Comments on: Earn Above Average Returns with Lending Club

By: Boris Vanharlingen

Boris Vanharlingen — Tue, 05 Jul 2011 19:39:41 +0000

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By: Kevin

Kevin — Sun, 19 Apr 2009 18:09:17 +0000

@Cathy: Nonetheless any time you lend money it isn’t risk-free. I haven’t had a late payment or default on my two loans either and I’m earning 9%. Still.. you can get into some real trouble by just chasing high returns, no matter if it is the stock market or Lending Club or…

By: Cathy

Cathy — Tue, 14 Apr 2009 20:21:14 +0000

Let me say up front that this isnâ€™t a risk-free return. Youâ€™ve got to stop and think here. â€œHmmm, if the real banks wonâ€™t lend them moneyâ€¦â€

Lending Club only accepts applications from people with prime credit scores, 680+. Just because you have a credit score of 800 doesn’t guarantee you’ll get the best rating – they take into account many variables like debt to income ratios. Their acceptance rate is only 1 applications in 6. Many of these people are looking for loans on LC not because the banks won’t approve them, but they can get a much better rate through LC. Many others are looking to consolidate or get a lower rate on existing loans.

By: Cathy

Cathy — Tue, 14 Apr 2009 20:13:01 +0000

I’ve been using Lending Club for over a year. It’s great – I am really pleased with it. I’ve earned a steady 11% interest on my notes, and have had no defaults.

By: Weekly Wrap Up February 20-28 | Personal Finance Firewall

Weekly Wrap Up February 20-28 | Personal Finance Firewall — Mon, 02 Mar 2009 02:52:15 +0000

[...] Just about everyone is trying Lending Club [...]

By: Russell Fascenda

Russell Fascenda — Wed, 25 Feb 2009 17:33:31 +0000

Firewall + Kevin: I originally got involved in prosper as an alternative to lending money to my friend; the advantage of prosper was, it was more formal, I would earn interest, other people would partipate in the loan (although I provided the bulk of it), and it contributed to my friend building a credit history.

Kevin: While waiting for my friend to sign up and get approved, I ended up making about $4,000 in small loans to others. Initially I did it manually, reading the listings. Later I learned about their automated portfolio system, where you can define the criteria for loans and it bids for you. I don’t really prefer that way, I’d rather have the personal touch, but both types of loans have worked out for me.

While the listings are created by the borrower, for loans that are fully-funded (bids reach the requested amount) prosper verifies all the financial data before granting the loan.

By: Kevin

Kevin — Wed, 25 Feb 2009 14:57:25 +0000

@Russell: What percentage of your investment portfolio do you have in loans? Are you putting a significant amount of money in?

@Personal Finance Firewall: I’d be interested to hear how that turns out for you. I’m still skeptical of people getting on and just trying to steal money from people and not pay it back, or getting into hard times and being unable to pay it back.

By: Personal Finance Firewall

Personal Finance Firewall — Tue, 24 Feb 2009 04:49:52 +0000

I think this is a great idea. I mean most people will lend money to a friend and not charge any interest. This is a way for a large group of people to micro lend to a person and get a nice interest rate back. Its great. I signed up for Lending Club about a month ago and have yet to fund the account. I have some other investments in the hopper and am waiting for a nice slump in activity so I can focus on deciding my funding amount, picking a prime loan and diving in. Never jump into anything too fast, but I think this is a great program.

By: Russell Fascenda

Russell Fascenda — Mon, 23 Feb 2009 23:44:24 +0000

I’ve been a prosper lender for about 18 months and earn about 10% on my loans overall. I’ve been fortunate to have very few late payments or defaulted loans. Some have paid off early.

Even though you select which loans to fund, there is a bank in the middle to handle the legalities of loan agreements and interest payments. You don’t have any personal recourse with the borrowers in fact there is legal protection in both directions to isolate each from legal actions.

Some of the largest lenders have awful default rates, check out http://www.lendingstats.com for a wealth of statistics on prosper.com lenders.

By: Kevin

Kevin — Mon, 23 Feb 2009 19:02:55 +0000

@D.Smith: It’s just like any other lending situation. If the person defaults on the loan, the loan gets sent to collections and you hope to make pennies on the dollar from it. The person gets a huge ding on their credit as well.

It seems risky, and it is. But they are pitching the fact that it’s about community — one person recommending another. “Yea, I work with D.Smith and he’s a good guy, I can confirm his details” etc.

I would still stick to the higher quality credit areas though — the 9-10% loans. Much further from that and the writing/details inside the loan are not up to par and just make me nervous.