Blog - Peer & Social Lending

Prosper Review: Guide for Investors and Borrowers

December 28, 2015 by John Carson Leave a Comment

Prosper is one of the largest peer to peer lending platforms in the US. Loans of up to $35,000 are available which can be used for many purposes. Investors are able to achieve good returns which are dependent on the credit grade of the borrower.

They can also diversify their investments across credit grades to achieve a balanced portfolio. In this Prosper review we look at the fundamentals of the company and compare it briefly with similar peer to peer lending platforms Lending Club and Zopa, and with Bitbond, a peer to peer bitcoin lending platform.

Ryan has documented his excellent experiences on the platform already, and I urge you to check it out. Below, you will find an updated Prosper review, giving both borrowers and investors some more insights into the mechanics of p2p marketplaces.

A Brief History

When Prosper was launched in 2006 it was a very different market place than it is today. The first peer-to-peer lending site based in the US, from it modest beginnings it has grown almost exponentially, and in July 2015 it passed the landmark of having originated a total of $4 billion in loans.

Given that in its early days the peer to peer lending model represented relatively unchartered waters, it isn’t surprising that it wasn’t all plain sailing, and that the business did make a few errors on the way.

In the early days Prosper used a kind of Dutch auction system where investors would bid on the interest rates they required to finance loans. These left investors vulnerable to defaults as the tendency was for investors to under-price risk, and many early investors lost money; of course the timing was unfortunate given that this coincided with one of the biggest global economic downturns in history.

Even so, many Prosper reviews in the press were highly critical and the overall effect, was to damage the reputation of peer to peer lending generally.

In 2010 Prosper changed their business model. Rather than the interest rates being determined by lenders and borrowers, the business itself set the interest rates based on their assessment of the credit risk of individual loan applicants.

The credit risk is based on the applicant’s credit rating with the rating agencies along with other financial information and any previous borrowing history on the site. Lenders simply choose whether or not to lend at the stated interest rate after reviewing information on the loan applicant.

Investing in Prosper

According to Prosper’s own review on its website, “Prosper provides investors direct, low cost access to high-yield consumer loans from creditworthy borrowers.” What makes prosper different from conventional investment vehicles is that investors can choose their own projected returns based on the risk that they are willing to accept.

As described below, each borrower is assigned a Prosper credit rating, and this is used to determine the interest rate they will be charged. While a borrower with the highest credit grade will be charged an APR of around 6% to 8.7%, a borrower with an average credit rating will be charged around 13% to 15.8%, and a borrower who is considered to be high risk will be charged up to 36%. Interest rates also depend on the loan term and on whether the borrower has any previous history of Prosper loans.

After allowing for defaults, typical returns on a low risk investment are around 5.5%, on an average risk around 11.1%, and on a high risk 10.8%. As we show below, risks to investors reduce as they spread their investments across multiple loans and credit grades. Typical returns made by such investors are between 10.5% to 12%.

Credit rating of borrowers

All new borrowers on Prosper must have a minimum FICO credit rating of 640. Prosper reviews the credit rating and other financial information for the applicant and then calculates the Prosper Rating. Prosper Ratings are broken down into seven categories, with each category being associated with estimates of default rates which are stated as the annual loss rate for that category.

For instance, a Prosper AA rating, the highest possible, has an estimated annual loss rate (EALR) of 1.99% or lower, while a Prosper HR rating (high risk) has an EALR of 15% or higher. The ratings in between these are A, B, C, D, and E.

Fees

Prosper’s revenue is derived from the transaction fees it charges its borrowers and investors. Borrowers are charged a one-off fee of between 1% and 5% of the value of the loan, and investors are charged a service fee of 1% of annual transactions.

Transparency

Along with similar peer to peer lenders Prosper operates a highly transparent system. Investors have a full view of borrowers’ credit data enabling them to develop their own risk adjusted projected return model.

The data includes items such as the credit score, the Prosper Rating, employment status, homeowner status, loan repayment history, occupation, income, credit card utilisation, and more; Prosper reviews at least sixteen levels of credit data. The status of every loan taken out on the site is available to every investor.

Risk

While good returns are available through Prosper, investing in the platform carries a higher degree or risk than investing in a traditional savings account. While there are likely to be some defaults on loans, these are balanced by the higher returns and with a diversified portfolio overall risks of default can be managed.

The chances of failing to make a positive return decrease with increasing diversity. According to Prosper, investors with 400 notes have just a 1.1% chance of making returns of less than 1.1%. This represents a minimum investment of $10,000.

The other risk is that Prosper enters into bankruptcy. Given its level of capital, it isn’t likely, but it remains a possibility. Should it happen then investors receive a degree of protection. All loans and notes are owned by Prosper Funding LLC; a subsidiary of Prosper Marketplace Inc. Prosper Funding LLC is a legal entity that has been approved by the SEC to continue servicing existing loans should the Prosper platform enter bankruptcy.

In other words, the loans are quite separate from the platform. Prosper Marketplace Inc. owns just the IP and the technology, which in the case of bankruptcy would be sold off; the loans would not be involved. However, it would not be possible to issue any new loans. The protection applies equally to individual and corporate investors.

Alternatives to Prosper

There are now many competitive peer to per lending platforms. The best known in the US is Lending Club which recently became a public owned company following its IPO in December 2014. Loans of up to $35,000 are available with a minimum APR of 5.99%. As with Prosper, to invest and borrow you must be resident in the US.

Funding Circle operates in both the UK and US. Specialising in loans to small businesses, it has facilitated over £1 billion of loans in the UK alone. Loans are available from £5,000 up to £1 million. Typical returns for investors are around 70%. Funding Circle only accepts borrowers that are already established and credit worthy; depending on their credit rating interests rates vary from around 6% to 18%.

Zopa was the first peer to peer lending platform which launched in 2004. It is available to investors and borrowers in the UK. Loans are available from between £1,000 and £25,000 with interest rates starting at just 3.9%. Investors can choose average projected returns of between 3.8% and 5.0% after defaults.

Bitbond is a different kind of peer to peer lending platform in that it deals in bitcoins rather than currencies, however the value of its bitcoin loans and investments are tied to the dollar. The use of bitcoins means that loans are completely independent of banks and are not restricted to specific countries or states. Fees are cheaper than Prosper - lenders pay no fees at all compared to Prosper lender fees of 1%, borrowers pay just 0.5% to 3% compared to the 1.1 to 5% charged by Prosper.

Prosper review conclusion

Peer to peer lending has changed the way in which we are able to borrow money and is providing an exciting new opportunity for investors. In this Prosper review we have glimpsed at the history of the company from its origins to the present time and the advantages that if offers both lenders and borrowers have been highlighted.

