Lending Club makes P2P diversification simple with new investor tools
byOct 30th 2009 1:30PM
The new features, which went live this morning, make it easier than ever to find the types of loans you want to invest in and create a diversified portfolio based on how much risk you want to take.
The new investor experience provides you with more information and the ability to filter on several factors to find loans that appeal to you. For instance, if you want to avoid a specific type of loan such as home improvement projects, you can exclude them from your loan search. Another welcome filter will show only loans that have been approved for funding.
In the past, investing in multiple loans in the peer-to-peer lending industry was a challenge because of the time it took the investor to do a decent amount of research on each loan.
Rob Garcia, Sr. Director of Product Strategy at Lending Club, explains how the new Lending Club features address this. "The challenge for the new investor tools was to balance simplicity and control. The portfolio builder makes it fast and easy to invest in a diversified portfolio while the 25+ filters available give investors the ultimate control to decide which kinds of notes to invest in."With the new investor tools you choose how much you want to invest then pick a predetermined investment strategy or, if you prefer, a specific rate of return.
With the new investor tools at Lending Club, diversifying your investment is as simple as choosing how how much risk, or what rate of return, you're comfortable with. The cool thing about these portfolios is that you can even apply the same filters mentioned above to block specific loans from becoming part of your portfolio.
After picking candidates for your portfolio, you can review the loan grades, average default rate and projected rate of return. From there, you can look at the individual loans or simply click a button to invest in them.
These new features will make it much easier for peer-to-peer investors to diversify their lending accounts, and, in theory, bring them a better overall rate of return. Using a strategy like this in addition to hand-picking loans that appeal to you should make for a better investing portfolio.
Here's a video of Rob Garcia from Lending Club demonstrating the new investment features.
If you're looking for a loan instead of making one, then I suggest you check out a borrower's look at using Lending Club.