Prosper

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GridironGems
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Prosper

Post by GridironGems »

Have any of you guys used Prosper or any of the other peer to peer lending sites? I don't need a loan, rather considering using it as an investment. Advantages/Disadvantages. Easy to use and worth it?
mpsz
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Joined: Sat Jan 09, 2016 6:11 pm

Re: Prosper

Post by mpsz »

There's plenty of other threads on this board covering P2P lending. Lending Club is another large player in this space.

In summary: it's risky. You don't have the same recourse as a bank does if your borrower defaults. Lending Club fired their CEO last year due to bad loans.
aristotelian
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Re: Prosper

Post by aristotelian »

No. S&P average total return is much better than anything you could get from P2P with the same level of risk. I will stay in stocks.
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woof755
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Re: Prosper

Post by woof755 »

We put in a little over $2k a year and a half ago.
~5% returns so far.
Probably didn't invest enough to make a difference overall, but I don't really regret it.
white coat investor's website has a nice explanation of his experience.
"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." | | --Jason Zweig, quoted in The Bogleheads' Guide to Investing
LeeMKE
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Re: Prosper

Post by LeeMKE »

I have, but once the stock market recovered, I let the loans pay off and put it back in stocks. I made almost 12% APR, which was great in 2009. but the stock market did better once it straightened out, and isn't nearly so much work. Selecting and investing was very time consuming. Once they welcomed institutional investors, I hear it became impossible for small investors to invest in attractive loans.
The mightiest Oak is just a nut who stayed the course.
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queso
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Re: Prosper

Post by queso »

Meh. I've been doing it a couple of years and have stopped reinvestment and am pulling out now as my loans are paid or charge off. Return was just under 4% so not worth it IMHO. You can beat that in 10 minutes with a crypto investment. :happy (or safely by just buying VTSAX)
runner3081
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Re: Prosper

Post by runner3081 »

queso wrote: Mon Dec 11, 2017 7:18 am Meh. I've been doing it a couple of years and have stopped reinvestment and am pulling out now as my loans are paid or charge off. Return was just under 4% so not worth it IMHO.
Same thing here. Have been in LC for a long time (max was about $20K in). Stopped reinvesting 1-year ago and am waiting for all loans to pay out or default. Initially, the return was around 10%, now it is low 5's. Add the tax treatment (normal income) on this and it doesn't make sense for the amount of risk you take on.

Also bought my max on the Lending Club IPO and didn't sell when it spiked. Now it is nearly worthless, double ouch :)
jwhitaker
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Re: Prosper

Post by jwhitaker »

runner3081 wrote: Mon Dec 11, 2017 9:45 am
queso wrote: Mon Dec 11, 2017 7:18 am Meh. I've been doing it a couple of years and have stopped reinvestment and am pulling out now as my loans are paid or charge off. Return was just under 4% so not worth it IMHO.
Same thing here. Have been in LC for a long time (max was about $20K in). Stopped reinvesting 1-year ago and am waiting for all loans to pay out or default. Initially, the return was around 10%, now it is low 5's. Add the tax treatment (normal income) on this and it doesn't make sense for the amount of risk you take on.

Also bought my max on the Lending Club IPO and didn't sell when it spiked. Now it is nearly worthless, double ouch :)
Yeah same here, although I sold the stock when it was maybe 10-20% down from the IPO price. So my lendingclub loan return is about 4% but my total return of the whole lendingclub enterprise will hopefully be 0% when all my loans are paid off.
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Veiled
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Location: Texas

Re: Prosper

Post by Veiled »

LeeMKE wrote: Mon Dec 11, 2017 1:08 am I have, but once the stock market recovered, I let the loans pay off and put it back in stocks. I made almost 12% APR, which was great in 2009. but the stock market did better once it straightened out, and isn't nearly so much work. Selecting and investing was very time consuming. Once they welcomed institutional investors, I hear it became impossible for small investors to invest in attractive loans.
Hm, interesting nugget there: private loans might have been more in demand during a bear market as people need money. Could peer to peer be useful as a diversification tool in a future bear?
CyberGuy
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Joined: Sun Nov 12, 2017 1:42 pm

Re: Prosper

Post by CyberGuy »

Veiled wrote: Tue Dec 12, 2017 8:10 pm
LeeMKE wrote: Mon Dec 11, 2017 1:08 am I have, but once the stock market recovered, I let the loans pay off and put it back in stocks. I made almost 12% APR, which was great in 2009. but the stock market did better once it straightened out, and isn't nearly so much work. Selecting and investing was very time consuming. Once they welcomed institutional investors, I hear it became impossible for small investors to invest in attractive loans.
Hm, interesting nugget there: private loans might have been more in demand during a bear market as people need money. Could peer to peer be useful as a diversification tool in a future bear?
On the flip side, aren't more peer to peer loans likely to go bust during a recession (bear market)?
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Veiled
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Re: Prosper

Post by Veiled »

CyberGuy wrote: Tue Dec 12, 2017 8:34 pm
Veiled wrote: Tue Dec 12, 2017 8:10 pm
LeeMKE wrote: Mon Dec 11, 2017 1:08 am I have, but once the stock market recovered, I let the loans pay off and put it back in stocks. I made almost 12% APR, which was great in 2009. but the stock market did better once it straightened out, and isn't nearly so much work. Selecting and investing was very time consuming. Once they welcomed institutional investors, I hear it became impossible for small investors to invest in attractive loans.
Hm, interesting nugget there: private loans might have been more in demand during a bear market as people need money. Could peer to peer be useful as a diversification tool in a future bear?
On the flip side, aren't more peer to peer loans likely to go bust during a recession (bear market)?
But on the flip flip side, aren't returns likely to be better? I don't know what the final analysis would be. (Probably a loser's game, but I'm not that into P2P lending.)
CyberGuy
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Re: Prosper

Post by CyberGuy »

Possibly. What is your recourse in prosper if a loan is defaulted? Just curious. I guess it might depend on the depth of the decline, sell off compared to deep recession.

I'd vote to give it a couple business cycles so there is more solid data. In the meantime a diversified stock/bond portfolio is time tested and known.
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unclescrooge
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Re: Prosper

Post by unclescrooge »

Meh!

Made 5-6% returns over several years. The defaults haven't been tested during a recession.

Taxation is at your highest marginal tax rate. I would rather buy junk bonds closed end funds.
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