photo © 2009 Shun T | more info (via: Wylio)I first started out with peer to peer lending back in 2009. I looked at both Prosper and Lending Club but with Prosper in a quiet period then, Lending Club was the only real option available. So I transferred in $500 and started looking at loans.
An hour later after looking at dozens of loans I made my decision. I would invest $250 each in two B rated loans. Big mistake. Even though both these borrowers seemed like a good risk, a few months later one of these loans defaulted and boom, my net return plummeted. By that time I had already put in quite a bit more money and was spreading out my risk more, but even still I found myself in the bottom 10% of Lending Club investors at that time. [Read more…]