

  5. It appears you haven't updated this since September 2015. Are you still using Prosper?

    1. Lisa - We are still using both Lending Club and Prosper. We are, however, slowly getting out of Lending Club as we have find it has become harder and harder to find notes that meet our criteria. Of the two, we like Prosper better and plan to continue investing for now! AFFJ