Lending Club is a peer-to-peer lending site. What exactly does that mean?

Have you ever tried getting an auto loan, or a mortgage loan, and thought to yourself, “man, I wish I could be the one deciding who gets approved and how much money they can have?” With Lending Club, you can!

LendingClub.com allows you to register as an investor and deposit a minimum of $1,000. You can then browse a huge selection of loans that range in purpose. Some borrowers want $20,000 for a new car or $5,000 to help them consolidate their credit card debt. Those are just a few examples of what people tend to request your money be used for.

One of the many perks is that you can invest as little as $25 per loan. Spreading out $25 over 40 loans ( Remember that $1,000 minimum) is highly encouraged. From the in-depth research I have done on Lending Club, returns are commonly between 5-10%. That’s a much nicer ROI (return on investment) than you would get in any bank savings account.

Where there is a reward, there is sure to be some risk as well. If one of the loans you choose to invest in happens to go into default, meaning the borrower doesn’t pay as promised, you lose out on that initial investment. Luckily, if you choose which loans you invest in wisely, any money you lose because of loans getting charged off will more than be made up for with the interest you’ll gain from people that pay their loans on time.

I have just made my initial $1,000 deposit and am still waiting for the funds to be deposited on the site. With a direct bank transfer, that’s something that takes roughly a week to process. I’ll be sure to keep everyone up to date with my experience using Lending Club.

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