There are many alternatives to Prosper; we have mentioned just a few of them, in particular Lending Club which is the other main platform in the US, Funding Circle which operates in both the UK and US, Zopa which is based in the UK, and Bitbond which provides an alternative peer to peer cross-border lending model based on cryptocurrency. This article is for your information only, and should not be considered as investment advice.

Bitcoin Lending Report On Bitbond - December

December 4, 2015 by John Carson Leave a Comment

Welcome to part 4 of our cryptocurrency adventure. This month’s bitcoin lending report should be short and sweet and will cover my new investments, as well as my first returns. If this is your first monthly report, follow the links to find out about my investment strategy on Bitbond and why I am using a bitcoin lending platform to begin with.

Without further ado, let’s have a look at my new investments for December:

Loan Listings	Investments (BTC/USD)
All Time Total =	0.96/377
https://www.bitbond.com/listings/2QFZDR4Y7Z	0.02/7.21
https://www.bitbond.com/listings/2QKTTR4YE9	0.10/36.06
https://www.bitbond.com/listings/2QNGJ04YHQ	0.04/14.42
https://www.bitbond.com/listings/2QQ5WX4YP0	0.02/7.21
https://www.bitbond.com/listings/2PPSB84X1R	0.09/32.45
December Total =	0.27/97.36

The first thing I should comment on, is the sum of bitcoins I have invested in two of these loans. In previous months I have tried to avoid lending more than 0.02 BTC to any single loan, in order to invest in as many projects as possible and subsequently spread risk. This has the advantage of mitigating the harmful effects of any defaulted loans. The two listings mentioned here were very well suited to my investment strategy however, which is why I decided to break with my normal investment pattern. These two borrowers fit perfectly into my strategy for the following reasons:

Both are eBay power sellers. One with over 1k and the other with 4k positive feedback
Both wrote a detailed loan description, explaining that the loan was to be used to grow their eBay business
Both have satisfactory income, meaning that their businesses are already doing well
Both are USD denominated loans

There are plenty of other smaller signals which made me lend to these borrowers, but these 4 points are the ones that swayed me.

With this in mind, here is my up-to-date investment portfolio:

As you can see, my portfolio now includes 16 loans, spread nicely across currencies and medium-to-high risk credit ratings. My expected internal rate of return (IRR) for bitcoin denominated loans is 27.77% while US dollar denominated loans have an expected IRR of just over 19%. I believe that the IRR on Bitbond is calculated independently of probable defaults, so it is fair to assume that a few of these borrowers will fall through, bringing my IRR down in the process. That being said, if I end up making a close-to or above double-digit return I will be very happy.

I should also mention that 4 of these loans are still in funding, meaning that they might fail to receive the 60% necessary for the pay out and fall through. In that case I will receive my bitcoins back and re-invest them on the platform. The 4 bitcoin loans categorised as “current” have been fully funded and 3 of which have begun to repay. Here you can see my dashboard:

The fourth loan is currently in a grace period and I am hopeful that he will repay in the coming days. Looking at the loan, we can see that he otherwise has a solid repayment history, which is why I am confident he will repay in time.

Stupidly, I invested around 0.15 BTC in this bitcoin loan which is way above the threshold I set myself at the beginning. Interestingly, the three borrowers who repaid on time, all have significant eBay accounts connected, whereas the late borrower does not. This is a good portent for the vast majority of my bitcoin investments on Bitbond, as they validate my lending strategy, highlighting the importance of high-quality eBay accounts.

Ending December’s report on a high note, the bitcoin interest I received is significantly more than I could have hoped for when I placed the investment. This is due to the meteoric increase in bitcoin’s price since I placed the bids. Specifically, the value of my bitcoin investments in october, when I placed the bids for which I am now receiving interest, was 0.45 BTC or around $117.90. On the 1st of December, when I received my repayment, the value of 0.45 BTC had grown to $162.26, bringing up the value of my received interest significantly.

Now, I completely understand that the price of bitcoin is volatile and a price crash might see the value of my bitcoin returns come back down, but that is why I have diversified my Bitbond lending portfolio to include a healthy mixture of currencies.

Bitcoin Lending Report - Conclusion

I have to say that in total I am very happy with my experience on Bitbond so far. Receiving my first interest is reassuring and I am now confident that I can make significant earnings if I stick to my investment strategy. Connected and high quality ebay accounts seem to be a good indication of a borrowers ability to repay, as shown by the interest I have received already. Further, I need to remember to keep my investments in individual loans around the 0.02 BTC mark, and only lend more if the borrowers show themselves to be the perfect fit, as two did this month.

Overall, I am excited to see what the future holds for my bitcoin investments. Let me know what your thoughts on bitcoin lending are, and merry Christmas.

Peer to Peer Lending in Europe - The Coming Gold Rush

November 13, 2015 by John Carson Leave a Comment

Peer to Peer Lending In Europe has certainly picked up recently, with a surge in new companies popping up left, right and centre. With this comes competition, changes in interest rates, a variety of opinion over which company is the best to go with.

Many investors in the US are somewhat unaware of the market in Europe, despite some fascinating developments over the pond - the beginnings of a p2p lending gold rush!

Average annual net return on investments

in the US, companies such as Lending Club and Prosper often love to boast and claim to have the most superior return rates for lenders. However, when reviewing statistics across the pond and beyond it is clear to see they might be wrong.

Now, Prosper’s returns range depending on the risk factors of the different investments that they offer, but the lowest risk nets you on average 5.48% and the highest risk option usually returns 8.76%. Lending Club’s average ROI also differs by the grade of investment, but the lowest risk option returns less than Prosper: an average of 5.22% whereas the second highest risk option has been returning an average of 9.5%.

In comparison with European Peer to Peer Lending platforms such as Bondora, the US platforms do not look so high and mighty. Bondora claim to have a staggering average annual return rate of 18.44% which is far higher than the other European Peer to Peer Lending platforms such as AuxMoney which claim a return rate of 6.70% and RateSetter which boast a return rate of 3.7%.

Even still that means AuxMoney and Bondora both offer far better rates than the US companies, while RateSetter still offers a slightly competitive rate - this proves that anyone standing by the US’s unconquerable rates is at the very least, deluded.

So you might be thinking well that does not settle it, what if companies such as Prosper and Lending Club have a larger congregation of customers - having more would mean chance for things to go wrong and average rates to drop. Well, Bondora only have 240,000 customers - now rising very rapidly as you’d expect but Auxmoney and RateSetter both have over a million customers each as does Lending Club.

