Looking for another passive income stream? Look no more! Peer-to-peer lending is another avenue to help your money work for you. Alas, it is mainly an online activity so you must have a way of getting online to access it. Borrowers go to the various peer-to-peer lending websites looking for loans – and better terms than what they can get through their local bank – while investors are looking to lend money at much higher rates of return than what they can get at a bank.
Prosper has been a solid investment for the two years I have been participating in the platform. My returns have been above 7% during most of that time frame.
Lending Club was a solid investment during the first year I invested money on the platform. My returns were above 7% for most of that time. However, in the past 12 months, earnings have taken a hit and are now in the slightly above 2% range. This is due to the widely reported note mispricings by Lending Club. They have since updated their credit model and it looks like their returns have recovered somewhat.
For now, I’m pulling interest and principal out of Lending Club to invest elsewhere for more return on my investment.
If this investment is not for you, then go here to learn more about Worthy Savings Bonds, a more stable investment.