Since I heard about Lending Club, I have been fascinated with the concept and its potential to allow anybody help others with personal loans that will get them out of debt. I became a lender on Lending Club a couple of months ago and have since chipped into more than 40 loans already.
Paul was kind enough to share his positive experience with Lending Club in helping him control and pay down his debt. He talked about how wonderful it was to see other regular people like him funded the loan, as opposed to the traditional cold banking institution that attempted to charge him upwards of 14% even with a pristine credit history.
On Lending Club, Paul found a community of compassionate lenders that helped him in his situation at a much more reasonable interest rate (around 9%), which has motivated him to keep up his payments and consider his Lending Club loan above any other debt when it comes to paying his obligations every month.
What started out as an interview about the benefits of borrowing from LendingClub.com turned into much, much more.
I applaud Paul for opening up and sharing his very personal inner story and struggles.
Our conversation went from a compassionate discussion about LendingClub.com to mental health issues, manic-depression, bipolar issues, health insurance issues, marital troubles, bankruptcy, repossession, potential separation, employment issues, medicaid, and some intense money troubles.
Paul openly talked about how his bipolar mental illness had lead to some debt that he jumped into during one of his manic, or up, phases. A very good conversation to help you understand how mental illness can lead to problem debt. And now that Paul is worried about having his health insurance company drop him for claims since he had needed to go to the doctor and hospital, I worry that he won’t seek as much help as he needs.
We were sitting outside a local shopping mall where we met and after I turned off the recorder we had a very personal conversation about his situation and I assured him that I was here for him if he needed any help to make it over the hurdle he is facing now.
While I was preparing his photo to post I noticed a very interesting quirkiness. While Paul is bipolar, the left side of his face as I looked at him was happy but the right side looked very sad.To really see what I saw, cover one picture with your hand and read the face.
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Steve: Let’s just start with the basics, your name.
Steve: Okay, Paul. And I found you through Lending Club, actually.
Paul: That is correct.
Steve: They were kind enough to find me a local borrower. And we’re sitting here in Raleigh, North Carolina. And can you tell me your story, your experience with the Lending Club, and how you got involved with it?
Paul: Well, I got involved with it about a couple of years ago, actually, when I started looking for a source to find some money to help me consolidate and pay off a credit card and a small, unsecured loan debt that I had incurred. Went to the banks first – my bank – and found that money was more expensive there for basically a signature loan or an unsecured loan. They wanted somewhere in the neighborhood of 14 percent interest.
I went home and I said, “You know what? I bet I can find something online.” And I just typed in “consolidation loans.” And after I went through about ten pages of all the hoakie scheme loans and gimmick loans, I found this little add for Lending Club, and it was secured by a bank. And I had heard something on television about online banks. So I wasn’t immediately skeptical, which I was nice, and so I just started to look at that and learn more about the Lending Club to help me to borrow some money.
Steve: So your bank wanted 14 percent. What did your rate end up being at Lending Club?
Paul: My rate ended up between 9.76, and this was I think, like I said, about a year and a half ago. And I was kinda surprised because I had a long working relationship with that bank and I also had A No. 1 credit, did not have a late payment since I established credit in my early 20s, did not have an unpaid bill. There was absolutely no blemishes on my credit record.
Steve: So do you feel you know that the people who lend the money are individuals actually like myself, ’cause I’m a Lending Club lender.
Steve: So they’re people instead of a big bank. Does that make you think differently about who you’re borrowing from, and do you have a greater will to repay?
Paul: Mm-mhmm. Absolutely. Right away, I felt like in my first few interchanges with the people there at the Lending Club site felt like I was gonna be a part of a group, a part of a family, and that I would definitely be getting money from people who had compassion for my situation. But by the same token, I also felt like I had a greater responsibility to repay the money because of the faith that they had shown me in lending me this money.
Steve: How much money did you borrow, again?
Paul: My initial note was for $15,000.00.
Steve: And did you borrow subsequently to that?
Paul: No, no, no I have not. I’m still paying off that initial $15,000.00 note.
Steve: Okay. And that was about two years ago.
Steve: And did that debt consolidation loan, did it actually solve the problem?
Paul: Well, I wish I could say that it did. It solved the problem that I had at that time. Since then, I unfortunately had a couple of medical problems and, and probably only half of it was covered by insurance. So I’ve incurred considerable medical expenses since then, and I gotten deeper into debt. And I also recently lost my automobile. I had borrowed money to buy a new car a couple of years ago, around the same time that I signed up with Lending Club, and wasn’t able to keep up the payments.