Now admittedly, Prosper have 2,000,000 customers - that is more than any of the European platforms… However, in March 2013 Bondora averaged a return rate of 17% when they only had 15,000 customers - so the simple correlation argument that more customers will result in lower rates is in fact false. It is the quality of the borrowers, the types of investments the company is making that will provide the best return rates and based on that alone you cannot argue with the fact that Bondora is a more profitable investment than Prosper or Lending Club.

All in all, both Peer to Peer Lending in Europe and in the US have some great average annual return rates to boast about, however Bondora is definitely worth taking a look at if you’re looking for the best rate.

Default Rates

Default rates is definitely something you will want to take a look at when comparing the top peer to peer lending firms, now if you are a P2P investor in the US you have undoubtedly also heard about the minimal default rates Prosper and Lending Club boast about. Prosper do have a very impressive statistic they often wave in people’s faces, their borrowers average credit score is very high, coming in at 700!

Now both Lending Club and Prosper roughly achieve a 5% default rate but believe it or not, Bondora’s low risk option comes with an average default rate of just 1.62% despite the high return rates!

Now again, Bondora seem to be hitting the ball out of the park here but it’s not just them that are winning the default battle for team EU! No, AuxMoney has an average default rate of 3.5%, roughly 1.5% lower than both Prosper and Lending Club while RateSetter came through 2014 with 1.79% and this year so far have an amazing rate of just 0.48%. An incredible statistic for RateSetter to try and maintain.

At this point in my analysis, I have to say the US firms are looking quite feeble standing against the EU firms. Peer to Peer Lending in Europe is taking off, and it’s looking like it’s going to be a safe flight for most! RateSetter doesn’t look so small now either, sure they have a lower average return of income than any of the others firms I have mentioned but if they maintain a default rate of 0.48%, it’s certainly sounds so much more appetizing than fairly average rates and a 5% default rate!

Fees and insurance

Of course it’s definitely worth taking a look at the fees and whether or not the companies offer insurance.

Now this is beginning to form a bit of a trend here, Prosper and Lending Club again advertise the fact that they only take servicing fees of just 1% - and yeah that is low, it sounds fair. Well RateSetter charge no fees to lenders. Bondora charge no fees except just €0.38 on withdrawals from your account. AuxMoney only charge a lender’s fee of 1% of the amount for each bid that is successful.

I find it hard to believe that you have read the last few sections of this article and are not thinking it’s a 3-0 victory to Europe in this Peer to Peer Lending battle.

EU vs US Summary

European firms offer better return rates across the board when taking into account the shocking default rates offered by the US firms, not to mention Bondora’s ROI which blows everything else out of the water and sky high. The only thing left to really consider is fees which of course again, you’d rather not pay a fee so this is a no brainer.

Europe triumphs over US when it comes to Peer to Peer Lending, more and more people are realising this and soon all of the customer’s will be going to the EU - get in now while you can take advantage of rates companies like Bondora are offering rather than wasting your time with Prosper.

Banks beginning to run and hide, popularity on the rise

We can actually already see banks worrying, Metro have been lucky enough to strike a deal with Zopa in an aim to take on the big high street banks (Metro being a fairly new bank). Lots of the big Peer to Peer Lending companies are also investing a lot of their money into expanding their businesses, this can only fill people with more confidence in the new system as quite clearly it is doing well.

What this means is popularity of the Peer to Peer Lending in Europe is about to rise dramatically, along with the new ISA scheme, the market is going to be much much busier - there will be more people hearing of P2P lending that will want to borrow too!

A deep seeded hatred for banks and bankers has been planted for a long time within the UK and other parts of Europe - people are waking up and seeing Peer to Peer Lending as a way to defeat them at last and take what is rightfully theirs.

If you need a quick reminder of why you are better off Peer to Peer Lending in Europe than investing your money into a regular savings account, take a quick gander at this table (courtesy of www.moneysavingexpert.com):

	Easy Access	3-Year Fix	5-Year Fix
Regular Savings	1.61%	2.7%	3.05%
Peer to Peer Lending	3.5%	4.8%	5.9%

The P2P Lending rates shown in the above table have all been taken directly from RateSetter (Bondora would obviously be far higher).

Why is Peer to Peer Lending in Europe the coming gold rush?

As explained throughout this article, P2P Lending in Europe is far superior when stood against high street banks and the US companies. There’s a high chance if you are in the US and a P2P investor you have read this and are now considering jumping over, it’s simply a matter of this information not circulating yet.

More and more people are going to get a whiff of this new area of opportunity, banks are going to begin providing higher return rates to compete so even the ones playing it safe will earn more money through this period.

People looking for loans for small businesses will understand they will have better odds going to a P2P Lending company than a bank and will also more than likely be granted a better rate and anyone looking for a sound investment promising a good return with minimal risk is going to be coming straight to the European firms! Everyone is going to benefit from this situation except the banks and bankers which I’m sure will be ok so do not worry too much about them.

Social Lending for Bad Credit

November 3, 2015 by John Carson Leave a Comment

People with bad credit ratings find it hard to borrow money from conventional lenders such as banks. Subsequently many turn to expensive lenders such as pay day loans companies when they need a loan, generally at extortionate interest rates. However, over recent years social lending or peer to peer lending has developed from a single company founded in 2005 to a worldwide phenomenon.

Some of the advantages of social lending are lower interest rates for borrowers and higher returns for investors than they would obtain through banks. Importantly, to borrow from a social lending platform you don’t need an impeccable credit history.

Here we will focus on social lending for bad credit, looking first at conventional peer-to-peer lending platforms. While these will lend to much riskier borrowers than the banks, they too have limits. These are determined by default rates, bad loans that aren’t repaid on time, which are a measure of the risk to lenders. Such platforms have other constraints too, which we will also look at.

More recently a different kind of social lending platform has emerged. This is based on the cryptocurrency bitcoin. Bitcoin lending and borrowing can happen without the need for a bank, which creates whole new lending opportunities. Bitcoin lending platforms treat credit ratings in an entirely different way and thus offer new opportunities for social lending for bad credit. We will look at how this works.

What is bad credit?

Before we examine social lending for bad credit, we first must define what we mean by bad credit. If you do a personal credit report with a company such as Equifax, you will be provided with a detailed breakdown of your financial history over several years. You will also be given a numerical value on a scale that shows where you stand compared with the rest of the population.

Scores range from 0 through to 600 in the UK; those with scores of 467 and over are considered to have an excellent credit rating and should have no problems borrowing from any bank of financial institution. With that in mind, the average score in the UK is around 390 and although it can be considered risky, people should still be able to borrow money though not at the best available rates.

