Comments on: What is Peer to Peer Lending?

By: Ryan

Ryan — Thu, 29 Jan 2009 14:39:39 +0000

Hi JJ: I only purchased a few top rated loans. I never had any late payments and have earned over 11% so far. Here is an update from my experiences: P2P Lending Update. If you are interested in signing up for Lending Club, you can get a $25 bonus, which will be enough to fund your first loan through LC: $25 Lending Club Bonus

By: JJ

JJ — Thu, 29 Jan 2009 14:09:31 +0000

I guess I’m late on this topic. I’ve made a donations through Kiva and have been hearing in P2P, but never took the plunge. Decided to try it out, but many of the sites you mention are closed to lenders, except for Lending Club.

They say the average return is 9% after losses and fees. is this your experience? I’m going to try it out with $1K but I’d like to hear from other lenders before putting in more.

By: Ryan

Ryan — Tue, 04 Nov 2008 13:48:50 +0000

Brian: I don’t know if they companies have made a sample P2P financing agreement public or not, but it couldn’t hurt to contact them regarding the issue. I have personally funded loans through Prosper and Lending Club and I didn’t have any problems with the agreement for the lender. Just keep in mind when lending that the loans are not guaranteed.

By: Brian

Brian — Sun, 02 Nov 2008 21:16:51 +0000

I am investigating the idea of offering peer to peer financing. Does anyone know where I could review a sample peer to peer financing agreement? I want to make sure I have everything in writing.

Thank you.

By: Ryan

Ryan — Tue, 15 Jan 2008 12:07:16 +0000

Hi fathersez,

Prosper first lines up the lenders for the loan, which guarantees the loan will be backed by enough people. Once they have enough people to fund the loan, Prosper makes the loan with their money, then sells small portions of the loan to the lenders who had previously agreed to fund the loan. Prosper handles the loan payments and distributions from there. In this case, the people buying the loans are almost like the bank; Prosper just acts as the middleman between the lender and borrower. But you are correct about the lack of overhead causing the rates and associated costs to be lower. It is an interesting concept, and one that I will write about in the future as I begin my investing journey with peer to peer lending.

By: fathersez

fathersez — Tue, 15 Jan 2008 09:25:14 +0000

This is a good outline of this P2P thing. We don’t have such a thing in our country. It is a very interesting concept.

So Prosper makes the loans first then sells down the loans?

Do they also handle the collections and pay the “final lenders”?

Banks take money from depositors and lend them out to borrowers. Can Prosper be compared to banks, except that it may have a far lower overhead and hence their cut need to be smaller?

I must find out more about this.

Thanks, Ryan.

By: Ryan

Ryan — Tue, 15 Jan 2008 05:10:46 +0000

Ciaran,

I agree, this is an interesting concept and I’m looking forward to learning more and sharing it with everyone.

By: CiaranFromChance

CiaranFromChance — Tue, 15 Jan 2008 04:50:39 +0000

Hey Ryan,

Well written and informative. It seems like this is catching on as I’m seeing more and more of this on different sites. It’s an interesting concept and i look forward to your future updates.

Who knows, I may have found another non correlated investment to recommend clients use, to further diversify their portfolios. Not just yet but maybe…