So my debt situation is actually worse than it was, but in terms of the older debt, definitely I feel like it’s a good, steady, safe way to pay back the money, and it is – they don’t hassle me. There’s no collection calls. There’s no threatening e mails. Of course, I haven’t been late on a payment, but there was one time that if I may, I was considering bankruptcy.
And I called the Lending Club and I really – out of all the debts that I had, I didn’t not to discharge that debt. I wanted to try and leave that outside the bankruptcy so that I could pay that back. As it turns out, I didn’t not file bankruptcy, due to some restrictions. The Lending Club people were very, very understanding. They allowed me to catch up my payments into the next cycle without being technically late.
So within a 60 day period, I made two payments it’s just they were together. And they were generous enough, like I said, to show that as being on time. So I found them to be really easy to work with.
Steve: If your situation was different than it is today and you had some extra money, would you consider lending through Lending Club?
Paul: Oh, absolutely. I think it would be a great way kind of pay forward, the generosity that these folks have shown me. Now, of course, there’s always a motive behind it. You do want to make a return on your investment. You wand to make some interest off of it. But, again, I think it’s also an altruistic thing to do and I would definitely consider it should my fortunes change.
Steve: So how long ago was it that you were considering bankruptcy?
Paul: Actually, it was earlier this year, and had some unfortunate property situations. I transferred title of my home to my spouse a year and a half ago for her security, really nothing more than she would have security in case anything happened to me. And they said that the bankruptcy courts don’t look kindly on that. They think that you’re trying to basically alleviate your assets. So even though that wasn’t the case, I still chose not to take a big gamble and pay legal fees up front and then lose the bankruptcy case.
Steve: I’ve seen that happen in transfer property. So let’s say your situation doesn’t change in the next year. Would you go back and revisit bankruptcy again?
Paul: I don’t think so, because I don’t have what I would consider to be insurmountable debt. Most of my – I think my highest balance right now is $10,000.00, which is the balance that I owe the automobile company for the difference between what they sold my car and the difference of what I owed on my original car loan. The other debts that I had were all $2,000.00 and $3,000.00 medical bills. I think the largest one was $4,100.00.
It’s something I think I could manage. And, again, like I said, I definitely do not want to default on the loan that the Lending Club gave, ’cause I wanna try and use that as a source to rebuild my credit, to show that I was able to repay a loan even during my direct financial circumstances.
Steve: Do you know if Lending Club reports to the credit bureaus?
Paul: Yes. Evidentially, they do, and they – like I said, they are affiliated with a bank, Western Bank NA, which is I guess somehow underwrites and helps them with administration procedures in some way. I’m not really sure. But I do know that they do report if you are delinquent or default, just the same as any other loan.
Steve: So let’s talk for a minute about the process of applying for the loan. Was it you went online? You filled out some information. Were you pensive or anxious to watch your loan being funded?
Paul: Well, that was exciting. I knew I had great credit, and I had really never borrowed any large sums of money outside of the car loan. And honestly, I didn’t think I had much of a chance. The loan – when I started the process, and they began to fund the loan, nothing happened for the first few days, and I basically wrote it off and said, “Nothing’s gonna happen.”
All of a sudden, a few hundred dollars would come in from a lender. Then another few hundred. And then a gentleman gave $1,000.00. And then another gentleman gave like $8,000.00. And I was amazed. It was as if pennies were falling from heaven. And I felt really, really stoked when I found out that it had fully funded and really pleasantly surprised.
Steve: Do you mind if we talk for a minute about your medical situation that caused your finances? It sounds like it was a tipping point for you. Is that right?
Paul: Yeah. It’s a number of things. I had some back issues that involved pain clinics and a very expensive series of injections and radiological studies that my insurance basically had reduced the amount paid that they’re allowing on that. And then coupled with that, I suffer from a mental disorder, bipolar disorder, and I have really had a hard time securing and keeping stable employment. I’m in the food service industry. It’s easy to find jobs, but it’s not always easy to keep them when you suffer from depression.
Steve: Well, let me just say that you appear to be dressed in a kitchen attire with a thermometer and other goodies there. So you work in a kitchen and you’re on your feet all day.
Paul: On my feet all day. Another thing that I have is (Laughs) I suffer from arthritis, acute arthritis in my feet joints. I’m all the time having to go and get treatments and painkillers and lots of expensive medications. It just seems like the harder I try, the harder it is for me to get ahead. I don’t make a tremendous amount of money. I’m in a managerial position. My wife works in a retail job making lower to mid management pay. Combined, we probably don’t make $65,000.00 per year, so it’s tough. And we’ve got two sons. One just went to college this past weekend, **** University.