People with scores below 366 are considered to be high risk, and conventional borrowing is likely to be extremely difficult and if available then only at high interest rates, for instance pay-day loans. Note that the figures here relate to Equifax. Other credit agencies use different scales, for instance Experian and Call Credit scores range from 0 to 999 with any score below 720 considered poor.

In the US Experian scores citizens between 330 and 830. Interestingly, Minnesota has the highest average credit rating, scoring 718 on average. This is in contrast to the southern states which typically score lower on the credit rating scale. The average credit rating the US is 687.

While credit rating is important for people wishing to take out a personal unsecured loan with a bank, many more investors and platforms are willing to provide social lending for bad credit. But that doesn’t mean anybody with bad credit will be successful in obtaining a social loan. Most major peer-to-peer platforms will reject loan applicants with particularly bad credit.

Social lending for bad credit isn’t available on Lending Club for applicants with a credit rating below 660 (Experian) and the minimum credit score on Prosper and Upstart is 640. Some smaller platforms will lend to applicants with lower credit scores, possibly as low as 600, but that almost certainly is the lowest that any conventional platform will consider.

Funding for people with bad credit isn’t just a matter of loan availability. The cost of the loan is an important consideration, and there is huge variability. While typical good credit social lending interest rates are between 5% and 6%, social lending for bad credit rates can be as high as 35%.

Default rates

From an investors point of view, the key metric of concern is the default rate. In general, there is an expectation of direct correlation between default rates and the credit rating policy of the lender. Clearly a lender who is willing to lend to people and businesses with bad credit is likely to experience higher default rates.

When a borrower defaults it is the investor who takes the hit, as the overall returns that can be expected are reduced. So if P2P lenders such as Lending Club and Prosper are willing to accept borrowers with relatively poor credit ratings should investors in these platforms be concerned?

It is instructive to look at the default rate at these platforms and how they have varied over the years. Lending Club’s default rates in its early years from 2007 were quite high, but by 2010 they had come down from a high of 14% to just 2.8%.

In 2012 Lending Club changed its policy regarding credit ratings. It lowered the average credit rating of borrowers and increased to average cost of loans by 2%. This had a small but noticeable impact on defaults. Overall the result was increased average yield for their investors. Since then default rates have continued to fall. In 2013 they were 3.6% and in 2014 they were 2.8%.

Default rates at Prosper haven’t tracked those at Lending Club, primarily because of their different strategies in terms of average credit risk and interest rates in the early days, however, their lending policies are now similar as are their default rates and lender yields.

There is a clear correlation between the default rate on credit cards, the economy and changes in employment levels, and the levels of risk have been modelled extensively. While there isn’t sufficient data to demonstrate the same levels of precision with peer to peer lending platforms, there is every reason to suppose that they are similarly correlated, and that the default rates would tend to increase should the economy take a significant downturn.

However as long as the returns remain attractive, social lending for bad credit continues to offer investors overall value.

Bitcoin lending for bad credit

As already mentioned, bitcoin social lending is a new model of peer-to-peer lending that replaces conventional currency loans with bitcoin loans. Banks are no longer required, and the fees charged are considerably lower. Some bitcoin lending platforms focus on business loans while others are experts in pay day loans.

Bitcoin lending platforms treat credit risk far more flexibly than conventional social lending platforms. As bitcoins can be traded without restriction across international boundaries, loans can be made to a wide range of borrowers including those that live in regions that don’t have the luxury of credit rating agencies.

So how do p2p bitcoin lending companies that operate globally assess the credit rating of borrowers? They will use the credit rating scores when available, but in many cases it isn’t. For borrowers who don’t have a rating, these newcomers to the p2p lending industry build a rating for each applicant based on a range of factors.

Identity and address are established using passport, driving licence, utility and phone bills; employment status and income is verified through payslips or bank statements; and any online activity such as eBay and PayPal that reflects the way they handle finance is examined. Additionally, borrowers are also able to build a higher rating by developing an excellent loan repayment history, just like on Lending Club and Prosper.

Thus bitcoin lending platforms can provide social lending for bad credit and to borrowers who have no official credit history at all, yet at the same time minimise the risk of default. They assign a credit rating to each loan applicant. The ratings range from A to F and the interest rate payable varies from around 8% for an A credit rating through to around 30% for an F rating.

From a borrower’s viewpoint, although the higher interest rates might seem high from a local perspective, often they are considerably lower than those prevailing currently in the region where the borrower lives. In many cases they are the only loans that are available to the borrower. From an investors viewpoint, the interest rates provide excellent returns that mitigate the additional risks.

Finally

If you are an investor seeking an opportunity to lend to a borrower in order to generate a far better return than you could hope to get from a bank or financial institution, then social lending provides exciting opportunities. Social lending platforms such as Lending Club and Prosper would appear to have honed their policies regarding client credit ratings and interest rates in order to offer their investors good returns without the need to expose themselves to undue risk.

Bitcoin social lending for bad credit presents an alternative model, which has risks and opportunities attached. For investors who want to diversify globally, it may well be an interesting alternative. But for those sceptical of the higher risk, it will be worth sticking to the conventional domestic p2 lending platforms.

Investing in My First P2P Bitcoin Loan On Bitbond Pt3

November 2, 2015 by John Carson Leave a Comment

Welcome to part three of my p2p bitcoin lending adventure. In this part I will update you on some of my previous investments as well as clue you in on how I spent this month’s €100.

Before we have a detailed look at my portfolio let’s re-cap on the investment strategy I am following. This should allow you to understand the motivation behind my investments more clearly, and might give you some ideas for your own investment strategy.

Important factors I consider:

Connected and credible eBay account
Small business loans
Clean repayment history
Diversification across currencies, loan terms, regions of the world, and loan amounts
Medium-to-high credit risk investment portfolio. Meaning B to E ratings.
Informative loan description
I do not invest in businesses I don’t understand

For a more detailed approach, please check out part 2.

I should add, that some of my investments might only fit a majority of these criteria and not all.

Now that the standards I set are clear, here is the list of loans I invested in this month:

Loan Listings	Investment (BTC/USD)
https://www.bitbond.com/listings/2MPGMW4T7M	0.1/33
https://www.bitbond.com/listings/2M045T4SBQ	0.02/6.60
https://www.bitbond.com/listings/2MDBH04SWD	0.02/6.60
https://www.bitbond.com/listings/2MRYED4TBT	0.02/6.60
https://www.bitbond.com/listings/2MSAT74TCX	0.05/16.60
https://www.bitbond.com/listings/2MRN204TB2	0.05/16.60
Total =	0.26/86.30

As you can see I have fallen a little short of the €100 this month. This is mainly because two loans I lent to were not fully funded, and my investments were returned back to me. I will keep looking for suitable alternative loan listings in the coming days to spend my remaining bitcoins.

