This post follows up on my previous post for GoPeer results. As I had in that post I reduced my risk tolerance to C or higher, and continued with an auto-deposit
It was nice that GoPeer fixed their Net Annualized return during 2022. This makes looking at results far more fair, and informative. While gross returns are interesting, they are quite deceiving as I pointed out last year as you have a lot of charge-offs with these consumer loans. The number that matters is what you get to keep after all the fees, charge-offs, etc.
So lets take a look at our 2022 results below:
As you can see the gross yield looks great, but after 15 charged off loans it comes down to a much more realistic 8.2%. This still is considerable better than you can get at any bank, but is a much higher level of risk.
With the higher interest rates now available from Outlook Financial or EQ Bank the performance delta has really narrowed. Given that I turned off my auto-deposit in January 2023 and plan to just let the current principle and returns keep getting auto-invested. We will see what happens this year!
I have been auto-investing a little bit each month on the goPeer Peer to Peer (P2P) lending platform for the past year and a bit. This post is to provide some real world results of their platform.
Overall the investing process is very straight forward with auto-invest. I had set it to invest the same amount on loans graded C- or higher a year ago.
Looking at my results for the year below I was concerned as my delinquent amounts are nearly as much as my total earnings.
Results after a year or so
This is obviously not great, so I did another level of investigation looking at the amounts in Delinquent status. Mostly they are late but at least one is classified as in default (but not charged off I guess). Interesting 100% of my Delinquent loans are rated at C-. Given this I changed my auto-invest to be C or higher.
Overall the experience has been pretty good, and I plan to continue making regular monthly contributions so see things improve over the coming year. The rates are very strong even on B and C loans, and I would rather take a little less interest and get paid back!
If you are interested in anything leave a comments, and it would be great if you used my referral code so we can both get $30. You just have to open an account and invest $1000.
While looking at savings possibilities, one area that was always of interest was Consumer P2P lending (Person to Person) lending. This is where a lot of banks make considerable money, and certainly the rates people pay to credit cards and payday lenders is exorbitant. Personally I support trying to help people achieve financial health, and if you are paying 20% interest that isn’t going to be easy.
While Lending Club is quite popular in the US, there hasn’t been a similar service available in Canada until recently. goPeer is one such company, and advertises itself as the Lending Club of Canada.
Along with Lending Loop goPeer is federally regulated which means anyone can invest up to $10,000 per year in similar platforms. If you want to invest more than that a year you need to go through the accreditation process with goPeer.
Experience
The Investor sign up experience was pretty straight forward. Once again they use Plaid like with EQBank for linking accounts. There wasn’t an easy way to add non-Plaid working accounts and you can only add one account so pick one you can get money in and out of easily. Standard know your customer questions and you are ready to go.
Once the account is setup, you will have the ability to invest in consumer loans. The market place provides a fairly robust list of loans available. You can click on each one and read more about them like what the loan is for, applicant location, credit score, income, etc.
After the first few times clicking around, it gets pretty boring unless you plan is to invest large amounts. If you are investing the minimum $10 the time to review the applicant is costing more than the $10. So I turned on the auto-invest feature and selected the loan grades I was interested in (decided anything above a D) and the amount per loan ($30 for now).
Results so far
There are lots of people saying they have seen pretty high delinquency and write offs which would really impact returns. So I am quite interested in seeing how that plays out.
The marketplace seems to have a pretty robust set of loans so money is being invested reasonable quickly even at $30 a loan. Much better than Lending Loop.
After a little over a month I have invested in 17 loans, have 14 more pending (waiting for full funding and completion). The portfolio page provides a good detailed overview of what you have in place, and has a nice summary chart you can click on slices to drill down on.
Referral
Why not use my EQBank referral code? We both get $30 if you invest $1000 or make your first payment. I have to pay for my blog hosting somehow 🙂
