I'm not saying you're wrong, but do you have data supporting this statement? I've been interested in peer to peer lending for awhile and this turns me off a bit.
> For example, if you invested $100,000 in lower grade (C-G) notes on Lending Club with an aggregate 12.0% net annualized return, you'd receive approximately $6,000 in cash payments each month.
That just isn't a situation that happens for 99% of people.
Personally, I've seen worse returns and I know a number of other people that feel the way Lending Club came up with these numbers is fudged a bit since almost everyone I know ends up below the median.
The reality is, its returns are reasonably high risk [as you are limited in how many you can invest due to the caps the other guy mentioned] and if you get a bad basket you are screwed.
I'd rather invest in stocks given the real returns for the average person in Lending Club are about the same. Also, literally 0 of its proponents factor in what happens during a major recession [ default rates will skyrocket ] which will make even these modest returns terrible very quickly as loans default.
I've made 8-10% per year (defaults included) for the past 2 years on lending club. There are investment limits based on your income that you legally have to follow. I believe its 5% of your income/assets max. They don't confirm your income/assets but there are regulations related to it.
It also takes work to liquidate quickly. So if not selling notes on a second market you're locked into your investments for up to 5 years.
Thanks for this, didn't know there was a limit. Apparently it's 10% of your net worth [0] and there are other restrictions by state [1]. Which is a shame, because it beats the pants off the stock market.