My Portfolio So Far: Investing In My 10th Bitcoin Loan

With that under our belt, let’s have a look at my portfolio summary as of 2nd of November. (Click the image for a better view)

As you can see I have invested in 10 loans so far with an expected internal rate of return of 17.66% and 13.05% for my bitcoin and dollar denominated loans respectively. I am not sure what my actual IRR will be but I’m intrigued to see what it turns out as, especially after one or two almost inevitable defaults.

To shield myself from the potentially catastrophic effects of defaults, I have diversified as much as possible within my given parameters. Below you can see a screenshot of my investments, showing you my diversification (Click the image for a better view):

For my next round of investments, I will keep in mind to favour dollar denominated loans, as my portfolio is a little bitcoin heavy at the moment.

From the screenshot given above, you will also be able to see that a number of my loans have not been funded yet. This is because, as with most p2p lending platforms I am aware of, loan requests on Bitbond are active for a predetermined period, giving investors time to acknowledge and invest in them. In Bitbond’s case, the period is 14 days.

Due to the differing funding dates, the repayment schedule is a little difficult to follow. Below I have included a screenshot of the repayments history for my first funded loan. (Click the image for a better view)

Under the Outstanding Principal column you can see the value of the loan that was funded. In this case, the loan was 5 bitcoin (btc). At today’s prices, this converts to around $1670.

The Total Payment column indicates my investment in the loan. In this case it was 0.15 btc which was around €35 or $38 at the time of investment. Adding the Interest Payment to the Principal Payment gives us my total repayment which is 0.16 btc. By today’s prices, this would convert to €48 or $53 giving me 37% return on investment.

This highlights the great opportunities and risk associated with bitcoin investments. The earnings can potentially be huge, but the borrowers ability to repay may be compromised.

That being said, the risks of bitcoin denominated loans are clear from the outset and I trust borrowers to inform themselves prior to taking out a sizeable amount of money.

I am looking forward to seeing how my bitcoin denominated loans play out.

I will update again next month with a summary of my new investments. Please let me know in the comments below what you think of this series, and ask me any questions I might have failed to answer so far.

P2P Lending ~ The FED Anitdote

October 28, 2015 by John Carson Leave a Comment

Interest Rates Are Set To Be Zero Forever - Thankfully P2P Lending Provides a Good Rate of Return by Haven Investor.

At the end of last month, following the September 2015 Fed Committee meeting, Janet Yellen - the Fed Governor admitted to reporters that it is not impossible that the Fed might hold interest rates at zero forever within the USA, where they have been for the last 7 years since the emergency measures were put in place during the height of the financial crisis back in 2008. Japan has been living with zero interest rates since 1990 since their debt bubble popped over 25 years ago.

Meanwhile, the United Kingdom and European Union have also been living on zero interest rates since 2008 with no serious intention to raise them anytime soon. In fact, within the European continent the problem is even more serious with an ongoing battle against deflation taking place with countries such as Sweden now having negative interest rates imposed on their population, therefore the SAVER effectively take a LOSS EVERY YEAR with the bank by holding their money in their account.

The central banks of the world have decided to declare war on prudent savers for the benefit of the risk takers who get into too much debt they cannot hope to pay back. Luckily for savers, there is now a new and exciting alternative to a traditional savings account that can generate a high yielding, low risk source of income - that alternative is: Peer to Peer Lending.

What is Peer to Peer Lending? Peer to Peer (P2P) lending, in a nutshell, is individuals lending money to other individuals or businesses without a banking acting as an intermediary between the two parties. The majority of P2P lending is now done online on a marketplace platform where a borrower by providing their credit information can seek a loan from many anonymous investors.

On most platforms, an auction takes place and dependent on the borrowers details the investors bid to lend money at a particular interest rate, with the average final rate being set for the borrower. As the industry continues to grow, there are now many types of loans available for individuals, small to medium businesses, property developers and now even using the digital currency Bitcoin.

Benefits of Peer to Peer Lending for the Investors? The most important benefit is the good annualised rate of return, dependent of the level of risk - with a yield of 5% for the lowest risk to 15% for the higher risk customers. Compared to a typical bank account yield of less than 1%, peer to peer lending provides a viable alternative for growing your earned savings.

Also, it provides further diversification of your investment portfolio from traditional equities and bonds. Whilst at the same time, contributing to the growth of an economy by funding businesses or individuals.

How to Invest in Peer to Peer Lending? It depends on your country of residency and level of experience as an investor. If you are a first time investor in Peer to Peer Lending - we recommend starting with the largest and more established platforms first.

For investors based in the USA, we recommend Lending Club or Prosper. For investors based in the UK, we recommend Funding Circle, Zopa and Ratesetter. To access a global marketplace for wide selection of peer to peer lenders in every major country across the world, visit www.haveninvestor.com

Tips for Investing Successfully With Peer to Peer Lending

Once you found the right peer to peer lending platform for your level of risk and you are ready to invest - we recommend the following tips to increase your level of return whilst reducing your risk.

Spread your investment over as many loans & peer to peer platforms as possible – to limit the risk of defaults
Make sure you do your research – understand the processes, ensure you are comfortable with the risk
Reinvest your returns – avoid your returns sitting idle and not earning any interest
Optimise the automation tools within the peer to peer to invest & reinvest in loans automatically – to save time.

Written by Haven Investor. The Global Online Marketplace for Alternative Finance & Offshore Strategies

Investing In My First P2P Bitcoin Loan On Bitbond (Pt2)

October 12, 2015 by John Carson 4 Comments

Please note that this is not investment advice.

So, as announced last month, I will be trying out the peer to peer lending platform Bitbond and will be writing about my experiences on this blog. The positives, the negatives and the room for improvement will all be discussed here.

Initially I will only invest €100 (฿0.454 as of October 12th 2015) in handpicked p2p bitcoin loans, following up with another €100 every month. This will allow me to build up a respectably diversified portfolio, but still gives me the time I need to learn from my mistakes. I will tell you my investment strategy later on so you can follow developments and hopefully learn from the mistakes I make, as well as pitch in with your own investment strategy in the comments. All the great interest rates and dreadful defaults will be recorded on this blog.

Buying Bitcoin For My First P2P Bitcoin Loan

So let’s get started. Before we can invest, we need to get our hands on some of the digital currency. The ease of doing this depends on your location, although it is relatively simple to do anywhere in the world. I am currently based in Europe and luckily they (Bitbond) just rolled out their newest feature; allowing users with EU bank accounts to buy bitcoin on Bitbond itself, without the need to register with an exchange.

