| Peer to Peer / Social lending, is it for real? |
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Zector
Full Member
Cash: $ 12.60
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Joined: 17 Feb 2009
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| Peer to Peer / Social lending, is it for real? |
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Ok, someone on here posted about p2p lending. After some reading on line, it appears to be a viable way to invest with some decent returns.
So how many people have done this? Anyone with real experiences, or input on this? Any good stable site recommendations? Ive read some have gone under.
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Mon Mar 16, 2009 12:34 am |
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No-Brainer
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Location: Oregon USA
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It should be obvious that the increased rewards are tied to an equally increased risk. Go slow and don't put more than you can afford to lose into it.
I would still be interested in what anyone has experienced here myself.
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Mon Mar 16, 2009 2:42 am |
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Avino
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Joined: 27 Mar 2006
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I actually used one of the P2P websites to invest some money (11 loans for a total of 629.01) The way I did it was to have 50 taken out each pay period from my checking account and I would bid whatever I had made in interest plus the 50 I just put in on a new loan, never exceeding $65 for one loan.
I started this back in may of 2007 and each of the loans was for a term of 3 years.
So now here are my results:
1 Loan paid back in full
8 Loans are being paid back and are current
1 Loan is late
1 Loan filed for bankruptcy
I have received $336.60 in payments
current value (capital only no interest included) of my outstanding loans in good standing is 233.70 with an average interest rate of 16.35
Add that up and you get 570.30 if all of my loans were paid back today, I put in only $550 of my own money . So I would end up making $20 dollars, but some of my loans still have two years left and if one or two more defaults, then I may well end up loosing money.
My original strategy was to make enough loans so that each month I would have in income at least the minimum to fund a new loan ($50) and then stop putting in my own money and only fund new loans with the income being generated from the existing loans that I held. But then the lending service I was using went into some type of quiet period because they are registering with the "proper securities authority" in order to sell promissory notes and so on. In other words, no new loans can be made, and quite frankly I don't think I will continue, it was only an experiment on my part with very little money.
Hope this gives you some of idea of P2P lending.
Regards.
~A.
Also blogging @ avinos2cents.blogspot.com
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Mon Mar 16, 2009 8:49 pm |
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Avino
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Cash: $ 24.80
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Correction:
I noticed above my math is a little off, I put in $550 of my own money, but the value of the loans I made was 629.01, meaning of the 336.60 I have received in payments, 79.01 went to funding new loans, so I have only cashed out on 257.59, the current value of my loans is 233.70 and if those are paid back today, I end up with 491.29, a loss of $58.71. Now, take away the taxes I have had to pay on the income part of those payments (the interest and fees I have received) and my loss is a bit greater than the $58.71
~A.
Also blogging @ avinos2cents.blogspot.com
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Mon Mar 16, 2009 8:59 pm |
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JPhoenix
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I've had good success with peer to peer lending. Without breaking down the numbers too much - I began about 30 months ago and have had 3 charge offs out of roughly 30 loans. With an initial investment of $1,500 I've so far received back $1,620. I still have about $150 due to me over the next 6 months. That would be a net return of $270 or about 18%.
None of my returns were reinvested though, which could earn you more. I choose not to reinvest the earnings until I got a good idea of how well my lending portfolio would do. However, once I was inclined to reinvest these earnings I was unable to do so because Prosper (which is who these loans were through) went into their quiet period and stopped accepting new borrowers. In fact, this quiet period is simply a registration process with the SEC, which requires them to cease lending until complete. I think this is what you've probably heard about when you mentioned that some of the peer to peer lending networks have gone under.
There are a few that are already registered though and are operating right now. You can find them here:
http://hubpages.com/hub/make-money-with-P2P
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Thu Apr 23, 2009 12:22 am |
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No-Brainer
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Location: Oregon USA
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So 18% in 3 years is 6% a year, right?
If I take that kind of risk, I would want 6% a MONTH and I get that much and more.
Easiest Path to Grow Your Income For Free
Free Crypto Pays Compound Interest DAILY!
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Thu Apr 23, 2009 2:56 am |
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multimastery
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After reading this it doesn't sound like this P2P lending thing is too promising. But I know situations do vary but this get me too excited about risking it.
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Tue May 19, 2009 11:31 pm |
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Greg Orlando
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I know that p2p is used to mean peer to peer file transfer but p2p lending is something new to me plz explain.
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Wed May 27, 2009 8:44 am |
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