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Why Lending Club Is Better Than Your Bank

Posted March 17th, 2010
by Staff

There are so many ways to get a small loan these days. You can try to get a personal loan from the bank. Why pay the bank all that interest though? You could even hit up friends and family for a loan. Even with all these options, there is a new place to snag a loan: the Internet. It might seem odd to go online for a loan, but there are a lot of options creeping up online these days. One of the best options comes in the form of a site called Lending Club.

Lending Club is a peer-to-peer lending network. This is almost like getting a loan from a friend, with the exception that there is an application process and the lender is some person you do not even know. It is not as bad or scary as it might sound.

First up, the application process. Lending Club has some higher standards for snagging a loan. You must be employed. You must also have a decent credit score. You must be willing to divulge any financial information that people ask for. Keep in mind there are many other people doing this so you are not alone. People just want to make sure that their investment is going to a good place, you.

You can ask for up to $25,000 from investors. Once you are approved, your money can come from one or more people. This is like any other loan and you must repay it. You repay one account though, not several people. Lending Club makes this process as painless as they can.

So no, you have paid your loan off and you have some money you would like to invest. Why not help someone else the same way you were helped out. That is right, you can put your money into Lending Club and make some income. As an investor, you will get to see all the loan requests, ask the questions, and decide where you would like your money to go.

At the time of this writing, Lending Club has funded $93,595,575 in loans and paid $6,481,303 in interest to investors. That’s not a bad setup. This is not something that any Joe can jump on and do. Therefore, you will have to do a bit of legwork to make sure you qualify to borrow or invest.

Like anything on the internet, research is key. Giving your financial information to anyone is a big risk. Therefore, do some research before you jump on Lending Club. Look for people’s stories and how they were treated. Verify that what you are about to embark on is a smart decision for you.

Lending Club is not something to just jump onto. For those that can make use of it, there is a full circle here. Get some money and give some money back. Do your research, make sure you are comfortable with it, and then take the plunge. Who knows, you might just be making yourself some money and not the bank!



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