I’ve included screenshots of my progress all along this post, so you can get a feel for Bitbond and see if p2p bitcoin investments might interest you. Below is the welcome page of the Bit4Coin integration which allows you to buy bitcoin on Bitbond if you are in Europe (including the UK).

The process is pretty self-explanatory, I just had to type in the usual basic information about my personal and bank information. It’s worth touching on the second step, which is the identity verification part, as it actually doesn’t involve the uploading of any scanned documentation or such like.

Instead it is a live video session with an english speaking security assistant who asked me to hold up my ID and input a tan number he sent to my phone. Interesting stuff.

If you are not located in Europe (and I know a lot of you are in the US, Australia, New Zealand etc), you will need to find an exchange or marketplace that services your region.

Below, I briefly outline the best way for you to get bitcoin quickly. I am by no means an expert here, but Bitbond have a guide, which helped me get an overview for the non-european readers.

For most of you, Coinbase seems like the best option for acquiring your first bitcoin. I signed in and purchased some, in order to go through the experience, and can highly recommend them. The signup process is pretty simple, and the navigation afterwards is easy. If you have difficulties with signing up, check out the support documentation for detailed help.

If Coinbase is not an option for you, have a look at Local Bitcoins. They service most areas in the world and tend to offer decent pricing from what I have read. I have not used the platform personally however, so let me know what you think in the comments below.

Once you have bitcoins on your Coinbase or Local Bitcoins wallet, simply transfer them to your Bitbond account by scanning in your QR code, or entering your Bitbond wallet address in manually.

Right, now that the basic stuff is out of the way, let’s get investing.

What is my investment strategy on Bitbond?

So first off, I think it’s really important to have an investment strategy. Blindly following my gut feeling has never worked for me, both on p2p lending platforms and in real life. Setting clear investment parameters obviously depends on the information available to you.

In Bitbond’s case, the amount of data is quite impressive. Going to their statistics page, we can download a CSV file containing their entire p2p bitcoin loan history. Importing this into Google Sheets, we can manipulate the Data and see which investment strategy would have worked best in the past, giving us insights into what will work in the future.

Below you can see a screenshot of the CSV file. (I have made it a Media File, so you can click on it and see it in its original size, in case it’s too small for you at present)

Some columns have been cut out for size and visibility reasons but here is a list of all the factors included in the CSV which will be available to us:

Loan Identifier
Nominal Interest
Term
Purpose
Project Description
Borrower Identifier
Borrower Rating
Employment
Region
Facebook
Twitter
PayPal
eBay
LinkedIn
Publishing Date
Funding Date
Status
Amount Requested
Amount Funded

Despite the long list there is some important information missing in my opinion, such as the name, an image and a relevant email address, so I can contact the borrower before commiting any bitcoins. I understand that giving out email addresses can be a thorny matter so I don’t hold that against them. However, the name in particular, is usually an important factor in my p2p investments because I like to be able to do some background checks of my own on prospective investments. This would usually include, checking Facebook Groups for scam alerts related to this name, doing a google search and seeing what comes up, as well as checking them out on LinkedIn, to see their professional credentials for myself.

Further, an image helps me, because over the years I have become better than most in identifying stock or stolen photos. Overly attractive people smiling into the camera, or low baseball caps and sunglasses tend to be reliable red flags in my opinion.

Using Data to Devise An Investment Strategy On Bitbond

Nevertheless, with this Data we can start to sculpt our ideal portfolio from scratch. In order to do so, we need to write out our motivations behind investing in the first place. For me, I would like to make high returns while investing in small business owners from around the world. Thus, I will be looking for borrowers who have connected their eBay account, and have indicated “Working Capital” as the purpose of their p2p bitcoin loan.

Borrowers with a Credit Rating ranging from B to E will be considered in order to insure high yields, despite the probably higher default rate. The loan and payment history also play important roles in my strategy, as borrowers with overdue loans are regarded as untrustworthy and will be ignored.

Other factors I will be scrutinising include the Loan Description and the Industry in which the borrower is active. If I have little-to-no knowledge about the industry, or the Loan Description is sloppy or too short, I will not invest. Preferably, borrowers will already have repaid a loan on Bitbond, but I am flexible on this point.

With the cornerstones of my lending strategy in place, I will insure diversity in most other factors across my investments. The location, interest rates, the denomination of the loan, employment, size and period of the loan, the number of twitter followers or Facebook friends a prospective borrower has, should vary across my investments in order to ensure maximum possible diversity in my portfolio. This is important, because sudden macroeconomic effects for example, can radically change an entire regions repayment rate. Thus, I protect myself by diversifying as much as possible around my basic investment principles.

Now that we have our strategy in place, we can have a look at the p2p bitocin loan listings to start finding the best borrowers. The first borrower I checked out seemed a good fit already.

As you can see from the screenshot, this listing falls in line very nicely with my investment principles, so I decided to place a bid of BTC0.15 or €32.72.

To place a bid, all you have to do is press the orange button and enter a value of your choice. Be sure to have bitcoin exchange rate site open so you know exactly how much money you are investing in bitcoins.

Once I had placed my first bid, I sifted through a large number of other listings until I had found three more, bringing my total to four, for now. Below I have linked to their listings pages, so you can check them out and understand what’s happening

https://www.bitbond.com/listings/2KAPFH4RGF invested = BTC0.15
https://www.bitbond.com/listings/2K0SAW4R1Z invested = BTC0.15
https://www.bitbond.com/listings/2KCEN64RJJ invested = BTC0.05
https://www.bitbond.com/listings/2JM63P4QDZ invested = BTC0.1

I picked these borrowers because they fit my investment strategy, I like their loan descriptions, and I believe their credentials. Their credit ratings vary, the highest being a B, and the lowest a D, as do their locations and social media connections. This is perfect for my goal of diversifying as much as possible, and hopefully reaping handsome rewards for it in the process.

Finally, having a look at my “Investments” section, I can see my activity laid out in visual form, which is pretty sweet.

Below the graphs, the repayment schedule is located which provides all the essential information in one go.

What happens to my p2p bitcoin investments?

Now that my first p2p bitcoin loan has been made we have to wait and see if the borrowers I lent to get enough funding to get paid out. This requires a minimum 60% of the request to be funded on the date of expiration. Every loan request is available for investment on Bitbond for 14 days, with mine having between 2 and 12 days remaining on their loan requests at time of writing (12/10/2015).

