Investing in P2P loans via Lending Crowd: An experiment

Are you thinking about dabbling in some P2P lending?

I have been, and last year I took the plunge with Lending Crowd after perusing this handy comparison of P2P platforms in New Zealand. Here’s a little recap of my experience so far.

Signing up to invest in P2P loans with Lending Crowd was relatively straightforward. I did have to upload copies of my ID as part of the Lending Crowd investor application, but it was basically instant.

Once you’re all approved, you need to deposit some money so you can start investing in loans – $500 minimum.

Step 1: Click the Deposit Funds option in your Lending Crowd account. This will bring up all the details that you need in order to do a bank transfer – moving your funds from your bank account into the Lending Crowd account, and ensuring they are applied to your individual investor account.

Step 2: Take those details and do the bank transfer.

Step 3: Funds are sent to Lending Crowd, and applied to your investment account.

Then the fun part: Choosing some loans to invest in!

Loans go FAST on Lending Crowd. I started my application on a Friday afternoon, and could see that the one available loan on the market was close to fully funded. I checked in a couple hours later that evening, and it was gone.

Luckily, I got an email early the following week letting me know that email notifications were now available. Sweet, I thought. I don’t have to keep logging in all the time to check if new loans have come on the market! I promptly signed up to get new Lending Crowd loan alerts by email.

A spate of about 5 loans trickled in the next day. But I didn’t have time to actually log in until night time, and by then only 2 were left and both very were close to funded. I’ll sleep on it, I thought. But by morning, both were gone.

The following evening I received another email, and logged in about 10 minutes later. In that short time, about $3k of the $16k loan had already been funded! I pitched in for $50 and left it at that.
The day after that I received another email in the afternoon and logged in immediately (as in, within a couple of minutes). The $3.4k loan had already had $500 in funding. This was a B2 (highest risk )category with 18.74% interest rate!

That was pretty much how it went. You have to get in quick to get in at all. I kept playing the game over the next few weeks. and committed all my $500 to various loans, mostly in $50 lots each. But by the end of the month, I had 3 buys reversed, leaving me with $150 still to invest. (I assume those loans did not wind up going through for whatever reason.) I had to find new loans to invest in, and so even though I created my account in late September, I wasn’t fully invested until about the end of October. I started getting my first repayments in November.

So far, I have had one loan repaid early – in 4 1/2 months instead of 36 months. That loan was at an interest rate of 10.96%. I wound up earning $1.64 on that $50 loan, so it looks like I made 3.3%.

According to my Lending Crowd dashboard, to date my net average return (an annualised rate) is 11.79%.

lending crowd p2p investment returns snapshot


I’m basically leaving that alone now and just checking in every so often. It’s been a fun experiment.

What, if any, have your experiences been with P2P lending?

7 thoughts on “Investing in P2P loans via Lending Crowd: An experiment

  • Reply Martin - Get FIRE'd asap April 12, 2017 at 18:27

    I have been with NZ P2P Harmoney for about 18 months now and my RAR (annual return) is 15.3% which is pretty good. When I started I invested in all risk groups but now only A, B &C which has reduced my defaults significantly. I have been investing with Lending Crowd as well for about 6 months as I like the idea of secure loans over Harmoney’s unsecured. The RAR is a bit lower at 13% but there is the security there.

    I agree, getting LC loans is a bit of a chore but it’s much better since they send out notifications but often there seems to be only 1 or 2 new loans a day. It’s also taking me a while to be fully invested.

    I did a 1-year review of Harmoney on my website a while back and I’ll do the same with LC after a year. It’ll be interesting to compare them both.

  • Reply Ten Bucks a Week April 12, 2017 at 19:14

    I’ve done P2P through Lending Club for the last two years but I’m taking my money out of it now. Despite the really high interest rates the defaults ended up being too high. It has taken a long time to get the money out as well as people don’t buy used loans very often.

  • Reply Smart and Lazy April 13, 2017 at 09:06

    Will you put more money into P2P lending?

    The problem I think is you can’t scale your P2P lending investment since not much people borrowing from a P2P platform. It would be fine if you put $500 – $2000 into the platform, but how about $10k or $50k, you will run out of people to lend to. Since the number of borrowers are low, it restricted p2p lending investment to be a hobby at this point.

    • Reply eemusings April 14, 2017 at 15:44

      Nope, no plans to put more in.

  • Reply Lindsay | Notorious D.E.B.T. April 18, 2017 at 01:48

    Interesting! I’ve always wondered about P2P lending. I actually have a loan out right now with Lending Club that I’m hoping to pay off soon. Once I get a decent emergency fund under me I’d be interested in trying out the other end of the loans. 🙂

  • Reply Ian C. August 6, 2018 at 20:41

    Any update on your investment with LC or maybe even Harmoney?

    • Reply eemusings August 7, 2018 at 20:33

      Nothing new to report, annualised interest rate holding steady!

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