Archive for the 'P2P Lending' Category

New Promotion

I have reported about previous promotions for a while now.  Generally, they have been for existing lenders and involve some form of 1-4% “rebate” on manual bids made to “Featured Listings”.

This week however, seems to be taking a cue from LendingClub and is looking to boost new lenders, not just get existing lenders to invest more.  This promotion is on top of the still running 4% rebate on Featured Listings.  The new promotion is open to new lenders only, here is what you get:

Anyway you slice it, this is basically a “2% to 3% bonus” on your initial funds invested.  Assuming you would have bought the items in question anyway.

Prosper Promotion Ipad


Please note, I am a lender and of affiliate of both and LendingClub.  You can read about my experiences here.

Important: peer-2-peer lending involves risk and is anything but a “sure thing”.  Consider reading all of the following links before investing and be sure to only invest an amount that is appropriate for you:


4% Rebate is back at

It has been almost a month since Prosper offered a 4% rebate to lenders and now its back!  This offer replaces the 3% offer and lasts through May 27th.  This bonus is only good on manual bids in the Featured Listing section.

If you are a potential, borrower – this doesn’t really affect you.  Unless of course your loan gets featured, then it is much more likely you will get funded.  LendingClub members, don’t forget that they too are offering a 3% bonus this month as well.

As always – I want to thank P2P borrower’s for paying back their peer-to-peer loans.  Remember, unlike big faceless banks… P2P loans are funded by your friends, neighbors, co-workers and other honest hard-working individuals.


Personal loan, debt consolidation raises rates again

Refinance with prosper.comIt seems like only last month that raised rates for borrowers.  At the time, I noted that Prosper appeared to be suffering from an imbalance of borrowers to lenders.  Put simply, there were more borrowers than lenders.  Prosper has attempted to fix this imbalance with lender rebates of 1 to 4%, but the simple fact of the matter is that the market was yelling loud and clear – the rates are too low.

The result, is that Prosper has again raised borrower rates and even notes:

In response to rapidly growing borrower demand in all risk categories, interest rates are increasing by as much as 2% for AA-, A-, B-, C-, D-, and E-rated Prosper Notes, effective today.

Today’s rate change affects the highest Prosper scores the most, with AA and A getting bumped a full 1% increase, while E is not touched at all.  The other key change is that the rate for returning borrowers is up almost 2% across the board.  This is probably due to people abusing the strategy of taking out small loans and immediately paying them off, only to get a new loan within a month or two at a much better rate.

In my mind, this is good news for lenders and ok news for borrowers.  For lenders the reasons are obvious, the lender gets a potentially higher rate of return and a nip more reward for the risk they are taking.  For borrowers, this is also ok news – primarily because it means your loan is more likely to be funded.  This is important because the old saying “time is money” holds true.  Of course having a lower rate would be nice, getting your loan funded at all is even nicer.

Refinancing now, even at a 1% higher rate, can still save you a hundred dollars or more over having to wait an additional month or two.

This takes some explaining, but to show that time is money,  please consider the following example:

  • You have $10,000 in credit card debt at 29.99%
  • Not counting any additional bank fees
  • You do not make any additional charges and start a payment plan to pay the card off in 36 months
  • Over this time you will pay approximately $5280 in interest

To compare, let’s assume you could have gotten a loan at 10.99%, and pay it off using the same 36 month plan:

  • Not counting any additional fees
  • Over this time you will pay approximately $1784 in interest
  • Thus the loan would have saved you approximately $3,496 in interest over 3 years.

Finally, lets compare what happens if you instead get a loan at 1% higher (11.99%), but get it now, or you have to wait 2 more months to refinance your credit card because your loan was not funded:

  • Your new loan at 11.99% would cost you approximately $1955 in interest
  • Paying your credit card off over 38 months instead of 38, would cost you $5604 in interest.
  • This is still a savings of $3,649 in interest.
  • The difference between the loan is $171 more interest, but the credit card results in $324 in interest… thus save $153 by getting your loan funded 2 months sooner, even at a higher rate.