That being said, should one of my investments not get the funding they need to receive the loan, the money I lent will be returned to me and I will reinvest it on the platform. This will be accompanied with a post on this blog of course to keep you up to date.

That’s it for today. Let me know what you think of this series and Bitbond in the comments below. Any tips are hugely appreciated.

My Experience with P2P Lending in Europe

September 29, 2015 by admin 2 Comments

About the Author: Marco Schwartz is an entrepreneur and p2p investor with many years experience both in the fiat and bitcoin p2p lending space. On his site smartbitcoininvestment he runs a successful blog, giving valuable insights on his podcast and posting his quarterly returns.

I first heard about Peer-to-Peer lending back in 2012. At that time, like many people, I only knew about a limited amount of options to invest my money. Basically, either leaving the money at the bank, investing in the stock market, or buying real estate. However, I quickly understood that Peer-to-Peer lending is an amazing opportunity for an investor, and I started to learn more about it.

Since then, I invested on several Peer-to-Peer lending platform, and even in platforms that use Bitcoin as a currency (Follow the link to check out my quarterly returns on those platforms). In this article, I will share my experience with Peer-to-Peer lending platforms as an investor based in Europe.

When I wanted to start investing in Peer-to-Peer lending, I immediately encountered a major problem: most of the websites where I learned about P2P lending where talking about investing on the two major US platforms, Lending Club and Prosper.

That’s great, but these platforms are completely closed for European investors. The only option for an European investor would be to have an LLC in the United States, and invest via this company. And even with that option, the LLC itself should be accredited - so have more than $1 million of assets, or more than $200.000 of income per year. This was clearly not an option for me.

That’s when I started to look for platforms where I could invest in as a French resident. It took some time, as there were not so many platforms available at that time. There were some platforms in the UK, but there were only for UK residents.

The first platform that I found was Bondora. Bondora enables p2p lending in Europe by providing a platform, which is based in Estonia. They offer loans only to people in the baltic countries, but any investor in Europe can invest on their platform. This is the page you will get when you go over to their website:

On Bondora, it’s really easy to open an account, and then to link a bank account. If you are based in Europe, you can pay via a SEPA bank transfer, and it usually takes less than a day to get my money from my bank to Bondora.

I started to test the platform and to invest manually in some loans. I started to like the platform, and put more money on it. However, I quickly found that the good loans (AA and A loans) on the platform were really quickly filled, so I turned towards the auto-invest features of Bondora which are really well done:

On this page, you can simply choose an investment profile, along with the expected return. It’s very easy to use, and in no time you can set a system that will invest on your behalf, every time a loan that matches your criteria will appear on the platform.

I’ve been investing on Bondora for more than one year now, with a current annual return of 17%. However, my default rate is currently really low, so I expect the return to drop over the next months due to some loans defaulting (the expected loss rate for the portfolio style I chose is around 8 %). This will still be incredibly high for p2p lending in Europe.

The other platform on which I invested in is Mintos. Mintos is a platform currently based in Latvia, but they plan to move their main office to London pretty soon. This is the welcome page of the Mintos website:>

The website itself is quite similar to Bondora and to other Peer-to-Peer lending websites: you can browse loans, invest, and they also offer an auto-invest feature. It’s also very easy to add money if you are based in Europe: you can use a simple SEPA transfer, and you’ll get your money in less than 2 days on average.

This is the screen from which you can browse & invest manually in loans:

You can also set some filters to select your loans:

One key difference between Mintos and Bondora is that each loan is attached to a collateral, for example a car or a flat, that the borrower needs to put on the table in case he/she doesn’t pay the loan back. Also, you will see that some loans comes with a little yellow shield just next to the invest button.

That’s another pretty cool feature of the platform: it means that for the best loans on the platform, a partner of Mintos is willing to buy back the loan in case it is more than 60 days overdue.

If I had to compare both, I would have to say I prefer Bondora for their auto-invest features, but I feel like my money is safer on the Mintos platform because of collateral. As always, I really recommend to diversify amongst many platforms, like you would do by investing in different stocks for example.

Even if Bondora and Mintos are my favorite platforms as an investor based in Europe, I am currently looking more and more to UK platforms. Indeed, some platforms like Assetz Capital or Saving Stream are starting to open up to European investors outside of the UK, so that’s a great opportunity to come as well.

This is definitely my next move as P2P lender in Europe, as it allows me to lend to more people but it also allows currency diversification with the British Pound.

In the future, I am really looking forward for many things. I think we will see more and more p2p lending in Europe, that enables any borrower or investor in the European Union to use these platforms.

I think that at some point, US platforms will also open to European investors as well, as the regulations on crowdfunding & lending are getting more ‘loose’ in the US. Finally, I think Bitcoin is also an amazing opportunity for Peer-to-Peer lending, as it allows to instantly go above all the local regulations concerning Peer-to-Peer lending.

If you want to learn more about Bitcoin P2P lending, I invite you to check out my blog, Smart Bitcoin Investment.

Bitbond Review: My Bitcoin Lending Test

September 3, 2015 by John Carson 7 Comments

Bitbond Company Demo

Please note that this article should not be considered as investment advice.

Q1 and Q2 of 2015 have been respectable for p2p investors. Prosper reported crossing $4 billion in total loans issued, and an average ROI of 6.87% for loans originated by September 2014. Lending Club announced successfully breaking through $1.9 billion in originations in Q2, while providing the average investor with an ROI of 6-8%.

Source: https://www.lendingclub.com/info/statistics-performance.action

Ryan Lichtenwald, of Lend Academy and this blog, has been reporting healthy returns on Lending Club and Prosper of around 10%. Peter Renton of Lend Academy fame, reported an overall p2p lending return of 11.30% in Q2, while Simon Cunningham of Lending Memo has managed a massive 13.3% ROI on the two p2p lending giants.

As you can see from the graph above, Simon, Peter and Ryan represent the 90th percentile. The rest of us can expect significantly less from our investments on p2p lending sites.

So the question arises: Is there a p2p lending site out there that can bring 13% APR to the average investor and significantly more to the experts?

That is when I stumbled across Stu Lustman’s p2plendingexpert blog. Stu has been investing in p2p bitcoin lending platforms since March 2013, and is an expert in his field. Through him I have learnt that bitcoin investors have 3 main advantages over their established counterparts:

the ability to diversify investments globally
access to higher interest rates
lower or no service fees

Below, I have pasted in a screenshot of Stu’s earnings report for May, which shows his monthly ROI’s across all investment hubs.

As you can see, the monthly ROI on his bitcoin loans are significantly higher than on his Prosper and Lending Club investments.

