I am very curious about peer to peer lending as a potential investment strategy. I have wondered a few times in the past why investors don't make loans as part of an investment strategy.
When I bought my house I found some people who were doing just that - I think it was like an investment company that invested in home loans. In this case I went with this alternative based on personal recommendations and the fact that I could get the deal done quickly. They gave me a good rate with no schmoozy sales pitches and made the lending process very easy. They turned around and sold all the loan to a bank within a month of the sale of the house.
Lending to a person vs. investing in stock seems more tangible to me for some reason, but it could be just as or more risky depending on the person. But it's like a dividend - it's pure money not something that may or may not go up in value like a stock or a house. There are pros and cons to every investment strategy but I decided to do some research in this area.
Here are some links with more information:
CBS Review of Lending Club
http://www.cbsnews.com/news/revising-my-critical-review-of-the-lending-club/
Growth of Peer to Peer lending - a market place which removes some of the traditional risk of a bank:
http://techcrunch.com/2014/06/29/startups-and-the-un-banking-of-america/
Lending Club CNBC Top 50 disruptor
http://blog.lendingclub.com/lending-club-named-cnbc-top-50-disruptor-second-year/
NASDAQ says good addition to lending portfolio (wondering if and how this endorsing post may be related to upcoming IPO...)
http://www.nasdaq.com/article/is-peertopeer-lending-safe-cm358911
Google invests in Lending Club
http://blogs.wsj.com/digits/2013/05/02/google-makes-strategic-investment-in-lending-club/
Hedge Funds and Banks Taking Investment Away From Peer Investors
http://www.sfgate.com/business/networth/article/Banks-hedge-funds-push-into-peer-to-peer-lending-5455005.php
Wells Fargo Bans Staff From Investing in P2P Lending
http://www.lendingmemo.com/wells-fargo-peer-to-peer-lending/
Loss rate on verified and non-verified income
http://blogs.reuters.com/felix-salmon/2011/02/07/lending-clubs-loss-rate-numbers/
Defaulted Loans
http://moneyqanda.com/dissecting-twelve-peer-to-peer-lending-loans-defaulted/
Taxes
http://www.mrmoneymustache.com/2013/04/12/lending-club-profits-and-your-taxes/
http://www.mydollarplan.com/lending-club-taxes/
Risks
http://www.lendingmemo.com/lending-club-and-prosper-risks/
https://www.mint.com/blog/investing/should-you-take-the-plunge-into-lending-club/
American Household Credit Card Debt Statistics 2014
http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
http://www.debt.org/faqs/americans-in-debt/
Various Lending Club Strategies and Results (web search, not verified):
http://investorjunkie.com/4/lending-club-review/
http://www.moneyunder30.com/lending-club-investing-10210
http://www.mrmoneymustache.com/the-lending-club-experiment/
http://www.lendingmemo.com/returns-2013-q4/http://www.writeyourownreality.com/lending-club/invest-lending-club-prosper-2014-investment-criteria/
http://wealthmanagement.com/alternative-investments/advisor-s-guide-peer-peer-investing
https://www.peercube.com/blog/post/18
Lending Club Going Public
http://online.wsj.com/articles/lending-club-has-started-process-of-going-public-1403890688