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. Almost all the major news sites covered this event. The investment (a 7% stake in the company) values Lending Club at $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.
Two American Companies
While we wait for additional companies to launch, there are currently two great options to choose from: Lending Club and Prosper. You can read a comparison of the two at my Lending Club vs. Prosper post.
You cannot mention peer to peer lending without first talking about Lending Club. The lending giant has issued over $3 billion in loans to thousands of borrowers. Each year finds Lending Club more than doubling in size, with an expected IPO for 2014. While Lending Club was the second company to launch, it has by far been the most successful, issuing a record number of loans almost every month for the past four years. Stunning.
Lending Club was founded by its CEO Renaud Laplanche, who recently gave a great interview for LendingMemo. The New York Times recently covered how Google invested $125 million in Lending Club, valuing the company at a staggering $1.55 billion. To learn more about Lending Club, you can read LendingMemo’s extensive review.
Prosper, the first platform launched, continues to be a great alternative to Lending Club. While this company has issued less than a third of Lending Club’s volume, Prosper’s sizable total issued loan amount is nothing to sneeze at. Many lenders, including myself, have earned a better return here than Lending Club. We continue to enjoy the savvy automated investment option that only Prosper has. It makes peer to peer lending a near-passive investment.
P2P News Sites and Blogs
Lending Club and Prosper Blogs
Both the major platforms have blogs available that give great updates on the state of each of their companies. Lending Club communicates a lot about their open data, while Prosper’s blog recently had their new president Aaron Vermut answering great questions from anybody who left a comment.
Almost everybody who is involved in the wider peer to peer lending community has come through the channel of one individual: Peter Renton. Peter’s LendAcademy blog has been the most trusted source of anything involving online lending for years. His approach to lending basics and filtering is how many of us got our start. Week after week, Peter continues to scoop on the very latest p2p lending news.
Random Thoughts Blog by Anil Gupta
Anil is a skilled programmer who has done a great service to the lending community. Hailing from my area of Seattle, Anil was the first person to break the news about Lending Club’s new proprietary grading structure in December, and has helped lenders become aware of the sudden rise in borrowers with a public record in the Lending Club loan pool. He is working on PeerCube, a loan selection tool for Lending Club.
Peer & Social Lending by Brian and Ryan
A solid Lending Club blog, brought to you by two avid investors.
In my cool, considerate, and objective opinion, this is the best one ;). Launched in January of 2013, LendingMemo continues to be a joy for me to work on.
P2P Lending Tools
Michael’s peer to peer lending statistics and research site continues to be the bread and butter of almost all retail lenders. His Portfolio Analyzer lets you upload your Lending Club notes.CSV file for a more realistic measure of the return you are earning on your account. Michael’s Return Forecaster tool is excellent at analyzing the historical loan data to find new filters. Furthermore, there are lots of tools and statistics you can find that help get a picture of the overall p2p lending situation, like the cumulative growth chart here or the monthly originations chart here.
Prosper-Stats is the go-to site for most Prosper lenders. Rocco, the sites creator, has come up with a savvy way to calculate the interest that lenders were earning on their account by downloading the data himself, crunching it offline, and uploading it to a server. Lenders can then pull the historical loan data apart to figure out a better measure of their return while discovering great filters. Prosper-Stats remains a great place to get a feel for what filters work best on the Prosper platform.
Probably the most exciting new arrival in the peer to peer lending community has been Bryce Mason’s creation over at P2P-Picks. Bryce is a skilled statistician in LA who has recently completed a excellent study on peer to peer loan filtering that should be released soon. His site uses the same math that hedge funds use to earn solid returns, but makes this system available to the everyday lender for a nominal fee.
I have not used Rev’s Interest Radar very much, but other lenders profess its usefulness. It can analyze your portfolio, examine Lending Club historical loan history, and even auto-invest/auto-sell loans for you.
I met Nathan at the LendIt conference last month, and was really amazed by the investment tool he is developing.
Peer Lending Server
P2P Lending Forums
Peter’s forum over at Lend Academy remains the most thriving p2p lending forum on the internet, with a wide diverse community of lenders in talks about a multitude of topics. It has sections for both Prosper and Lending Club, as well as all the major tools.
Less Active P2P Lending Forums
It is amazing how many p2p lending sites and tools have launched and disappeared over the years. True, there are a number of financial blogs that cover peer to peer lending throughout the year, but it is amazing how few sites there are solely dedicated to it. This is sure to change in the coming year, as more and more people discover this exciting new asset class.
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[image credit: Wyman Laliberte "1917 Map of Winnipeg" CC-BY 2.0]