My prediction is that lending rates will probably remain steady for the rest of the summer, but this fall, as other interest rates rise, I expect that Prosper and other P2p lending sites will once again have to raise rates.  If you agree that interest rates and fees are going to rise, it makes sense to refinance your higher interest debt now by getting a fixed 3 or 5 year loan via Prosper or LendingClub or anywhere else you can get a competitive interest rate and fixed term.

Personal loan, debt consolidation


Peer 2 Peer Lending Resources

The following is my list of P2P Lending Resources. If you are looking for a list of P2P lenders, check out our post here.

  • – Probably the single best reporting and P2p tool site around, if you lend or are thinking about lending with Prosper or LendingClub, you need to check this site out.  The blog is still updated somewhat regularly, unlike Eric’s Credit.
  • Lending Club Stats – Awesome, in-depth reporting for Lending Club.  Allows you to not only see reports for yourself, but all other Lending Club members.
  • – A wiki and set of forums for P2p lenders (focused on Prosper originally, but also covers
  • Eric’s Credit Community – This is the other big peer-2-peer lending stat / tools site you need to know.  Just like LendStats, the blog hasn’t been updated in a while.  However the data and tools are all based on’s data feeds and thus are fully up-to-date and very useful.
  • Rate Ladder – An active blog dedicated to P2p Lending news, information, borrowing and lending.
  • Official Blog – The official company blog, usually just tells you about promotions, but occasionally has some very interesting stuff.
  • Lending Club Official Blog – The name says it all.
  • – This is an active blog with updates, information and commentary on P2P lending world-wide.  Note, this is now under a new name: WiseClerk.
  • Peer Lend – Provides an interesting comparison chart and a bunch of links.

Now for the graveyard.  This history of P2p lending is not without its speed bumps.  When and other P2p lending sites first popped up 5 or 6 years ago, there was a flurry of interest and activity.  Unfortunately a lot of the original and very active communities and sites have since died off.  The reason for this boils down to a few key things:

  • Lending money isn’t exactly an exciting business. You make your micro loan and then you way 1, 3 or 5 years for it to be paid back.  It’s not like the stock market.  As a result some blogs and communities just kind of died out after the initial excitement wore off.
  • Privacy Concerns. There is a big push right now, most recently with and to lock down on the ability for lenders to question borrowers.  This is rooted in a deep concern that borrowers identities be kept anonymous.  This concern is also why a few original communities were shuttered.  Borrowers were abusing these forums, revealing information with hopes to get their loans funded.  You can read more about this happening here.
  • There were some trademark concerns. You can read about one here.

Some of the fallen include:

  • Loan Chimp’s Prosper Blog and Forum
  • IE Extension
  • Tokyo Joe’s Blog
  • ProsperWatch Google Widget new 3% Promotion

Not to be out in the cold, while LendingClub offers 1 to 3% on all today has restarted their 3% bonus promotion to lenders.  It’s a little different this time, the promotion runs from 5/12 to 5/26 and there will be 25 new Featured Listings each day. One thing I would be very curious about, is how Featured Listings perform over time versus all other listings.  I actually called Prosper and they say that Featured Listings are selected by a “random algorithm”.  I would assume their intent is to have them be random as to not imply that they are any better than all other loans available at any one time.  I can say looking at the quality of the borrowers, I don’t see any obvious pattern.  This is probably a good thing.

Here are the details:

3% Cash Back, with New Listings Every Day!*

Each day at noon we’ll be posting a new set of up to 25 listings. All you have to do is check in and make your investments, and you’ll earn 3% cash back!

The promotional period for this offer begins on Thursday, May 12 at 12:00pm PDT, and ends on Thursday, May 26 at 3:00pm PDT (the “Promotional Period), and all rebates will be paid by June 30, 2011. To be eligible, investments must be made manually on listings posted to, during the period of time the listing appears on the page. Only eligible investments during the Promotional Period that become funded Notes before the payout date will be considered “invested”. Invested funds can only qualify for one cash back promotion; in the event that a given investment qualifies for more than one such promotion, the investment will count towards each qualification threshold, if applicable, and the lender will be paid the highest available rebate amount. Investments made by automated plans are excluded from the promotion. Prosper reserves the right, in its sole discretion, to change the cash back rate of the offer at any time during the Promotional Period.

