<prompt> Human: Here is the full article link and here is a summary:Most people see and understand default risk, though it does not show up early in the P2P lending process which can lead to a false sense of security. Fewer people realize they are also subjecting themselves to institutional, liquidity, call and concentration risks.I see a lot of P2P threads on this SubReddit and others, with people excitedly reporting their current rate of return. Its up to everyone, of course, to decide their own investment path, but sometimes I worry that people are overly confident in P2P lending and need to consider the bigger picture.  <response>: I typed up a post on rinvesting so Ill just paste it here.As someone who has invested in both Prosper and Lending Club but now only has an account at Lending Club, here are my thoughts on various points.TaxesYup, the taxes suck. However, my returns are still above 10 after you take taxes into account. If you dont want to deal with taxes then open up a Roth IRA.Default Risk: The most obvious form of risk is that borrowers will default. This risk may be reduced through diversification but, of course, cannot be eliminated or fully estimated. I could say the same thing about my accounts that are invested in the stock market. Theres no way to reliably estimate the risk on my stocks and bonds and diversification only gets you so far.It is true though that Lending Club defaults could skyrocket if the economy has a repeat of 2008. Lending Club notes did pretty well throughout the crash of 2008 though. If we see a repeat of returns during that period it wouldnt be so bad, especially compared to the stock and bond markets. Of course there is the risk that something changes and people default en mass. I dont know if you can go around basing your investments on the extreme hypothetical though.Call Risk: Also known as prepayment risk, this leaves you open to people paying ahead of schedule and thus depriving you of your interest stream. Cant this actually be a good thing? When I receive a payment from a borrower, the two components to it are interest principal. The early payments are mostly interest, while the later payments are mostly principal. Wouldnt it be better if someone paid off their loan early but at the point where Im receiving more principal than interest? I think Id rather get my principal back and start receiving more interest payments from another loan. Here is another quote from the Call Risk section:While there are many reasons this is frustrating including having to spend more time finding more notes, a major concern here is that interest rates go down and you find that the rates you locked into as a lender are ones you no longer have access to.Interest rates on Lending Club could drop, but I just dont see it. After all, we need to compare Lending Club to the risk-free rate. In other words, Lending Club loans need to yield a certain amount above less risky assets to be attractive. The risk-free rate cant get much lower, and I imagine it will rise eventually. At that point youd think that Lending Club would actually need to offer higher interest rates to remain attractive to investors. Of course if rates go too high then LC will have trouble finding borrowers. Either way, I dont see LC lowering rates. Institutional RiskYup, this was my major concern when I started investing with LC. Now though theyre doing so much business that my fears have gone away. People who are worried about this can just wait until Lending Club has an IPO and goes public. Liquidity RiskThis is a valid point. I find that the secondary market has been pretty liquid, but I wouldnt rely on it in an emergency. Then again I wouldnt be keeping my emergency money in stocks either. Concentration RiskYes, diversify your holdings. I wouldnt invest in Lending Club until you can afford to have 100 notes. tl;dr: Im not very worried, but what do I know? Consider your own tolerance for risk and compare the risk of Lending Club to the normal markets. 