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Peer to Peer Lending News Roundup – March 16, 2013

by Peter Renton on March 16, 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.

Lending Club’s peer-to-peer lending business growing from USA Today – excellent article on Lending Club from one of the leading national publications. Looks like LC is considering going into subprime loans…

Prosper Announces New API for Lenders from Prosper’s blog – For the technically inclined a new API has just been released from Prosper with over 475 data points on each borrower.

Prosper’s new RESTful API from Nickel Steamroller – I know Nickel Steamroller has been playing around with the Prosper API for a while and he shares his thoughts here.

Efficient Frontier Portfolio Optimization from Social Lender – A really detailed look at portfolio optimization for Lending Club investors.

$10,000 P2P LendingClub / Prosper Loan Portfolio Update – March 2013 from My Money Blog – This blogger invests equally on both platforms and shares his thoughts here.

Auxmoney Raised 12M from Union Square Ventures and Index Ventures from Wiseclerk – Looks like p2p lending is getting a boost in Germany with a large funding round for their leading p2p lender.

Bid Data No Longer Available from Prosper Stats – Rocco, the man behind the leading Prosper statistics site expresses how he feels about the recent decision to remove investor bid data.

Peer-to-peer lending offers double-digit returns from Interest.com – A primer on p2p lending featuring some background information as well as interviews with myself and Neal Frankle of Wealth Pilgrim.

p2p lending strategies from Samuel Hu – Some unusual investment strategies from this Lending Club and Prosper investor.

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.

What can p2p platforms really do to a credit score? - Great discussion of credit scores including some alarming charts from some borrowers who fell on hard times.

Is P2P the best way to have steady growth with compound interest? – Plenty of people chime in about p2p lending and other potential high yield investments.

Hold or Sell? - Is an active trading strategy a good way to make a profit at Lending Club or is better to hold notes to maturity?

{ 4 comments… read them below or add one }

Mr. 1500 March 18, 2013 at 6:59 pm

“What can p2p platforms really do to a credit score?”

Too bad there isn’t more that can be done. If you steal $10,000 from P2P lenders, you’ll get a bunch of phone calls and your credit score gets knocked. Steal $10,000 from the bank and you’re sent off to the pokey for a long, long time. I don’t see much difference.

I’m a big proponent of P2P lending. It just annoys me that almost all of the defaults I’ve ever had have made 3 or less payments.

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seeya March 18, 2013 at 7:07 pm

I wonder how many student loans which are not eligible for bankruptcy have been paid off with a p2p loan which can be forgiven (ie. bankruptcy).

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Kowser March 22, 2013 at 7:31 pm

@Seeya – Many I would suspect. In fact if I even see a hint of that possibility I won’t loan to the person, but I do my best to use statistics and not hunches to invest. It is also probably why LC discontinued the education loans which had an atrocious default rate.

@Mr. 1500 – Nice to see you again. I’d like to add Peter Renton to the list of people I keep running into on the P2P / Frugal Living websites who live in freakin’ Colorado (So moving there when my house burns down…. one of these days :-) . Most of my defaults are occurring between 3-6 months in, so I have quit lending and started buying loans on Folio. Will gladly pay a little premium to have someone else baby that loan for me until it’s past that crucial default period. Stronger returns me thinks…. We’ll see. Hopefully will push me to 18%+ from my current 16%.

@Peter – I wanted to chime in on the Ken L *praising* thread from the Investor Myths, but you shut down comments. Anyhow, my thoughts on an accurate LC ROI is the XIRR method using the end statement balance per month as it takes into account EVERYTHING (losses & gains on Folio. too). I know that’s what you use, and it seems the most accurate. It can really only be cheated by buying cheap bad loans, but those do come around real quick. Currently I am running around 16.2% (avg 9.5 month notes) with the XIRR based on the risk tables I built in Excel and thanks to Ken’s Lendstats some time ago, were well verified as being accurate.

@LendingClub – Update your Recovery Rate. April 2011 is so old!
PS. Hire me. I’m awesome and need a better job. Will gladly move to Frisco… :-)

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Peter Renton March 23, 2013 at 9:15 am

Kowser, Comments shut down automatically after 12 months as I would rather direct people to my newer posts. Everything changes so fast here. Sounds like you have an excellent strategy for your LC investments and I am glad you are doing XIRR analysis – it is the best way to go.

And let me know if you move to Colorado… :-)

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