LendingClub May Promotion

Quick news from the peer-to-peer lending space. is offering a 1 to 3% bonus on all inbound money transfers.  This is similar deals that has offered in the past.  However, there is one key way: you can use it to fund any available loan, not just pre-selected “Featured Loans”.  We here at BYM are still new to, but have recently invested some money there.  We plan on providing a full review, like we did with, once we have more real world experience with the site.

Lending Club promotion

  • Receive a 1% cash bonus on transfers of $5,000+
  • Receive a 2% cash bonus on transfers of $15,000+
  • Receive a 3% cash bonus on transfers of $50,000 or more

You must sign up for a Lending Club account and enroll in the promotion program first.  New funds must be credited to your Lending Club account by May 31st.  One point in the fine print that I found confusing was if you are allowed to ever withdrawal the bonus, the good news is you can.  I emailed LendingClub and got the following response:

“Once the bonus has been invested into notes you will be able to withdraw the funds as they come back in payments.”

Here is the fine print:

To receive your bonus, all funds must be (1) newly transferred between the date you enrolled in the program (but not earlier than May 2, 2011) and May 31, 2011, (2) continuously maintained in your Lending Club account and (3) fully invested on the Lending Club primary platform market by June 30, 2011 to receive your bonus. Existing account balances and transfers prior to your program enrollment date will not be counted towards satisfaction of the necessary load to earn this bonus. The transferred funds that qualify you for this bonus offering will be locked for investment purposes only and unavailable for withdrawal. You acknowledge and agree that Lending Club reserves the right to withdraw the full original value of the bonus amount delivered to you upon violation of any of these terms. Failure to fully invest the new funds by June 30, 2011 will result in your forfeiture of the bonus amount. Transactions in the secondary market (the trading platform operated in by FolioFN) do not count as “investing funds” or towards unlocking the bonus. This bonus payment is taxable so please consult with your personal tax adviser. You are responsible for any taxes related to this offer. Void where otherwise prohibited. This offer may not be combined with any other offer.

Limit: One bonus per tax ID and a maximum bonus of $7,500 per tax ID. Competitors 2011

[Updated 5/13/2011]

Whether you are interested in using to either lend money or borrow it you may want to understand what other options there are out there.  If you want to read more about my thoughts on go here.  The following is my list of peer-to-peer lending sites.  I am listing this from the point of view of a prospective lender.  I personally have only used and as such I cannot speak to the merits of the other sites listed. Competitors

  • – The closet thing to a US-based competitor to  They have done approximately $240M in loans (about $20M more than Prosper).  What is impressive is that LendingClub has done this in only 4 years (started in 2007), while Prosper has been around since 2006.  This site has a good breakdown of the differences between LendingClub and Prosper.  LendingClub allows larger loans and requires a slightly better credit score.
  • PeerForm – These are the new kids on the block and are still in beta… the beta is “closed” so I am not able to really learn much on what it means to be a lender or “investor” for them.
  • Non-US Based Sites:
  • Kiva – This is like Prosper / LendingClub but focuses on loans to 3rd world nations.  They have funded approximately $204M in loans.  I don’t fully understand the mechanics, but they appear to be a broker that actually manages the relationship with “field offices” that actually manage the loans.  They have metrics on how each field office does.
  • – This is a P2P lending company owned by PayPal.  They are a “competitor” to Kiva and also focus on loans to the poor.  Once nice thing is that their minimum amount invested is $5 less than Kiva.
  • Loanio – This was the 2nd US-based competitor to  It was launched in late 2008 and now apparently is closing down for a quiet period.  Frankly, I don’t see much here to get excited about.

There is another class of service out there that simply manage direct lending.  I haven’t researched any of these yet.  One of them is, they basically act as the middle man so that friends or family can lend money.


This posting is provided “AS IS” with no warranties, and confers no rights.