While I’ve only been blogging about my Lending Club returns so far, I also have a Prosper account. I’ve actually been a lender with Prosper longer than Lending Club, almost 2.5 years now. I’ve been a lender with Lending Club for almost 2 years.
You would think that by now, I’d be able to choose a favorite. However, I cannot. They both have features that I like. Prosper has instant fund transfers, Quick Invest and a robust API. I seem to have less late loans on Lending Club and the company is doing better financially. I’ve decided to do a little experiment to sort things out.
This morning, I transferred money into my Prosper account so that it has the same amount of money as Lending Club. I also recorded all my interest and defaults in the handy little table you see below. From this point on, I’ll not only be closely watching my returns with both platforms, but also paying close attention to how they do against each other.
Every contest has to have rules and here are mine:
- I’ll use a combination of Lend Academy’s Super Simple Strategy and also this one. I’m using both because sometimes there aren’t any loans available for a particular filter.
- I’m using the Quick Invest feature on Prosper. This means that loans are automatically purchased for me based on my preconfigured filters. I don’t have to intervene at all. This is both scary and exciting.
- Since Lending Club doesn’t have a feature similar to Quick Invest, I’ll login every morning at 6am (PST) when most loans are released. Since loans are being quickly bought up, this will give me the best chance of getting the loans I want.
- To make the contest fair, I’ll add money in equal amounts. If I add $100 to Prosper, Lending Club will get $100 too.
In reality, I admit that the Prosper verses Lending Club question may never really be answered. The industry is young and both companies are evolving rapidly. As both platforms evolve, my strategies will also evolve. Also, due to the the small size of my accounts, just a couple of unlucky defaults could skew the contest. The results would be a bit more accurate if I had at least $10,000 in both accounts. However, this is a goal I’m working towards, so things should even out over time.
I plan to provide an update about every month, so stay tuned!