Last week I made a horrible confession. I am a greedy investor, or more importantly, I WAS a greedy investor when it came to my Lending Club account and investing in peer to peer lending loans. But, I have learned the errors of my ways. I love Lending Club and the idea of earning a great rate of return by investing directly in peer to peer loans of people who need funding and may not otherwise receive it.
So, I’m not giving up on investing in peer to peer lending through Lending Club. I’m trying to be a better loan picker and evaluator. So, here are a few areas that my Lending Club default loans have in common. Maybe by understanding a little more about why these may have defaulted, I can avoid making similar mistakes going forward in the future with new peer to peer loans.
Traits Of My Defaulted Peer To Peer Lending Loans
36 Month Maturities
Every single one of the 12 loans that I have that defaulted have a 36 month length of maturity. This is a little hard to gauge because I started investing in some of these peer to peer loans before Lending Club started offering five year loans.