Peer to Peer lending allows investors to provide loans to people who need them while getting a good return thus undercutting the banks. The greater the risk for each loan taken the greater the interest rate you will receive back. Here are some tips to get the highest return while avoiding a default.
Use the filter settings to your advantage. The D, E, F, and G loans offer greater returns with higher risk.
Consider employment history. If the borrower has worked for the federal government for 25 years he is more likely to pay back the loan then the fresh college student. This isn't always the case, but something to consider.
Although buying $25 notes is a great way to diversify your portfolio, you can still diversify, and buy larger notes with loans that are more likely to be paid off. You have to use your best judgment on this one, but I have made incredible returns focusing more of my money on higher risk borrowers who truly want to pay off their loan.
Read the entire application before investing. This might be common sense, but often you see loans that go through that haven't even had their credit scores verified. Since you are dealing with your money study each loan application carefully.
评论