Steve: Wow. So I guess you’re looking at student loans for that?
Paul: Well, absolutely not. We’re actually fortunate that he was able to get a full scholarship on music. Yeah. He auditioned, and he’s quite talented. He basically got himself there fully paid, all on his own. He went to several competitions. He got his name around nationally, regionally, nationally, and somewhat globally. He had people from Europe that know him. He was highly recommended to Vanderbilt. And then he applied and they gave him a full scholarship.
Steve: You must be one proud father.
Paul: Oh, proud and relieved at the same time. Not having to foot that bill I think – Vanderbilt is kinda pricey as private institutions can be. And then I’ve got a 12 year old who’s a middle schooler, typical needs, lots of supplies, lots of clothes, lots of intramural sports and soccer and things that he needs to lots for, and a wife who likes the finer things in life. I just – many days I struggle with just being able to make it through with a positive attitude. I mean, I feel like right now my debts are ruling my life.
And I don’t feel completely despondent because there are people and institutions like the Lending Club out there. I don’t necessarily think that I’ll try and get another loan, because right now I know I wouldn’t be able to qualify. There’s been some activity on my credit report. The car voluntarily repossession is probably a big dagger. One medical bill for only about $500.00 was turned into collections. And that shows up as a bad debt.
Even though I am paying them off little by little – I fully intend to repair my credit. I want it to be like it was. I had nearly 800 FICO score. I walked on the car lot and the guys said basically, “You can have anything out here.” All I had to do was sign and drive. And I made some foolish decisions. I was in the midst of one of my manic cycles in regard to my illness. I had a summer where I purchased a car and, a motor scooter in the same month.
Steve: Well, let’s talk about that. Well, first off, what kind of scooter did you buy?
Paul: It was a really nice Honda 650 – what do they call it? Silver Wing. It’s one of the Maxi scooters. And you just sit on it and pull the handle and drive. And it’s capable of 65 miles an hour plus on the interstate. So –
Steve: Well, let’s talk about the – how being bipolar affects your spending. You mentioned it just a minute ago, but it’s important for people to understand that.
Paul: Yeah. When you’re feeling manic and when you’re –
Steve: And can you tell us what manic is?
Paul: Well, manic is the high cycle. Bipolar consists of high cycles and low cycles, low being depression symptoms, and high being manic symptoms. Pressured speech, manic – when you’re manic, you have pressured speech. You have racing thoughts. You have an inability to control sometimes emotions, spending sprees, reckless behavior, hyper sexual activity. Lots of things occur that are very difficult to control. And for myself, I know the spending was a way for me to calm myself and make myself feel better and give myself self worth because it’s – and I hate to sound so negative, but I’m in a very difficult marriage.
I felt like it was time for me to have something nice. I had never used my credit. I always had great credit. It was always there if I needed it. I said, “Well, you know what? I deserve it.” And I went and put those two vehicles on finance, fully intended to pay ’em back. With my job history, unfortunately, I’ve had I think I counted up the other day 30 jobs in 35 years. So that’s not a very stable history.
Steve: Did you get a physiological rush when you went out and bought? I mean, you talked about how the mania –
Paul: Yeah, in some ways you kinda don’t even realize what you’re doing. You get caught up in it, the spending. It makes you feel good. It makes you feel powerful. It makes you forget your troubles. It’s very much like taking a drug or – it is exhilarating. And then once the payments start rolling in and the statements start rolling in, then everything crashes and you are brought back down to reality, and sometimes it can lead you back down into a depressive cycle. And that’s exactly what I’ve done is basically rollercoastered the whole time.
Steve: And the problem with depression is that once you get in that state, it’s hard to come up with a plan or to see a way out, isn’t it?
Paul: Yeah. And I’ve had lots of people to help with that, and people give me advice. Do a lot of reading on the Internet, a lot of books. I see a physician registry and he prescribes medicine for me. I feel like right now I’m in a very stable state of mind. The past two positions I’ve had have been really nice. I’ve stayed there over a year. I seem to be able to relate to people better. I’m a good Christian person. I’ve always been a churchgoer.
I believe in mankind. I believe that people are basically here to help on another and that we’re all inherently good. It’s just that some of us lose the way. And, unfortunately, evil things happen.
Steve: Well you know that if you need any help, you know how to get in touch with me and contact me and I’m always here for you.
Paul: Absolutely, absolutely.
Steve: And you made a comment when we first approached each other that you feel like sometimes you’re the working poor. Now people say that – some people say that there is no need for healthcare reform. What do you say anything out that? Do you think that there is enough healthcare out there?
