Lenme P2P lending platform review. Lenme which looks to be the rebrand of Lenmo P2P lending platform full review, based on my real life experience.
Lenmo is now Lenme
Last years I stumbled across a new P2P lending platform called Lenmo. (with an “L” not “Venmo”as many assume, and likely part of the reason for the Lenme rebrand) like most things I do in life I jumped right in to give it a try even though in the back of my mind I thought it was just too good to be true. So what was the outcome:
I ended up making a little money so I guess you can consider it a success. But unless a few things on the app change, it’s just too much of a risky play in my opinion.
Here is my full review on the Lenme (formally Lenmo) P2P lending app.
Investing in Lenmo P2P
In total I invested $409 to test the waters. Here was the break down.
First investment: $203.11 loan with payback of 4 months and APR of 100%. Yes you read that right 100%. I’m still not entirely sure the team at Lenme is able to land the borrowers that are willing to commit to such a high interest rate. There were plenty of people looking for some quick loans, and I was happy to provide it to them.
I was able to see some very basic information about the borrow such as their credit score, and few other minor details, so really it was a gamble. The platform doesn’t even give you the name of the person you are lending the money to, you only have their initials to go by.
Lenme Payback Process
The first question I always get asked is “do the people actually pay back the loan.” In my experience with Lenme. Both yes and no.
For my first $203.11 investment the monthly payments were 61.78 for the 4 month term. So if they borrower made every payment I would receive $247.12 in return. On the second month the app notified me that a payment was late. While my mind raced to assume I was never going to see the remaining payments. A couple weeks passed and I received a notification that the payment was paid with an additional $6.00 late fee included. Fortunately I received all 4 payments and in total for this investment I received a total of $253.11
A hefty $50 profit for a $203.11 wasn’t too bad, while risky, I couldn’t help but think it may just be worth the risk.
I had two other investments going at the same time. One was a loan to borrower for $53.11 to someone with the initials “MC” and one for $153. All of them with the hefty 100% APR.
My second $153 investment had a 2 month term. With two payments of $86.25. The borrower paid both payments on time and in total I received $172.50 for a $19.39 profit. Again, I was happy with returns.
Setting up the Lenmo account was relatively simple and likely easier than most of the other P2P platforms. The required information such as social security number, name, and bank account were relatively easy. And as expected for this type of a lending platform.
The apps support documents were a bit scarce however, but I truly got the feeling that is was more of a matter of the app being in startup phase and they were growing quickly. It seemed that more information was being added regularly.
Unpaid P2P Loan
The third investment of $53.11 didn’t have the happy ending however. This borrower did not pay the loan back, and has now been 7 months since the payment was due.
Unfortunately as Lenme only provides the initials and there is no way to contact to borrower, i’m left with the app to try to collect.
I’ve already wrote this off as a loss, and highly doubt i’ll ever receive it back. I’m not blaming the app for not collecting on payment as I knew this was a highly risky investment, but I just couldn’t help wonder if there was a better way to go about collections process.
The good news is that Lenmo (now Lenme) was offering a promotion at the time that when you made your first 3 investments you would get a free $50. Instead of reinvesting that $50 I went ahead and cashed out.
The app is a bit confusing on the returns it gives me a few metrics of what I’ve earned and ROI metrics, but it just doesn’t feel right as without doing some calculations it’s hard to understand if these are realized or unrealized gains. (especially while the loans are currently in repayment status)
Overall my experience was positive, but seeing just the one loan being defaulted, wipe out a large portion of my profit it was enough to have me to call it quits.
My experience appears to may have been an exception. Browsing through reddit forums, I found that some others had nearly an opposite experience with almost none of their loans being paid back.
The Lenme App is a really great concept, and i’m confident as it grows it will become a great success. The barriers from both the borrower and lender are fairly low and is a key advantage to this platform compared to the other P2P lending platforms. However as barriers lowered, the risk is much greater.
If the app creates additional or better processes improvements to the collections process I would likely make it a regular habit to invest on their platform.