The 2 Best P2P Lending Automation Tools For Investors-Detailed Analysis

The 2 Best P2P Lending Automation Tools For Investors-Detailed Analysis

Peer-to-peer lending (P2P lending) is a new method of debt financing that enables individuals to borrow and lend money without the use of a financial institution. Online P2P lending platforms connect borrowers to investors, adding ease and speed to the process.

What started as peer-to-peer has grown into a marketplace. The likes of JP Morgan and Citibank now account for over 65% of new capital. Goldman Sachs recently launched its own lending platform named Marcus. It will be the first major bank to do so.

Institutional involvement in the sector has made P2P investing highly competitive. Institutions use algorithms to select the best quality loans, snapping them up only seconds after being listed.

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When it comes to investing these days, it’s you against the machines—and the machines always win. Luckily for retail investors, there are two excellent automation tools they can use to level the playing field.

NSR Invest

NSR Invest is a registered investment advisor that offers managed and self-directed accounts to P2P investors.

Investors can link their Lending Club, Prosper, and Funding Circle accounts to the website and have NSR invest for them. Depending on the NSR strategy chosen, users outperform the market by as much as 2.6% (average is 1.5%).

Source: NSR Invest

P2P Lending

Investors can also open self-directed accounts and use NSR’s analytics to develop their own strategy. Using analytics to back-test loan criteria has proven to be a successful endeavor. Here’s an example of how NSR analytics can help investors generate superior returns.

If you invested in every Lending Club loan, you would have earned a net return of just 0.77%. However, you could have earned 4.60% by investing in loans which met the following criteria:

  • Borrower owns their home.
  • Had zero credit enquiries in the last six months.
  • Their loan is graded B on Lending Club.

Here’s another example of using loan selection filters to your advantage:

  • Filtering D- to HR-rated loans on Prosper by the borrower’s annual income.

P2P Lending

Source: Prosper

As these examples show, back-testing on NSR offers investors insight into which loans generate the best returns.

After choosing a managed or self-directed account, users can then turn on ‘’auto-invest’’ and have NSR invest in the specified loans within seconds of them going live. You can also track loan performance and reinvest capital once they reach maturity on NSR.

NSR also offers access to liquidity with automated secondary-market trading. It’s important to note that only self-directed accounts can avail of this feature. In addition, users must also have a total account balance of at least $20,000.

Users pay a fee of between 0.45% and 0.60% of the total value of all notes purchased (excluding charged-off loans), plus your average daily idle cash balance during the billing period. Self-directed accounts don’t pay fees when their total account balance is below $20,000.

Those with existing P2P accounts can transfer them over to NSR without any fees. There is no minimum amount required to invest through NSR. However, it’s recommended you invest at least $5,000 in your account for diversification purposes.


LendingRobot (LR) is another registered investment advisor offering fully automated P2P investing. Investors can link their Lending Club, Prosper, and Funding Circle accounts to LR. Like NSR, LR offers managed and self-directed accounts.

For managed accounts, investors can select their desired return levels that range from conservative to aggressive. Based on your selection, LR “cherry picks” suitable loans. LR’s machine learning algorithms advance and learn as the data comes in. This ensures LR invests in the best loans based on the latest data.

On average, LR users outperformed the market by 1.45% over the course of 2015–2016.

P2P Lending

Source: LendingRobot

For self-directed accounts, users select loans based on criteria such as monthly income and loan purpose.

An example of LR loan selection criteria:

P2P Lending

Source: LendingRobot

Self-managed accounts are recommended for experienced P2P investors only as new investors may be unaware of how best to use advanced settings.

As with NSR, once users setup their accounts, they can have LR execute the investments. LR is extremely fast, executing investments in less than one second after loans have been listed on a platform. You can track the status of your portfolio in real time through the site. LR will also reinvest your funds as notes mature and cash becomes available.

The first $5,000 is managed for free. After that, users pay a 0.45% monthly fee on assets under management above $5,000. So, for an account with a balance of $25,000, you would pay $7.80 in monthly fees.

LR allows all account types to buy and sell on the secondary market—an advantage for passive investors. There is no minimum investment amount on LR. Investors can also transfer existing P2P lending accounts onto LR.

Having explored the best P2P automation tools, how can investors get in on the action?

Prosper with Your Peers

In 2016, P2P investors earned net annualized returns north of 7%. Even those who took the most conservative approach saw returns of 5%. While P2P lending offers investors outsized returns, there is a lot to learn about this new industry.

Like all investments, there are many nuances to investing in P2P loans. As loans are unsecured, you must fully inform yourself on how to enter and navigate through the market. You can download our free report, Welcome to the Bank of You, which details all you need to know about MPL and how to get started.

In our free report, we detail another key strategy for successful P2P investing. We also provide a step-by-step guide on how to get started in P2P investing. Once you’re set up, you can leverage the automation tools to earn market-beating returns.

Free Report Reveals: How to Join the P2P Lending Revolution and Earn Yields of as Much as 10.39%

The P2P lending technology is turning the traditional banking industry upside down. With almost no effort and risk, you can join the revolution in minutes and earn market-beating yields on high-grade P2P loans. Grab our free report, Welcome to the Bank of You, and learn everything you should know about P2P lending to get started. Click here to download.

Article by Stephen McBride, Garret/Galland

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