Feb 19, 2008

Reconsidering Prosper - Thinking about Lending Club

When I first started thinking about becoming a P2P (person to person) lender, the only place to do it was Prosper. Then Lending Club came along, but I figured the two would be much the same. And now that I've set aside the money I'm going to lend, I figured I'd just go with Prosper since I'm already an affiliate there.

Then I read this post from The Dough Roller and realized that the two companies aren't necessarily the same and that rates and fees can vary - sometimes significantly. Obviously, more comparison is warranted.

Fortunately, I have a pretty good idea of type of borrower I want to lend to (I'll be going with relatively low risk borrowers since I've read that default rates get pretty high with the higher risk borrowers - unsurprisingly). I'm going to use the info provided by DR to compare rates and fees on the type of loans I would be comfortable making before I decide which company to go with. I may even diversify my risk and lend with both companies.

1 comment:

Anonymous said...

CFO, thanks for mentioning the article. The different methods of determining interest rates was a real eye-opener for me, too. Good luck with your first investments in P2P lending.