Wednesday, after my interview with Prosper, I barely had five minutes of rest before I arrived at Lending Club’s headquarters. Arriving at 3:30pm, I was invited by their receptionist to take a seat and wait for Scott Sanborn, Lending Club’s Chief Operating Officer.

Behind her stood the red squared Lending Club logo, cut and illuminated. Next to me on the wall was mounted the infographic they produced when they crossed $1 billion in issued loans (see here). The whole thing felt a bit surreal.

Yesterday I flew to San Francisco to sit and talk with the managements of Lending Club and Prosper. These peer to peer lending companies, the only two in the United States, reside almost next door to each other in the city’s financial district, so visiting both in one day was a refreshingly simple feat.

I had come to visit Prosper for a couple reasons. First, the management was completely new, with a brand new president and CEO, so I was curious how they were differentiating themselves from the previous team. Prosper had run into rough waters last fall, experiencing a dramatic drop in their amount of monthly funded loans. I was hoping to hear an update about the company’s efforts to turn things around, especially since April was marked by refreshing growth in issued loans.

Secondly though, I was really eager to hear Prosper’s response to the recent investment in Lending Club by Google, a $125 million investment that newly valued Lending Club at over $1.5 billion. I did not fully understand what particular benefit Google received by buying a place at Lending Club’s table, and was hoping Prosper could provide that insight.

Unless you are just getting back from vacation, you're probably aware of the big news that Google made a $125 million investment in Lending Club on Thursday. Almost all the major news sites covered this event. The investment (a 7% stake in the company) values Lending Club at a staggering $1.55 billion, and makes the company a likely future hallmark of American finance.

To help newcomers to the lending scene, today's post will review the entire peer to peer lending scene in the US. We will begin with the major platforms, cover the major news sites and blogs, and finish with the available tools and forums.

Let's get started.

Part 1 – Introduction: Risk
Part 2 – Avoiding Defaults
Part 3 – Low-Grade Loans
Part 4 – Combining Risk/Reward

While avoiding bad risk (defaulting loans) might be the main reason we use filters, we also want to consider taking on some good risk – namely in the form of adding some lower grade loans. This is because adding some risk can be really rewarding! Let’s look at an example and do a filtering exercise to discover the potential in riskier low grade loans.

A lack of strategy is one of the most common problems investors face on Lending Club. Once someone has opened an account and transferred funds over from their bank account, it can be confusing to figure out what to do next. This problem is easy to see in the variety of success that different people experience on Lending Club. Some lenders thrive while others lose money. So what is the difference between the two?

Today we will examine seven important strategies the average investor can use to achieve solid returns on Lending Club.

Part 1 – Introduction: Risk
Part 2 – Avoiding Defaults
Part 3 – Low-Grade Loans
Part 4 – Combining Risk/Reward

Unlike a mortgage, peer to peer loans are unsecured. When a borrower fails to pay their loan back (called a default), the lender loses their entire investment. Almost every lender will experience a default eventually, but there are two important ways to soften the blow. First (and most important), we can be diversified in at least 200 loans. Second, we can choose to invest in the highest quality loans available, the loans that have the lowest chance of defaulting.

So which loans are least likely to default?

In part 2 of this filtering series, we will do our best to answer this important question. The reality is, just a little filtering goes a long way in our attempts to avoid defaulting borrowers.

Continued from part 1 & part 2

When I began lending, I enjoyed it for different reasons than I do today. This is why, in this series, I have been referring to it as a "her", because in many ways my relationship with peer to peer lending has matured and changed since it first began. Like a crush, this avenue of online lending began as a thrill. But soon, like a romance, that thrill matured into something like deep respect and admiration, something worthy of commitment.

Here's how it happened.