P2P Lending Sites: An Exhaustive Review

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.

Lending Club

lending clubYou 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 Issued Loans 2013

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.

For a Lending Club loan click here.
To become a lender, you can sign up here (note: unavailable in some states).

Prosper

ProsperProsper, 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.

Prosper October Loans

In March, the famous business website Kiplinger rated Prosper as one of the best ways to earn interest in 2013.

For a Prosper loan click here.
To become a lender, you can sign up here (note: unavailable in some states).

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.

Lending Club bloghttp://blog.lendingclub.com/
Prosper bloghttp://blog.prosper.com/

LendAcademy

Lend-AcademyAlmost 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.

http://www.lendacademy.com

Orchard Blog

Orchard PlatformOrchard is a leading voice in the peer to peer lending world. They are launching a platform to help institutional investors analyze and invest well in online loans. Regarding their contribution to the wider internet space, Orchards Blog has been a wonderful source of breakthrough data.

http://www.orchardplatform.com/blog

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.

http://andirog.blogspot.com

Peer & Social Lending by Brian and Ryan

PeerSocialLendingA solid Lending Club blog, brought to you by two avid investors.

http://www.peersociallending.com/

LendingMemo

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

NickelSteamroller

NSRMichael and Rocco’s peer to peer lending statistics and research site continues to be the bread and butter of almost all retail lenders. Their 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. NSR’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 Lending Club’s cumulative growth chart or the monthly originations chart.

http://www.nickelsteamroller.com/

P2P-Picks

P2P-PicksProbably 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.

http://www.p2p-picks.com/

Interest Radar

Interest RadarI 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.

https://www.interestradar.com/

BlueVestment

BlueVestmentI met Nathan at the LendIt conference last month, and was really amazed by the investment tool he is developing.

https://bluevestment.com

Lending Robot

Lending RobotLending Robot is a new investment tool based in Washington State.

https://www.lendingrobot.com/

Peer Lending Server

Peer Lending ServerPeer Lending Server is another peer to peer lending tool (also one I have not personally used).

http://peerlendingserver.com/

P2P Lending Forums

LendAcademy Forum

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.

http://www.lendacademy.com/forum/

Less Active P2P Lending Forums

Prospers.org // Wiseclerk.com // LendingClubTalk.com

Conclusion

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.

[image credit: Wyman Laliberte "1917 Map of Winnipeg" CC-BY 2.0]

Comments

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  1. says

    Thanks Simon. Great article and I appreciate your kind words. I am also amazed at how few sites are dedicated to such a fast growing and interesting asset class. Since I have been covering this space (over 2 1/2 years now) several sites have popped up but almost none have had staying power. Good to see you continuing to work on LendingMemo – I think you are doing a great job here.

  2. Douglas Dolton says

    What about Zopa? It’s the world’s FIRST peer-to-peer operation (March 2005), has the most innovative (in my opinion) business model, and is doing quite well – at least as well as Lending Club, given the size of the UK market vs. the US market.

  3. Ryan Hart says

    You’re right that there are not many sites dedicated to peer to peer lending. One of the major obstacles is increasing awareness about it for both investors and borrowers. None of my non-finance friends had ever heard of p2p lending until I brought it up. It’s easy to forget that it’s not a mainstream concept yet – but that will change soon.

  4. Frugal JLW says

    Thank you for the comprehensive overview! I’ve decided to test the waters beyond my Vanguard and Calvert portfolios with Lending Club and also a newer, smaller site: http://www.joinmosaic.com

    I like Mosaic because it’s an investment in something tangible – a solar installation that should last a few decades. However, I think they’re only available to CA and NY residents right now if you’re not an accredited investor. The other downside is no liquidity. :( Still: it feels so good to know that my profits are coming from the sun!

  5. says

    One new addition to your P2P Lending Tools section above: “Think Fast Suit” http://www.thinkfastsuit.com

    This is a site that automates lending club investing via Lending Club’s API using loan filter rules you configure. The site can help reduce idle cash in your account by evaluating your loan filter rules and submitting investment orders every time Lending Club posts new loans (4 times per day).

  6. says

    I believe that peer lending and investing is long overdue to disrupt and disintermediate traditional banking. People are charged ludicrous interest rates and fees by banks, micro lenders, and loan sharks. South Africa is a typical example. The current personal loan market heavily is overcrowded, and it all makes sense as a typical borrower borrows from one bank to pay his debts at another and so the money keeps circulating with interest and fees being created out of thin air between the two banks. So the more lenders, the more money for all.

    People are in such financial trouble that they cant even put food on the table, but banks just keeps on issuing more debt. Regulators are for one, useless, and two, hands up in the air as we stand on a brink of a recession. Not a single thing is done to apply financial education in our school system and neither by our financial institutions. Thus I believe that in a social connected world, people will care more about each other and could share the responsibility of one’s borrowed or lent money more openly. The transparency in a social network could enforce financial discipline that reduces the risks to peer lending communities. Education is the key to financial awareness and empowerment. On a last note, I’m happy to say that we at https://www.rainfin.com contribute to financial education and empowerment.

    • says

      The elephant in the room that peer to peer lending is not really tuned in to is equity rich, cash poor customers who would gladly do a first lien loan so they can access their home equity.

  7. says

    Still no peer to peer lending for the millions of caregivers who are equity rich but cash poor. Just more of the same stuff, except the bank has been “replaced” by an algorithm.

    • says

      I would argue that equity rich, cash-poor people are not marginalized if their condition still has allowed them a positive credit history. LC/Prosper never ask you how much money you have on hand if you need a loan. All they care about is your creditworthiness, income, and how much you wish to borrow.

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