The two giants in the field are LendingClub and Prosper, as this chart from the above WSJ article aptly demonstrates:
I’ve invested in both Prosper and LendingClub notes for years. At times my returns have exceeded 15%, at times they’ve been less than 3%. My investments have included notes that the p2p giants have picked for me, they have included notes I’ve hand picked, and they have included notes I’ve bought from other investors on the secondary market.
With a number of readers asking me about investing with LendingClub and Prosper, I thought the best approach would be to show you my investments. So I increased my accounts at both Prosper and LendingClub to $1,000 each. Throughout the year I’ll report back on how these investments have performed.
Today, I want to show you just how easy it is to invest in LendingClub or Prosper notes. To that end, here is a short video I pulled together:
- Open an account: If you haven’t already, open an account at LendingClub, Prosper, or both. If you only what one account, I think LendingClub is the best choice. It’s a bit easier to use, and as the graph above shows, it has more borrowers who need investors.
- Fund the account: Funding either a Prosper or LendingClub account requires nothing more than linking a checking account. They’ll make two small test deposits to make sure the accounts are linked properly. Once linked, you can quickly and easily either add or withdraw funds from either p2p company.
- Invest in notes: As the above video shows, it literally takes a couple of minutes to select the notes you want to invest in. I tend to pick notes from borrowers within the top to credit score ranges, with a smaller portion going to more riskier loans. You can see below the notes that LendingClub picked for me using a moderate risk portfolio.
And that’s all it takes to get started. I’ll be publishing updates throughout the year with the performance for both LendingClub and Prosper.
Are you investing in p2p loans? If so, what returns have you experienced?