More investors turn to P2P lenders for high yield
The volatility in the stock markets and rock-bottom rates in most categories of bonds have prompted more investors to turn to peer-to-peer lending platforms for higher yields.
It’s easy to see the appeal. Since 2009, average net annual returns for investors who lent money through Lending Club and Prosper Marketplace, two of the largest peer-to-peer lending platforms for consumers in the U.S., have ranged from 5 percent for its most creditworthy borrowers to to 9 percent for its subprime borrowers. (The average credit score for a borrower in Prosper’s lowest-rated loan category is 664.) Compare that to about a 1.5 percent yield for a five-year Treasury bond, as of Friday, and about a 2 percent yield on average for Aaa-rated, 5-year corporate bonds.
Read full article at CNBC
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