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Peer to Peer Lending News Roundup – February 23, 2013

by Peter Renton on February 23, 2013

During the week I share the latest p2p lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here.

How I Make Money with Lending Club (My Investing Strategy) from My 4-Hour Workweek – Detailed strategy and background information from this blogger and Lending Club investor.

P2P lenders offer opportunities to hedge funds and investors, says industry veteran Suber from COOConnect – Prosper’s new Head of Global Institutional Sales, Ron Suber, explains why he thinks p2p lending should be included in the portfolio of all serious investors.

Lending Club’s plans to replace the U.S. banking system from Vator News – Some lofty goals from Lending Club’s CEO.

Understanding Peer-to-Peer Lending for Small Business from Intuit Small Business Blog – Decent introductory article on both the lender and borrower sides targeted at small business owners.

Is Lending Club going through growing pains? from LearnBonds – The author asks why the rate of loan issuance at Lending Club is down and wonders why they don’t verify all loans before posting them on the platform.

Prosper Review: The Complete Exam of Little Blue from LendingMemo – Detailed review of the number two p2p lender.

P2P lending — risk / reward analysis from Samuel Hu – Interesting, but somewhat flawed, comparison of p2p lending with asset backed securities.

Former FDIC counsel urges oversight for emerging P2P lenders from Bankless Times – I am including this article only to show how far we have to go as an industry to educate so called financial experts about p2p lending.

From the Lend Academy Forum

The Lend Academy forum is where investors go to discuss p2p lending. Below are some topics that were being discussed this week.

Effect of Payment Plan on Credit Score? – When someone goes on to a payment plan at Lending Club does this affect their credit score?

Do you read each listing? – Lively discussion about the benefits of reading a loan listing versus investing blindly based just on filters.

CORRECTED 1099-OID and 1099-B now available from Lending Club – The new 1099’s from Lending Club came out this week and some investors dig into the details.

{ 4 comments… read them below or add one }

PeerLend February 23, 2013 at 10:31 am

On the Vator article:

Eh – from a guy who had a windowseat at FDIC with an overview of the banks running wild for the last 10 or 15 years, what kind of a reaction do you expect? Grain of salt applies – in the same way it applies when someone, like the fellow who “spent 20 years in collections”, shows up on the forum and posts, freaking out, the first time someone defaults on his $25 chunk of one loan – and wants to know why the platforms don’t go and hire bounty hunters.

Curious to see LC talking about expanding into student loans, though – you’d think the next move would be to offer revolving or secured or the like, though, I understand student loans are good PR, as that market is imploding under its own weight at the moment. Salt grains, all around.

Reply

Roy S. February 23, 2013 at 10:06 pm

Personally, I would not invest in student loans. The entire higher education model is deeply flawed from government subsidies to lack of financial counseling on student loans to courses and majors offered to the actual return of most degrees to employers requiring a college degree for jobs that hardly require an eighth grade education to most people graduating college that should not have passed the eighth grade (I’m even talking about people with Master’s degrees who don’t know basic grammar, spelling or the difference between there, their and they’re and your and you’re!). Yeah, I’m not a fan of the educational system in the US. And as a result of the policies in place, I agree with a lot of experts that the student loan industry is the next big bubble to watch out for: http://www.zerohedge.com/news/2013-01-29/student-loan-update-situation-simply-unsustainable.

For now, I much prefer lending to those who are trying to get out of debt. I believe it is a much better use of my money than helping people get into a debt they cannot get out of – just my personal preference. I am looking forward to how LC and Prosper will change the banking segment of our economy, but I believe avoiding the student loan industry is a good idea for the time being – again, just my personal preference.

Reply

Bryce M. February 24, 2013 at 8:33 am

+1. +2 on avoiding student loans until after that crisis, too.

Reply

KC @ genxfinance February 23, 2013 at 8:09 pm

These are awesome links. I’m interest to know about the goals of the CEO of Lending Club.

Reply

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