P2P lending status - September (2008)

Each month I post the status of my P2P (peer-to-peer lending) account that I have through Prosper. This account brings in extra income and is on of my more established passive income streams. My current loan portfolio includes -

• Number of Loans - 49
• Average Interest Rate - 16.80%
• Daily Interest Accural - $1.01
• Number of Late Loans - 5

Over the past month, I have increased the number of loans from 46 to 49 and I currently have one bid out on another waiting to be approved. If this loan is funded, that will bring me up to 50 loans! My average lending rate rose from 16.63% to 16.80%. My daily interest accrual jumped from $.95 to $1.01 because of the increase in the number of loans and the slight jump in the average lending rate from last month. This daily interest accrual will bring in around $30.30 per month in interest income. This form of interest is an excellent source of passive income. My long-term goal is to bring in $50.00 per month in interest income through Prosper, which will fund 1 new $50.00 bid. The magic number that I am shooting for is to bring my daily interest accrual up to $1.66.

Late Loans
I am a little more upbeat this month in the 5 late loans that I currently have in my portfolio. These late loans make up 10.2% of my portfolio compared to 10.8% last month. I have not seen any increase in the number of late loans compared to last month. The breakdown of these late loans are as follows -

• Late - 1 loan - This loan only has $4.33 left to payoff in principal and is about 1 day late and is not a concern to me at this point.
• 1 month late - 2 loans - I have two loans that are 1 month late. The good news here is that one of these loans last month was over 2 months late and not one payment had been made yet. I had assumed the worst, but finally got a payment to bump it into the 1 month late category. The bad news is that the borrower for the other 1 month late loan has filed for bankruptcy! At this point I don’t think I will ever see the remaining principal balance of $45.40 remaining on the loan.
• 2 months late - 2 loans - I have two loans in the 2 months late payment status. One of these loans is from an previous Prosper borrower who paid off a loan in the past. I am optimistic this one will come out of a late status eventually. The other 2 month late loan comes from an individual with a decent credit history who is trying to get out of credit card debt. I am also optimistic that this loan will eventually come out of late status.

Overall, it was a good month for my Prosper lending account with the exception of the bankruptcy loan. Hopefully, I will continue to move forward in meeting my goals to put this passive income stream on autopilot!

Tagged as: Income Stream, Passive Income, pro