Comments on: The Pros and Cons of Social Lending http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/ The blog of the free, simple personal finance solution. Track all your spending automatically, find the best deals, save more money. And save the world. Sun, 12 Feb 2012 05:07:51 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: aygonrib http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-48977 aygonrib Wed, 26 May 2010 13:05:10 +0000 http://www.mint.com/blog/?p=6484#comment-48977 To answer the question about categorizing transactions, if it's payments you are receiving on a loan you made through Lending Club then it's probably income. If it is a debt payment then it would be classified as a a debt payment. Hope that helps! Ana To answer the question about categorizing transactions, if it’s payments you are receiving on a loan you made through Lending Club then it’s probably income. If it is a debt payment then it would be classified as a a debt payment.

Hope that helps!

Ana

]]> By: Taylor Braun-Jones http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-48970 Taylor Braun-Jones Wed, 26 May 2010 03:51:48 +0000 http://www.mint.com/blog/?p=6484#comment-48970 I have the same question as Kelly. What is the recommended way of categorizing these transactions? Lending Club (the only social lending site I've tried) sure generates a lot of transactions and mint. is not consistent about how it auto-categorizes them. I have the same question as Kelly. What is the recommended way of categorizing these transactions? Lending Club (the only social lending site I’ve tried) sure generates a lot of transactions and mint. is not consistent about how it auto-categorizes them. ]]> By: Kelly http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-48809 Kelly Wed, 19 May 2010 19:55:50 +0000 http://www.mint.com/blog/?p=6484#comment-48809 How do you recommend categorizing Lending Club transactions in Mint? How do you recommend categorizing Lending Club transactions in Mint? ]]> By: Claire http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44889 Claire Fri, 29 Jan 2010 19:49:53 +0000 http://www.mint.com/blog/?p=6484#comment-44889 This is becoming such a hot topic in the student loan world. I just read an article on social lending a few days ago (http://studentloansforcollege.org/studentloans/online-social-student-loan-lending/). I think mint.com makes such a great point about the part where they state "Also, invest only funds you can do without if you lose all of it, remember this is a numbers game." Many investors can be blind to the fact that this IS a numbers game, and not a SURE bet. The fees charged by each site can make a great deal of difference, and many articles out there will "gloss over" this fact. Another great article from mint.com This is becoming such a hot topic in the student loan world. I just read an article on social lending a few days ago (http://studentloansforcollege.org/studentloans/online-social-student-loan-lending/).

I think mint.com makes such a great point about the part where they state “Also, invest only funds you can do without if you lose all of it, remember this is a numbers game.”

Many investors can be blind to the fact that this IS a numbers game, and not a SURE bet. The fees charged by each site can make a great deal of difference, and many articles out there will “gloss over” this fact. Another great article from mint.com

]]> By: Peter Mueller http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44657 Peter Mueller Tue, 26 Jan 2010 17:43:44 +0000 http://www.mint.com/blog/?p=6484#comment-44657 That is a very interesting article. I might add that there is also some European sites besides ZOPA, so to say www.smava.de in Germany. To my knowledge it is one of the leading sites. I am registered there as a lender and have made a decent return - can recommend it. That is a very interesting article. I might add that there is also some European sites besides ZOPA, so to say http://www.smava.de in Germany. To my knowledge it is one of the leading sites. I am registered there as a lender and have made a decent return – can recommend it. ]]> By: Bob http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44360 Bob Wed, 20 Jan 2010 14:48:05 +0000 http://www.mint.com/blog/?p=6484#comment-44360 "Investors ... can earn on average 9.64% in annualized returns on these P2P loans." Citation needed. Badly. Where are you getting this number? I am a member of Prosper, but I will not be lending any more money there. I have loaned to 6 people, and 2 of them have defaulted. That's a 33% default rate. One was a credit grade "A" and the other a "B". Prosper makes their figures available as XML files. This is great. It means we can crunch the numbers ourselves. I have done so, and found out that 10% of all "AA" grade loans will default. When Prosper advertises money that lenders can make, they include all loans that have been made on the site, even ones that were made last month, and have not had much time to default. Their figures make the assumption that none of these loans will default, which just isn't likely. For my figures, I have only used loans that are at least 1 year old, so that they have had at least some time to default. “Investors … can earn on average 9.64% in annualized returns on these P2P loans.”

Citation needed. Badly. Where are you getting this number?

I am a member of Prosper, but I will not be lending any more money there. I have loaned to 6 people, and 2 of them have defaulted. That’s a 33% default rate. One was a credit grade “A” and the other a “B”.

Prosper makes their figures available as XML files. This is great. It means we can crunch the numbers ourselves. I have done so, and found out that 10% of all “AA” grade loans will default.

When Prosper advertises money that lenders can make, they include all loans that have been made on the site, even ones that were made last month, and have not had much time to default. Their figures make the assumption that none of these loans will default, which just isn’t likely. For my figures, I have only used loans that are at least 1 year old, so that they have had at least some time to default.

