I’ve written in the past about LendingClub.com. They are a peer-to-peer lending network where people just like you and me lend money to others and cut the banks out all together.
I had $375 that was available in my account to invest so I just logged in and reinvested it. Since I was last on the LendingClub.com site they’ve made some improvements which make it easier to fund notes as an investor.
And as an investor myself. I’m pretty happy with the returns so far. As of today my investments have returned 11.38%. Try getting that kind of money back with extra money in a savings account.
Now, I never invest money I am not prepared to lose nor money I need to get to right away. So be careful about investing cash you need to get your hands on in an emergency. While there is a process to cash out, it’s not instantaneous.
Now when you want to invest you can easily select the approach you want. This is an example of the loan mix for the ‘more aggressive’ investor.
The next screen shows you more information about the loans suggested when you click the ‘more aggressive’ button. As you can see, some are a higher risk than others. The LendingClub site tries to balance out the suggestions to manage risk for you.
Also notice the average interest rate is 16.65% but on these higher risk loans the default rate is higher also, 4.85%. That’s why your overall return is projected to be 11.08%.
For me, I actually put half my investment in the ‘more aggressive’ category and half in the ‘more conservative’ category to balance out the reinvestment.
While the interest rates are higher on the higher risk loans these are typically debt consolidation loans that people with some credit blemishes could not get elsewhere. I’m willing to give them a chance.