Managing a peer to peer portfolio effectively requires experience, skill, and time. There are a number of investors intrigued by peer to peer lending, but simply don’t want to do the legwork of reviewing borrowers credit and investing tiny chunks of their portfolio into many different loans. This is particularly true for investors looking to put a significant amount of money into their account. The time to get the portfolio fully invested and then the ongoing maintenance in keeping it fully invested can be quite demanding. The good news is both Lending Club and Prosper offer solutions for investors looking for a more passive p2p lending option.
Lending Club PRIME
There are two types of accounts at Lending Club, standard and PRIME. The main difference is with standard the investors personally invests all of their money on the platform, whereas with a Lending Club PRIME account the money is automatically invested. Investors specify a desired loan interest rate to target and tell Lending Club whether to reinvest the payments made on the loan. Investors may choose over time to personally begin managing their reinvestments if they want to take control of the account.
Lending Club PRIME accounts are only available to investors opening an account funded with at least $25,000. There is a one-time fee for the service, which is 0.8% charged when the money is transferred into the account (so a minimum of $2,000).
Prosper just announced today that they will be offering a passive account, dubbed Prosper Premier. Investors tell Prosper the loan grade and note term target allocation, maximum amount per loan to manage level of diversification, and whether to automatically reinvest. Premier accounts have a fee of 0.8% charged when the funds are invested, but according to Social Lending Network, for a limited time this fee will be waived. The minimum account will also be $25,000.
These types of accounts can be a great way for investors to get their portfolio fully funded, giving them the option to take the reigns at a later date, if desired. Lenders can also monitor the performance of the loans over time and get a hands-on feel for the specific types of loans that they may choose to avoid in the future.