]]> By: Michael http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44318 Michael Tue, 19 Jan 2010 08:32:36 +0000 http://www.mint.com/blog/?p=6484#comment-44318 For folks that are looking for a way to formalize and track a person-to-person loan with a family member, friend, or an acquaintance we offer the easiest, fastest, and most flexible tool out there for these types of loans. Come check us out! http://www.lendingkarma.com -Michael For folks that are looking for a way to formalize and track a person-to-person loan with a family member, friend, or an acquaintance we offer the easiest, fastest, and most flexible tool out there for these types of loans. Come check us out!

http://www.lendingkarma.com

-Michael

]]> By: Alesopholus http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44258 Alesopholus Sat, 16 Jan 2010 15:55:57 +0000 http://www.mint.com/blog/?p=6484#comment-44258 I heard thru a friend, that there is a way the Vietnamese-American community lends money to each other. It only works when 100% of the participants are honest. I don't know the exact details but everyone gains, and banks lose out on this business...which doesn't make me feel bad for them at all. Someone should investigate. If we could scale this up, then we could get rid of this cancer on our society known as Bankers on Wall Street. I heard thru a friend, that there is a way the Vietnamese-American community lends money to each other. It only works when 100% of the participants are honest. I don’t know the exact details but everyone gains, and banks lose out on this business…which doesn’t make me feel bad for them at all.

Someone should investigate. If we could scale this up, then we could get rid of this cancer on our society known as Bankers on Wall Street.

]]> By: Derrick Zagorodney http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44234 Derrick Zagorodney Fri, 15 Jan 2010 18:37:03 +0000 http://www.mint.com/blog/?p=6484#comment-44234 I was hesitant to try out social lending, but with a $25 incentive to sign up , and a 250 minimum deposit... I was already up 10%, so i tried it. 4 months later i have 13 notes with 21/21 ontime payments. Nothing that will get you rich over night, but once i see a few notes paid in full to term i'll consider their automatic investing as a type of long term savings. Its an interesting idea, and I much prefer the personal level of investment (helping family w. child medical problems, helping pay off adjustable heloc, etc. etc.) I was hesitant to try out social lending, but with a $25 incentive to sign up , and a 250 minimum deposit… I was already up 10%, so i tried it. 4 months later i have 13 notes with 21/21 ontime payments.

Nothing that will get you rich over night, but once i see a few notes paid in full to term i’ll consider their automatic investing as a type of long term savings. Its an interesting idea, and I much prefer the personal level of investment (helping family w. child medical problems, helping pay off adjustable heloc, etc. etc.)

]]> By: Frank http://www.mint.com/blog/trends/the-pros-and-cons-of-social-lending/comment-page-1/#comment-44153 Frank Wed, 13 Jan 2010 05:19:05 +0000 http://www.mint.com/blog/?p=6484#comment-44153 First I have been a lender with Lending Club since May of 2009, and I love it. I did note one very big inaccuracy with the article: Lending Club charges a 1% fee of the total processed payment.. not the just the interest as stated. Just to make it clear- if you loan out $100 - you will only get back $99 of that money ( plus interest less the 1% fee as well). Still, this beats all banks, credit unions, what-ever.. only the stock market can compete with this type of return. My experience: I have over 60 notes varying from $25 to $75, to date ( knock wood) ZERO defaults or even currently late by any amount. Is that the norm, LC says no, can it be done... obviously yes. I earn about 12.41% yearly which is about 10% per month of my outstanding balance.. so $2000 = $20 per month. As for losing money, remember you can fund as little as $25 per note.. if that borrower defaults the MOST you lose on that note is your $25 ( month one). If I were to suffer a default of an average note... my loss would still be less than what I have made to date. If I had gotten the free $40 being offered now... I could suffer up to 3 defaults before I actually "lost" any of my own money. Sing up for the free money... you cant lose! First I have been a lender with Lending Club since May of 2009, and I love it. I did note one very big inaccuracy with the article: Lending Club charges a 1% fee of the total processed payment.. not the just the interest as stated. Just to make it clear- if you loan out $100 – you will only get back $99 of that money ( plus interest less the 1% fee as well). Still, this beats all banks, credit unions, what-ever.. only the stock market can compete with this type of return.

My experience: I have over 60 notes varying from $25 to $75, to date ( knock wood) ZERO defaults or even currently late by any amount. Is that the norm, LC says no, can it be done… obviously yes. I earn about 12.41% yearly which is about 10% per month of my outstanding balance.. so $2000 = $20 per month. As for losing money, remember you can fund as little as $25 per note.. if that borrower defaults the MOST you lose on that note is your $25 ( month one). If I were to suffer a default of an average note… my loss would still be less than what I have made to date. If I had gotten the free $40 being offered now… I could suffer up to 3 defaults before I actually “lost” any of my own money. Sing up for the free money… you cant lose!

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