$10,000 P2P LendingClub / Prosper Loan Portfolio Update – February 2013

Here’s the 3rd and last piece of the monthly updates for my Beat the Market Experiment, a set of three real money portfolios started on November 1st, 2012. See also my $10,000 Benchmark and $10,000 Speculative portfolio updates for February 2013.

I started with $10,000 split evenly between Prosper Lending and Lending Club, and went to work lending other people money and earning interest with an 8% target net return.

$5,000 LendingClub Loan Portfolio. Below is a screenshot of my LendingClub account as of 2/1/13. Keep in mind that I had loans before, but sold them all on the secondary market and started fresh for this tracking experiment. However, the charged-off loans from that period stayed on my record even though the overall return for my very conservative loan portfolio back then was over 5%.

(click to enlarge)

I now have a total of 194 active and issued loans. I used simple loan criteria based on my LendingClub filters post as well as my Prosper filter research noted below, saving me from having to look through individual loan descriptions. The portfolio is very young, but so far all loans are current (16 days past due is considered late). The current weighted average interest rate is 11.66%, which means I can lose 3.66% to defaults and still net an 8% return.

LendingClub.com account value: $5,113.27 (includes principal + accrued interest, after fees)

$5,000 Prosper.com Loan Portfolio. Below are screenshots of my Prosper account page as of 2/1/13.

I now have a total of 207 loans after activating the free Quick Invest feature which automatically invests in loans that satisfy my preset criteria. I love having my interest re-invested automatically. Again, see my Prosper loan filters post for more details. I now have two loans which are less than 15 days late. The one loan that was less than 15 days late last month, is now current, so I’m not really concerned. According to Prosper, the net annualized return for this portfolio is currently 9.89%.

Prosper.com account value: $5,078.11 (includes principal + accrued interest, after fees)

Total P2P loan value: $10,191.38 (includes principal + accrued interest, after fees)

I know this isn’t necessarily the same as the actual liquid value of the loans, but it’s the best I can do for now. In the future, I plan to assume that any loan past 30 days late will be a full default of all remaining principal.

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