Lending Club: $100 Giveaway and Review
March 10, 2009 by Miranda Marquit
Filed under Finance
Last week I mentioned that I was trying out Lending Club. And, now that I’ve given it a spin, here is the rundown of what Lending Club is all about. Oh, and one of you lucky readers can have a free $100 in your Lending Club account. Here are the rules of this $100 giveaway from Lending Club:
- Leave a comment on this post by 11:59 p.m. Eastern Time this Friday, March 13, 2009. Make sure you have a valid email address, or I won’t be able to contact you — if you win.
- Sign up for Lending Club. It’s free. But you need to have an account, so that if you are the winner, your $100 can be added to your account. I suppose you could leave a comment, and then sign up if you win :) If you never use the account, that’s fine. You do not actually have to go through the “funding” process in order to have an account when you initially sign up. If you are already a member of Lending Club, you can still win the $100.
One winner will be chosen at random from the comments on this post to win the $100 account credit at Lending Club.
What is lending club all about?
With the economy making it difficult to get approved for loans, many people are turning to P2P lending. Lending Club is one of many P2P sites (like Prosper or Green Note) that offer ordinary people the chance to lend money to their peers in small chunks. It is possible to get loans for credit card consolidation, business expansion, auto loans or money for a down payment on a home. I gave it a try when I was approached by a representative of Lending Club.
$50 was placed in my newly-opened Lending Club account for me to try it out. Turns out that I enjoyed it so much that I actually added my own $50 (via PayPal) to do a little more funding. Here’s how it works if you want to invest:
- You look through loans requested from borrowers.
- You choose to fund part of the loan by buying $25 notes.
- You receive a portion of the interest earned on the loan, plus repayment of the principal that you lent.
The nice thing about Lending Club is that you can browse available notes and limit who you lend to. If you are more risk averse, and don’t mind getting a lower return, you can restrict your search to those with only A or B rated credit. If you have a little more to risk, you can earn higher returns by funding someone with lower credit ratings. Of course, the lower the credit rating, the higher the risk of default — so you could lose your investment.
Lending Club includes payment history information, risk information, and allows you to pose questions to the borrower. This helps you make a more informed decisions about whom you lend to. All of this is done without divulging telling personal information about the borrower.
Overall, I found Lending Club fairly easy to use. The interface is straightforward, and you can decide how many notes you want to buy — as long as you have at least $25 in your account. I like that you can use PayPal to fund your account, and the ease (in theory — since I haven’t started receiving payments yet) with which you can withdraw money from your Lending Club account when you start receiving your portion of the payments on the loans. It is also possible to reinvest your earnings fairly easily.
Since I’m the cautious sort, I’ll give it some time before I add further funds. But if my current notes yield some returns, I’ll probably start devoting a portion of my monthly earnings to notes at Lending Club as part of a long-term savings plan.
Do any of you have experience with Lending Club or other P2P Lending? Remember to leave comments by this Friday night in order to be eligible for the $100 giveaway.
image credit: US government
I have been using LC for over a year now and think it’s a good system. Certainly worthwhile to have a small portion of your total investment portfolio invested with them — i.e., smaller than 5% of total assets.
I have used Prosper for last one year and I still think I am trying them out with only a small amount and maybe 10 loans made or so. So far the experience has been great, with very little delinquency, but then I took great care in picking who I lend to. The returns are definitely much better than any CD or money market fund.
There are lending groups on Prosper that syndicate lending large amounts of money.
$100, what a great giveaway
Excellent review and nice giveaway! :)
I didn’t know that something like this existed. It sure is a great idea!
Thanks for the giveaway!
What a fun contest. I’ve been using Prosper, but lately I’ve had several defaults. Maybe it’s time I look at Lending Club and give it a try.
I am currently a Lending Club lender, its rewarding to help others with your investments. I look for borrowers that are not just swapping debt, but doing something constructive with the funds.
Awesome. More free money! :)
Tell you the truth, I didn’t see whaere I could sign up for an account. I am all into sving and investing so I plan to check into this more.I have never heard of this plan before.
Thanks for all the comments so far! Hopefully we’ll get a few more. Or maybe not — since your chances are better with less comments ;) Anyway, @joni, you can find the sign up in the upper right corner. It’s labeled “join now.”
love to win this, but i havn’t signed up for lendingclub yet. thought i’d wait until i win <— ooo look, positive thinking
i am just hearing about the lending club.
Please enter me. Thanks.
this is the first i’ve heard about the lending club, thanks for bringing it to my attention
Sounds quite interesting. WIth credit rankings and the web site, seems like there’d be some overhead here. Looks worth investigating.
Please enter me.
I had heard about something like this before but I didn’t pay much attention. The explanation was excellent and I will look into this a lot more.
Thanks for running this giveaway.
Already a lender, count me in!
I have never heard of The Lending Club… what a great concept—helping others out with money that you would normally keep deposited in a bank. I’d much rather see my money assist those in need. I’m going to bookmark this page!
no experience- love to win the contest
What a great idea to help someone out. I hope more people learn about the Lending Club.
I had never heard of the Lending Club. It sounds interesting! Thanks for the chance to win!
Thanks for the offer. Lending Club sounds interesting.
Please enter me too–thanks!
I could use it.
I would love to win this
I’ve dabbled in Prosper for a while… wouldn’t mind giving LC a try.