I have my Lending Club account set up as an IRA, saves a lot of money every year in taxes. I prefer p2p investing over eREITs but there are so good benefits to both. I currently have about 10% of my money in p2p investing and 20% in real estate but that is split between REITs, crowdfunding property and direct investment.
It’ll be long term. I wanted to start with 10,000 400 loans. What do you suggest? Also I could set it up so the interest goes into an IRA account?
What happens during defaults? I get that you as the lender are kind of boned, but what about collections/ the company itself facilitating the meeting (what is their role?).
Obviously, a basket of smaller loans in various categories would be more apt. to yield returns opposed to 10k to bad credit high yield, but what’s the process here when it does sour? Does the company itself handle the collections agents/process as part of its end of the facilitation or is the lender going to have to make deals with agencies themselves/sell the debt for pennies on the dollar? Default is the risk here, are you left to cross the t’s and dot the i’s on the wild world of law on this or have they managed to make it a drive-thru for you to earn https://americashpaydayloan.com/payday-loans-nj/ their keep of the rate?
Lending Club has a process for collecting on late loans and defaults. They first try to work with the borrower to collect or put them on a payment plan. If the loan goes further into late, it’s passed to a collection agency. This sometimes recovers some of the loan proceeds, about one-in-five loans that reach this stage are recovered.
Or should I do 2,000 80 loans?
- Check your rate on a loan up to $35,000 with terms between three- and five-years. Checking your rate doesn’t affect your credit score. It’s like getting pre-approved for a loan.
While peer-to-peer lending is safe, there will always be people out there waiting to steal your money. One of the most popular articles on the blog is a collection of personal loan scams and warning signs I’ve seen over five years of researching.
Finally there are the bad credit loan sites like PersonalLoans and BadCreditLoans, that will generally approve applications with scores as low as 540 FICO or higher. These lenders know they will see higher defaults on bad credit loans but they make it up through a higher volume of loans, reaching the millions of people shut out because of their credit score.
Or should I do 2,000 80 loans?
- Don’t fill out traditional applications for a loan or credit card. Applying on peer to peer sites won’t hurt your credit but other types of loan applications get reported on your credit and can hurt your score.
I feel your pain Jaymee. Until recently, regulations kept me out of p2p investing in my home state of Iowa.
I just checked and Lending Club investing isn’t open yet in North Carolina but you are allowed to trade peer loans through a Foliofn account. This is where you invest in peer loans you buy from other investors instead of directly funding the loans on Lending Club. The advantage with a Foliofn account is that you can invest in loans with less time until payoff and can even get a better return than the original investor. There is no income minimum to investing in peer loans on Foliofn so you shouldn’t have a problem.
Does this include funds coming out of an ABLE Savings Account for those with disabilities without it jeopardizing their disability benefits as long as their annual contributions and total income caps are within limits?
Hi Joseph! Hope this page is still active! Great feedback and advice. So I have just set up my lending account with lending club invested 1,000$, I see that the minimum to put toward each loan is $25. But I was wanting to invest more to (ideally) get higher return and quicker payouts. I’m still new to this so would like your advice on what do you think about me putting $100 toward 10 loans? Would that be a good strategy starting out, or should I mix up the loan amounts and have smaller loan amounts, so that I can have more loans invested in?
Fantastic questions and answers, I am 57 years old and running behind in my retirement nestegg, have about $200k in my 401k, about $80k in my savings account, about 7 months ago I invested $2k in real estate crowdfunding (fundrise) and another $2k in P2P in lendingclub. After reading this page I realize I should put the returns of P2P into the lendingclub offred IRA, I think I will go with a ROTH IRA, what do you think? how much do you think I shoul dbump my investment in LendingClub and/or eREIT fundrise ? I hate seeing the money in my saving account depreciate every month as the interest in a money market is pathetic.