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 🙂