Paul: Absolutely not. I think there is definitely a need for reform in that insurance companies should not be given the power to govern whether somebody gets better or not, or lives or not. That’s basically what’s happened through their decreasing the amount of paying of these expenses. And you pay heavily into these risk pools and thee insurance companies. And the sicker you get, the less they pay. And I believe that they’re necessarily has to have some policing of the insurance companies.
I don’t necessarily think that there needs to be more insurance available. But I do think that the rates need to be reasonable or the average person. I think that the services that are covered need to be increase.
Paul: So have your premiums gone down. No, the premiums have gone up, and –
Steve: And the coverage has gone down.
Paul: The coverage, and the types of services that are offered and covered are less. And it’s basically like I said, the sicker you get, and especially if you have a chronic situation that requires maintenance medication, such as mine, they can even cancel your health insurance. I live every day in fear of that. God forbid if I ever had a terminal disease or heart attack or something that came up that needed immediate care, the first thing I’d think about was which hospital I go that’s gonna take Medicare or Medicaid to be able to help me pay for it. I guess that would be Medicaid.
Steve: Are you on Medicaid now?
Paul: No, but my children have been. At one time, we had to put our kids on Medicaid because I didn’t have insurance for a while. My wife wasn’t working at the time and –
Steve: And what was that experience like?
Paul: Well, I tell you, it was very humbling. Being on public assistance is not something that people in my family have been used to. It something you always – stereotypically, you see minorities and illegal aliens and other people end up being the ones in those offices. And here I am a middle aged white guy just really in a very difficult situation, very humbling, and very, in some cases, demoralizing. But it was there when we needed it.
We only needed it short term and it was wonderful. The state of North Carolina in particular was wonderful in terms of providing insurance for my kids .they never questioned any of the payments for anything, and the dignity was uphold with the utmost.
Steve: Thank you. One of the things that I have just recently done is traveled around the entire northeast of the United States. And I’ve been talking to people about the credit and debt issues. And one of the questions that I’ve asked almost everybody is I come in contact with so many people every day that are struggling and have problems. And they often kind of suffer in silence. They feel like losers and rejects and alone. What advice do you have for people that are feeling like that?
Paul: Well, I just have to say lean on your faith. If you do have a faith in a higher power or some type or religious support system, definitely begin there. Always remember that you’re not your illness, and you’re not your debts. Your self worth is not determined by either or diagnosis or the amount of debt that you have. Those are simply choices that were made, and choices that you have to make to get out of those situations.
You just need to keep your chin up. For me, it is a struggle, won’t say that I’ve mastered any of that. I do know that there’s help out there. Please, make yourself available to it. Get on the Internet, get o the telephone. Public Access channels on television often have information on local help for debt and debt situations. So seek out help.
Steve: Have you ever been homeless in your life?
Paul: Never been homeless, not to that point. But I have spend a few select nights in my car. That wasn’t fun. I’ve had to forego dinner invitations because I didn’t have enough to pay for the check and I’ve had to forego a lot of leisure actives, haven’t had a vacation in six years. It leads to a lotta stress.
I do play music. I play a musical instrument, and I sing an I –
Steve: What do you play?
Paul: I play trumpet, and sing in a local oldies sort of a retro band. We have a lot of fun and we make a little bit of extra pocket change doing that.
Steve: So if you could take a magic vacation, where would you go? What would you do?
Paul: Probably go back to – I’d like to go to Disney again. Disney World was a lotta fun. I enjoyed Mexico. Been there a while back. Anything where there’s good food and nice people and clear water to swim in.
Steve: Is today a good day for you?
Paul: Today’s been a great day, yeah. A small victory for me is just being able to get through the day without punishing myself or getting down on myself or saying harsh words to someone else, feeling like I did a good job and I did the best that I could. I work with elderly people, so me, I get a real big kick out of being able to enrich their lives and talk to ’em.
I spoke with a lady today and said goodbye to her. She was leaving our facility, and she’s a week and a half shy of her 90th birthday. She has terminal cancer. And I told her that I was gonna be praying for her and that I was honored to have known her for the short time that I’ve known her, and that she had touched my life. It was a very poignant moment for both of us. That’s the way I am. I feel very compassionate towards other people and I hate to see other people suffer.
Steve: Well, Paul, I think that everybody who is listening to your words right now, who can hear your voice feels lucky to have met you and really appreciate your honesty and opening up and sharing some very intimate details.
Paul: Thank you.
Steve: It will help a lot of people and I appreciate it very much.
Paul: Thank you. I appreciate it, Steve.