PeerCube is a peer-to-peer (P2P) filtering tool. PeerCube has been capturing and analyzing data on P2P lending sites since 2011, which actually makes it one of the better established P2P investing apps available (most have been around only a year or two, and some for just a few months!). Since it began operations, PeerCube has helped users manage more than $60 million in loan investments.
PeerCube works with Lending Club and Prosper, the two largest P2P lending and investment platforms. The reason PeerCube doesn’t work with other P2P platforms is because only Lending Club and Prosper provide data on historical performance and currently available loans. PeerCube will consider extending the service other platforms once they too provide similar information.
Despite the close affiliation, PeerCube is not connected with either of the two major P2P platforms, but functions as a service used in conjunction with both.
The inclusion of the word “peer” in the name of the service is not an accident. Users of PeerCube are able to render their own opinions about various loans, which will be shared with other users – or peers – of the PeerCube service. This shared insight may be significant in helping you to determine the quality and status of various loans.
How PeerCube Works
Signing up for PeerCube is a simple process – they require only that you furnish a username, email address, and password. Much like other P2P automated investment services, you will have to supply your Lending Club API in order to get the best use out of site.
PeerCube starts by reviewing the performance of your portfolio, and then identifying troubled loans by reviewing loan quality migration. It then helps you get the selling price adjustment from the secondary market (Folio Investing through Lending Club).
The service enables you to spend less time managing your portfolio, and provides daily updates of your portfolio automatically.
The service works using loan filters. You can create loan filters to select the loans that you want to invest in, and each filter can be saved for later use. You can either load or delete a saved filter, and create as many filters as you want.
Your notes will be displayed under “Peer Options” so that your peers can see your notes (that’s written notes, not loan notes). You will also be able to see notes written by your peers.
PeerCube offers a social component to investing through the service. This comes at least partially under the heading of “Peer Insights”. Using this feature, you can view your specific loans, or choose from a list of the top rated loans, and search your opinions (written notes) under each loan. You can also search through the list of loans with the most your opinions.
PeerCube updates currently available loan they every one to 30 minutes, while historical loan data is updated once each day.
PeerCube Tools and Features
PeerCube has a number of tools and features that make it unique as a P2P automated investment service. You may find that one or more fill a particular niche in your own P2P investing activities.
PeerCube Risk Index. Also referred to as the bad loan experience index or BLE index, it is a proprietary algorithm developed by PeerCube that assesses the risk of each loan based on various loan natural available from Lending Club historical loan data. 19 attributes are considered when calculating the risk index, including interest rate, FICO range, and the term of the loan.
The index ignores the credit grade given by Lending Club, however this is not an oversight. The credit grade is not considered because the risk index is designed to provide an independent perspective on loan risk. The lower the index, the safer the loan (less likely to be charged off).
Automated Lending. This feature is available for members who hold a Pro Plan subscription (see pricing plans below). You will need to provide your API for either platform in order to use the automated lending feature. The best practices and procedures between the two platforms are largely similar.
The service is designed for investors who do not want to spend time manually reviewing available loans and who want to invest their cash as it becomes available. It is also for investors who have a defined lending strategy that does not require manual review, and realize that the best investment opportunities will be found quickly, and therefore the speed of investment action is a major factor.
The Automated Lending process works when new loans are added to the Lending Club and Prosper platforms. Automated Lending places loan orders on Lending Club at 10:00 PM and 2:00 AM Pacific time, each day. This is to coincide with the fact that Lending Club automatically releases loans to fractional loan pools for retail lenders 12 hours after being listed originally as whole loans.
Loan Filters. PeerCube users have developed more than 1,300 filters to help you develop your lending strategy – with more being added all the time as users develop them. You can start with preselected lending ideas, and then get additional loan filters that are shared by the community. You also have the opportunity to access and customize your loan filters.
You can review past performance of loans with both Lending Club and Prosper, and identify the loan attributes that have the best returns. You can also determine return variability using vintage segmentation. Control over your loan filters is one of the most compelling features about PeerCube, and a result of the social sharing aspect of the service.
PeerCube Blog. The Blog offers articles that explain the intricate details of investing on P2P platforms, and how to improve your investment performance. Articles relate to specific strategies, as well as those that may be required for either Lending Club or Prosper. If you are fairly new to P2P investing, the blog will be an excellent place to start to learn the ins and outs of P2P investing.
PeerCube has three pricing plans: the Free Plan, Pro Plan and Institutional Plan. Here are the details of each:
Free Plan. Not only is there no charge for this plan, but you do not have to register a credit card. You can use loan filters on the primary platform, as well as historical performance. Lending ideas can include return risk strategies. You will have the availability of a portfolio profile, as well as automated portfolio updates. You will also have access to Lending Club’s secondary Market (Folio Investing), as well as past performance tracking with both Lending Club and Prosper.
Pro Plan. You must first sign up for the Free Plan, and then upgrade to the Pro Plan. The fee is $19.95 per month, which takes place by automatic monthly billing on your credit card.
The Pro Plan includes all of the benefits of the Free Plan, but adds a lot more features. For example, you can use loan filters with Lending Club Secondary LIstings, with Automated Lending and with the Past Prepayment and Delinquency Risk feature. You can also project Expected Return by Credit Grade.
Portfolio Analysis includes Portfolio Profiles by Attributes, Portfolio Alerts and Notes at Risk. On the Lending Club Secondary Market, you will have access to pricing suggestions for your portfolio notes, as well as the ability to place buy and sell orders on that market. You can also do bulk purchases, as well as pricing based on vintage, credit grade, or FICO trend.
Institutional Plan. This plan is a custom data driven service that PeerCube offers to institutional lenders, and not individual investors. It provides a flexible fee structure and is based on a daily rate and the assets under management. It provides evaluation, development, and enhancement of lending strategies. On the portfolio side, it offers profiling, performance measurement, and valuation. It also offers risk analysis based on credit, portfolio, and modeling.
Is PeerCube Worth Using?
Since PeerCube offers the Free Plan, you have nothing to lose by giving the service a try. If it works for you, you can advance to the Pro Plan, to take advantage of even more tools and features.
PeerCube can be especially beneficial for larger investors on P2P platforms. Because they charge a flat monthly fee on the Pro Plan, which caps the fee at roughly $20 per month. This is in contrast to other P2P automated investment services that charge based either on your level of monthly investment activity, or on the size of your portfolio.
The “peer” aspect of PeerCube is also insightful. This provides an opportunity for P2P investors to weigh in with their own evaluations of various loans and especially with regard to creating and using filters. It should be valuable for smaller investors, but even more so for larger investors who need to evaluate hundreds of loans each month, and are looking to tweak and improve the process.
The investor participation on loan filters is one of the major advantages to PeerCube. The service already has more than 1,300 filters from which you can select any number that you consider to be most important. As well, you can prioritize your filters, which will give you greater control of the attributes that you consider to be most important in determining which loans and notes you will invest in.
If you have a large P2P portfolio, and you are active trader, you need some sort of automated investing service. PeerCube should most definitely be one of those services.