Sorting to Target Higher Returns
One of the most powerful features of the Prosper platform is the ability for investors to set up automated investment plans. In essence, Prosper investor money is always working has hard as it can to decrease idle cash drag on your account. Much like you can create a saved search on Lending Club, Prosper takes it one step further and allows you to configure their platform to buy notes of loans in predetermined dollar amounts for that filter.
There is a lesser known and used function of the automated investment plans, and that is the ability to sort the loan results by several criteria:
- Loan Category
- Amount Requested
- Prosper Rating
- Lender yield
- Debt to income ratio
- % Funded
- Number of investments
- Time left
- Date created
- Loan term
Perhaps you are a crowd source funding investor, one that buys loans based on the greatest number of people who have funded it. You could sort your results by number 7 or 8, “% funded” or “number of investments”.
If you are chasing yields, you could sort by number 4 or 5, “Prosper rating” or “lender yield”.
If you want to decrease the time your money is in a funding state, select filter 9, “time left”.
This is a powerful and will easy way boost returns especially if you choose to chase yields.
Prosper allows you to use up to three sorts so you can fine-tune your sorting. You could add loan term and sort ascending to bias your investment towards 1 and 3 year loans. From the image below you can see I am chasing yield by filtering on the Prosper rating. Pay close attention to how they sort. If you select ascending it will filter the criteria going from a-z, then numerically from 0-9 and finally HR-AA which is slightly counterintuitive. So watch out!
What About Lending Club?
At this point there is nothing quite like this on the Lending Club platform, but in the mean time you can still use the same technique manually.