Armed with this fresh piece of information I began to do some research into p2p bitcoin lending and tried to identify the key players. The three biggest p2p bitcoin lending sites are Bitbond, BTCJam and BitlendingClub.

Why I’m writing this Bitbond review

I did a little digging to find out which platform offered the best service, and decided to go with Bitbond, after I noticed they had been featured in Lend Academy. They specialise in bitcoin loans for small businesses. This is a p2p lending sector that is growing fast and one that I find particularly attractive. Other bitcoin lending platforms focus on payday and personal loans which tend to have higher default rates and which are more risky.

In order to find out more about the sector and Bitbond specifically, I decided to write this first Bitbond review.

A loan listing on Bitbond

Since the borrowers on Bitbond are primarily small ecommerce businesses, their borrowers are entrepreneurs who have connected several social media and eCommerce accounts.

I particularly like that I can check out the eBay shops of borrowers, as I tend to trust large amounts of positive customer feedback more than the number of friends on facebook, or Twitter followers a borrower might have. At the same time this is information that you can not find on any of the conventional p2p lending platforms as far as I know.

In the screenshot shown above, you can see that this borrower from Kentucky, has 2315 positive reviews on eBay. For me, that is a signal that this person represents a good investment. It also instilled some confidence in me that I could find reputable borrowers on Bitbond, and would get my investment back, together with an attractive +10% ROI.

So what do you need to know about Bitbond

The first thing you notice when you sign up for Bitbond is the slick and easy to navigate interface. All the information you need is presented in a clean, easily digestible way. Below, I have included a screenshot of their loan listings page.

Here you can see the amount requested by the borrower, the country of residence, the interest rates, the credit rating, the terms and denomination of the loans.

This last point is worth explaining in a little more detail here. The denomination of the request determines the base currency of the loan. If the loan is denominated in dollars (green dollar sign in the CCY column) all values are calculated in USD. Thus, if the price of bitcoin should fluctuate, the repayment value and the returns investors make will remain unaffected.

The top three loan listings are coloured beige, and I have no idea why. The terms of the loan can range from 6 weeks to 5 years.

Coupled with higher interest rates commanded by borrowers from around the world, this provides some pretty attractive prospective returns for me as an investor, but more on that later in this Bitbond review.

Another feature I found helpful was the ability of investors and borrowers to communicate via the comments section of the loan listings pages.

This feature allows you to gauge your prospective investment before lending him/her your bitcoin. For me, getting to know the people I invest in is a crucial part of my investment strategy.

Availability of downloadable historical data

Another reason I decided to write this Bitbond review, was the availability of their historical loan data. This is an option that many of us know and value from platforms like LendingClub and Prosper. Bitbond is the only bitcoin lending platform that offers the same kind of data transparency as what we are used to from the traditional platforms. I could download this for free and easily as a CSV file on their statistics page.

Access to the data is important because it allows me and other investors to create a winning investment strategy. The public availability of this data also suggests to me that they know their business model is working.

Since the company is only 2 years old, the data is not yet as extensive as with the p2p lending giants, but it is enough for a start. With this information in hand, I could start to create a coherent investment strategy. I am a young, single man, so have relatively little to lose and therefore invest quite aggressively.

This is how you get started with bitcoin lending

Besides signing up, the only thing you need to get started is to buy some bitcoin. There are multiple platforms where you can do this. One that I find super easy to use is Coinbase. Once you have purchased your first bitcoins, you can send them to Bitbond.

The deposit gets credited in roughly 30 minutes which highlights one of the many advantages of bitcoin as a payment network. Transactions are quick and at the same incur negligible fees. That’s all you need to do and you’re ready to make your first investment in a bitcoin loan.

Getting to know the borrowers

The first thing I did after registering (took less than 2 minutes) was check out the borrowers I might be interested in. I particularly liked the layout of the individual loan listings pages. Below I have provided a screenshot of one of them.

Here I can check the accounts the borrower has connected, where he is located, the size of his salary, and what the purpose of the loan is.

In this case, the borrower is a man from Quebec who earns a significant wage, has impressive eBay seller feedback and a solid loan history. Thus, I decided to invest. Not much at first of course, but just a little bit to test the waters.

Here’s a short video explaining how to invest in a Bitbond loan:

Diversification and the AutoInvest tool

As with all investments, diversification is key in p2p bitcoin lending. What is different about Bitbond in this regard however, is the size of the bids investors are allowed to make: as little as 0.01BTC, or around $2 US dollars at today’s price. This allows me to diversify massively, across people, continents, and credit ratings, thus minimising risk.

This brings me on to the AutoInvest tool, which I am excited about but haven’t had the chance to use yet. I found this pretty intriguing video of their CEO Radoslav Albrecht explaining it:

Where Bitbond needs to improve

Besides the still shallow historical loan data, the number of key performance indicators available is the second weak spot worth mentioning here. Compared to Lending Club and Prosper, Bitbond does not provide a significant number of KPI’s, and has no graphic or visual display of any of its data.

That being said, the CSV file available for public consumption, definitely benefitted me and helped me create my (hopefully) winning investment strategy (more on that at the end of month).

Conclusion

Bitbond offers a high yield alternative to p2p lending sites. As Stu has shown in his monthly reports, bitcoin loans have the potential to outstrip the ROI of p2p loans. As investors, we should focus on the ROI as the key KPI to keep in mind.

This is by no means a call to abandon Lending Club and Prosper. They have shown that they can produce healthy returns on our investments. However, in 2015 bitcoin lending should be part of any healthy portfolio which aims to diversify and minimise risk.

Thus, the 13% average APR advertised by Bitbond should be considered attractive. The sleek interface and good user experience, coupled with the ability of small and large investors to yield high rewards, make Bitbond and p2p bitcoin lending an attractive proposition.

Finally, I should add that this Bitbond review was just a start. I will be writing monthly updates on my returns on Bitbond, giving you an insight into my p2p bitcoin lending experiment.

Thanks for reading.

Peer & Social Lending 2014 Wrap Up

December 29, 2014 by Ryan Lichtenwald 3 Comments

2014 was the biggest year yet for peer to peer lending and in turn was the biggest year for the Peer & Social Lending blog. I’ll hit on some of the highlights of the past year as well as talk about what I anticipate in 2015 for this site. Most importantly, in 2014 we had not only 1, but 2 companies go public - Lending Club and OnDeck. The Lending Club IPO was an astounding success and I’m excited for what news we will hear from Lending Club in 2015. In 2014, I also began investing in Prosper. Seeing the success of Lending Club’s IPO I think it’s likely we will see Prosper file for an IPO in 2015. [Read more…]

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