I wrote about my experiences with using Lending Club to pay off debt in the past. I am also a lender on the site and must say that although I am not getting the highest interest rate returns, my loans are doing well.
I am happy to announce that I now have a new way for you to join Lending Club, instead of emailing me for a referral every time (although you can still do that if you prefer!!!)
At the very top of the site in the middle block you can see two banners for Lending Club. The one on the left lets you become a borrower and get great rates on an online loan to consolidate debt.
The one on the right lets you join as a lender and invest your money in something that not only gets you a great interest rate return but also lets you help someone out. If you are looking for ways on how to invest money online then you might want to check out those two options.
Disclosure: These are associate referrals so I will be getting compensated if you use those links, just like I would if you got a referral email from me.
What’s the typical interest rate return you are getting on your loans?
I am currently averaging 5% on my loans because I went with the ultra-conservative portfolio loans. I only chose people with the highest credit rating and lowest debt ratios because I was very afraid to take a risk.
I do have one loan that is returning 10% though and I know of people who are getting about 11% back…but they invested in some of the riskier loans.
In any case, although 5% return is one of the lowest returns out there…it is still MUCH more than what I am getting through any savings account or CD so it is good for me.
Exactly! And keeping the banks out of the loop as far as possible really sets us all free from their financial slavery!
Oh wow, 5% is actually very good – I’m wondering though, when you say ultra-conservative, if there is still chance for non-payment – and is your principal loan amt protected at all?
Your loan amount is not protected because it is an unsecured loan and Lending Club has no control over how borrowers choose to repay. There is always a chance of non repayment as with any money you lend to anyone, unless you have a secured loan.
10-11% is quite high by most standards. If I can get to about 7-8%, I’m happy. 🙂
Till then,
Jean
Can probably go to the site to find out, but do you know if you are locked in for the term, or can you withdraw your principal loan amount prematurely?
You are locked in because you are lending the money to individuals. The only money you can withdraw is the interest and repayments that you get when people pay up. If someone pays early then you get that principal amount back but otherwise your money is locked in. That is why I always advise anyone who is going to invest to only invest the minimum in each loan. So if you have $100 then you should have 4 loans of $25 instead of one big $100 loan to spread out your risk.
I have always been curious about trying this. Have you had anyone default on a loan?
Actually I had one loan go into default but since I only make loans for the minimum of $25 then that was all that was lost. Actually the person owed $19.73 when the loan went into default so that was all I lost.