Comments on: Four Peer-to-Peer Loan Investor Tips

By: Jim

Jim — Sun, 22 Mar 2009 18:46:52 +0000

Yeah with them you buy into a fund but they have relatively high expenses…

By: dmeanea

dmeanea — Sun, 22 Mar 2009 18:38:28 +0000

Actually, I found one in the google ads on this page. PertuityDirect.com uses lender money from the National Retail Fund, where investors “purchase shares” in the fund to get “automatic diversification” (from http://www.nationalretailfund.com/HowItWorks/). Unfortunately, it doesn’t look like the lender can specify the level of risk they’re comfortable with.

By: Jim

Jim — Sun, 22 Mar 2009 17:21:09 +0000

Tomorrow afternoon I have a post that does a broad review of the various peer to peer lending options available, so keep an eye out for that.

By: Jim

Jim — Sun, 22 Mar 2009 17:20:40 +0000

Not that I’m aware of, but if I do find some I’ll write about them.

By: Chiko

Chiko — Sun, 22 Mar 2009 16:22:35 +0000

Thanks, I plan to sign up with Lending Club pretty soon and really got a lot from these four tips.

By: dmeanea

dmeanea — Sun, 22 Mar 2009 16:10:53 +0000

Jim, are there any P2P lending services that will manage diversification for you? For instance, let you specify how much money you want to loan on a specific risk rating and desired return, and spread your investment out over several loans?

By: Eric

Eric — Sat, 21 Mar 2009 02:16:59 +0000

Good stuff…I’m still trying to find some loans to fund my referral bonus with actually.

By: jen

jen — Sat, 21 Mar 2009 00:09:35 +0000

It seems most of the p2p lending is not available in Texas. How about Pertuity Direct? Are other states eventually going to be added? It’s so frustrating not to be able to try this!

By: GaryG

GaryG — Fri, 20 Mar 2009 12:22:06 +0000

Something to look at is the Loan Grade. In the case of the motorcycle it is A3. There are only 2 sub grades higher than this. So this would be relatively lower risk. If someone has a good credit rating then they would use a P2P lending club to try to get a better interest rate than you could get at a traditional lending institution.

By: Claus @ P2P-Banking.com

Claus @ P2P-Banking.com — Thu, 19 Mar 2009 21:47:32 +0000

I agree with Gary that 8% interest rate is probably to low to get a decent ROI with the risks involved.

Nevertheless you are right, SJ, the whole idea is that both sides, lender and borrower win by elimnating the bank as the middleman who takes the spread.

The tips are good, there is definately a learing curve as lender and the services evolve as they mature (they are still pretty young) and naturely the market, the rates and the defaults develop.

It’s fun and unexpensive to put a toe in the water, so try it if it interests you.

By: SJ

SJ — Thu, 19 Mar 2009 20:44:02 +0000

Okay I am confused, but I reread the last point.
I guess I would want a “spread” to contemplate for the slightly higher risk that I am taking as a loaner.

But so we are accepting that the other party is unable to get a loan thru traditional methods? Which is why they are willing to accept the higher rates?

I think that kind of clears things…

The other case would be pairing low-risk loanee’s w/ investors, the problem arising that those people would be less likely to pursue p2p or need it?

By: Larry

Larry — Thu, 19 Mar 2009 18:39:29 +0000

@SJ Yes, optimally the borrower is paying a lower rate and the lender is earning a higher rate than if a bank or other middle man were involved. However, the base rate should be cost of a bank loan on a motorcycle, not a CD. Nate has it right.

By: Nate @ Debt-free Scholar

Nate @ Debt-free Scholar — Thu, 19 Mar 2009 18:23:30 +0000

@ SJ – I think that he means do not lend to a high-risk borrower at a low interest rate.

Thanks,
Nate

By: SJ

SJ — Thu, 19 Mar 2009 18:18:25 +0000

I am kind of confused by the last one…
isn’t the point of p2p loans to meet in between the cd and motorcycle loan rates?