So that means LC and Pro are keeping sale proceeds. I have a good size nest egg in here, so even if 10% of the loans fail I’m not concerned. (Ha Ha….) I am not going to make a recommendation between Lending Club or Prosper. However, the number of quality loans on Prosper has declined significantly over the past year. Lending Club launched 18 months later in mid 2007 — on Facebook originally. Compare borrower and investor rates. I’ve invested with Prosper and Lending Club since approximately 2012 and have seen declining returns in both platforms. I would love see other investor’s portfolios as I am always looking for different philosophies and strategies to ponder. This chart is collectively all outstanding loans at each lender, and breaks down performance for each year. For those investors who like P2P lending but don’t want to manage their investments at all, there are “managed account” options at both companies. This Lending Club review, unlike some others, will review the service from both sides of the deal. Make sure to read about my experience below before you invest or borrow with Lending Club. It’s likely these are notes that languished with the wholesale investors that LC has been cultivating recently, and then the rejects are tossed onto the retail platform as “new”. Also, late payments are common. I trust their strategy way more than LC, which seems to be aiming at initiating more and more loans, checking less and less the profiles, at the expense of the investor. Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser. After being invested heavily in Lending Club, I am starting to see flat to negative returns. Something needs to be fixed quickly. Prosper (see my Prosper review) was the first P2P lending company, launched in February 2006. There was one borrower in my Lending Club portfolio who took out a loan for $20,000 and did not make a single payment. N.B: it is worth mentioning that as time goes by, LC is REMOVING investing tools. Never had a problem with Lending Club, though their processing of IRA payments is a bit awkward. Two online P2P companies leading the charge in this revolution are LendingClub and Prosper. However, even with Prosper's one year advantage, Lending Club has managed to facilitate the funding of nearly $20 Billion more to borrowers! Lending Club does a solid job screening applicants; each accepted borrower receives a grade that determines their interest rate based on various risk factors they compile during the application process. This compensation may affect where and how products appear on this website, including, for example, the order in which they may appear within a comparison or review. Lending Club vs Prosper: Who Can Invest? The more invested the less volatility you experience. I currently have 7 (out of 90) loans that are either in default or late. This data is consistent with my returns. When comparing the defaults from all loans that originated in 2010, we can see Lending Club had a lower default rate of 3.2 percent versus Prosper's 5.7 percent, but in 2014, the reverse was true, with Prosper having a lower default rate of 3.6 percent, compared to Lending Club's 8.7 percent (data from Lendstats.com). For some reason, the later acct has been yielding MUCH lower returns than the earlier one. Current ROI over 2 years is meager 3.01%. Statistics are courtesy of LendStats.com. So all in all, I’m becoming seriously disillusioned with Lending Club. It seems to me that LendingClub has a much brighter future. Each month, you receive your return on investment in cash back. The additional states available here are: Alaska, New Mexico, North Carolina, North Dakota and Pennsylvania. Investor Junkie does attempt to take a reasonable and good faith approach to maintain objectivity towards providing referrals that are in the best interest of readers. And I targeted the highest interest rate notes (nothing under 15%), which means that I am, to date, able to generate over 18% ROI with Prosper, which is awesome. With Lending Club you must invest in multiples of $25, whereas Prosper allows any amount of at least $25. My advice is I wish I did the opposite. You can trust the integrity of our balanced, independent financial advice. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. I carefully screened them and only went with high quality borrows who often defaulted.. What a waste of time.. Much better spent on other investment strategies as others suggest. What I am seeing is very different. It’s becoming a waste of time to log on to the site at the designated time to invest new funds. Lending Club vs. Prosper.