Care to Prosper? P2P Lending Update
I'm rather risk adverse when it comes to my finances, but the idea of person-to-person lending has enough reward behind the risk for me to take some chance on the newly-minted credit market.
My Prosper plan is to handpick one listing per month to fund. I transfer $50 from my paycheck to Prosper and decide on a listing that I think is worthy. Most often I chose folks in the A or AA category (though I recently went as low as C) and I pick people who are trying to get a lower rate on their credit debt or who need smaller amounts of money for important things like house repairs, doctors bills, etc. I try to stay away from business loans.
Here's an update on how my Prosper accounts are doing (none have defaulted yet, knock on wood.)
Total Account Value: $357.43
Amount Invested: $350
Average Interest Rate: 14.76%
[[6 loans out, $50 each]]
| Loan Title | $ | Interest Rate | Credit Grade | Principal balance | |
|---|---|---|---|---|---|
| Paying off/ Consolidating Credit Cards | $50.00 | 16.00% | C | $0.00 | Current |
| Let me pay you instead | $50.00 | 17.00% | B | $1.06 | Current |
| Termites have destroyed my home, † | $50.00 | 15.55% | A | $2.21 | Current |
| Paying off Adoption Credit Debt | $50.00 | 19.33% | B | $2.11 | Current |
| Help Me Study Abroad ** Relist #2** † | $50.00 | 13.00% | B | $4.66 | Current |
| Emergency Home Repairs - Winter † | $50.00 | 7.00% | AA | $5.06 | Current |
3 comments:
Good breakdown. I am a bit more aggressive because of several reasons but all in all, hand-picking your loans is a great way to learn more about your investment experience.
I like your strategy. I also use a similar strategy by having $25/week automatically withdrawn from my bank account. My goal is to fund 2, $50 dollar loans per month. I bid only on loans where people are looking to get out of credit card debt by lowering their interest. I never bid on a loan where people have had any public records. I have gone as low as a D loan but try and stay with the AA, A, & B loans.
I just sent some money to Prosper to fund my third loan. I pick the lower risk people because I do not have a lot of money where I can afford to lose it.
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