I have been a borrower on Lending Club in the past and I fully paid off my loan within the required time. I was so pleased with the site and my results that I decided to become a lender as well in an effort to diversify my income and move more into the world of generating passive income.
I invested a small amount at first and used only the minimum amount per loan per person. This means I only lend $25 to each individual so that I can diversify my risk.
I am not a big risk taker so I was very careful to only choose loans with low risk, which also meant a low rate of return. As you can see from the image below, my rate of return on the loans is now 2.37%, which is pretty low for the funds that are tied up.
As I get more money in the future that I am able to invest, I will invest in some more risky loans that have a higher rate of return so that I can earn some more money.
If you would like a referral to Lending Club where you get a bonus $25 to invest…..just leave me a comment or email me and I will send it out to you.
Sounds kind of risky. So how does Lending Club work?
I have been thinking about online lending as an additional investment.
Sounds interesting. I’m like Savings Accounts Girl, though, I’d like a little more information and maybe some more of examples of how it’s paying off for you.
You are taking a bit of a risk by lending money to people via such service because there is no guarantee that they will be a good as you were and pay everything back in the required time. But then again, you stand to gain extra money by doing so but you won’t know for sure until you take the risk.
This is a pretty fascinating trend to me…websites that connect “micro lending” regular joes with other people that need loans. Kiva.org is especially cool in that it connects entrepreneurs from developing countries with regular people that provide loans.
I imagine the anti-fraud is the secret sauce for these sites, right? Must be a ton of lowlifes that spend all day trying to figure out how to skirt the rules.
This Lending Club sounds like an interesting idea, and sounds like you can make some money doing it. I wonder, how can you know which is a more risky loan, from one that is not?
It all sounds kind of risky. So how exactly does this Lending Club work?