My Grade E loan paid off this month. So out of 7 loans, 2 were paid off (1 early, 1 on-time), 1 went into default/bankruptcy, and the remaining loans are being paid more or less on time. One loan goes into late status occasionally, but even with the default, I’ve still made money.
People have been making a big stink about peer-to-peer lending and that rates of return have been inflated, but having been on the internet for a long time, I distrust most people and was very conservative about the loans I made. That Grade E loan was an accident that turned out ok. The bad loan was to the divorcee who went into the bankruptcy despite being a homeowner with a steady job.
I guess I’m not upset like other people because I put in less than $300.00 and I treated it like a high risk experiment or like buying a lottery ticket. It was a game just for fun and entertainment, one that’s turned out profitably so far.
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Coudl you explain how are you still up money when one of your loans defaulted? There is a new service coming to Canada that I was very interested in, but even taking out 10 loans at the start and only 1 defaulting I find the math hard to make a profit with (or at least, more than say a GIC)
There are a lot of feedback about peer to peer lending as a very risky business. My thought is that in every investment, there are always an ample amount of risk involve. As long as the investment is measurable, I think there’s still some success in it. Although the question is how much the risk one can take.