LendingClub.com?

[JerseyMVP]

I just came across the site LendingClub.com. I am very intrigued by this site and the concept. If anyone hasn't heard of it, basically it is a social lending site that connects borrowers to lenders. Investors can search for people in need of money and invest any amount of money they wish into that borrowers financial need.

I was just wondering if anybody has used this site before? How safe is it? I will be getting so extra money soon and would like a solid investment and I like this idea if it can offer me guaranteed returns.

Also, what do you think of this idea... I am currently in college. I am getting by without student loans but I could really rack them up if need be. The average rate on a student loan is 8-10%. What if I took out a student loan and invested that money in this site with return rates from 15-20%? My uncle used to do these types of things back in the day.

I am just looking to see if anybody has used this and if I can expect guaranteed payments? What happens if somebody defaults on their loan? I lose my money?

[David3]

I was just wondering if anybody has used this site before? How safe is it? I will be getting so extra money soon and would like a solid investment and I like this idea if it can offer me guaranteed returns.

I've been using Lending Club for about a year and a half and sustaining an investment return of 8.5 percent.

There is no such thing as a "guaranteed return" investment other than a savings account or government bonds (and even those are merely extremely low risk). In investing with Lending Club, the two primary risks are (obviously) default of borrowers, and the secondary risk that Lending Club as a company will itself fail. It's possible that if Lending Club fails all investors will lose all their money. Although they are still not making a profit, in my opinion Lending Club has an extremely good chance at becoming a viable company in the future. You must, however, do your own homework and consider this risk.

Also, what do you think of this idea... I am currently in college. I am getting by without student loans but I could really rack them up if need be. The average rate on a student loan is 8-10%. What if I took out a student loan and invested that money in this site with return rates from 15-20%?

Lol, no. There is zero way you would be able to sustain a 15-20 percent return through Lending Club. 15-20 percent returns are almost impossible to sustain over the long term for ANY type of investment. 8-12 percent is a more reasonable assumption if you do all your homework, only loan to reliable-looking people and use the trading platform well. If you are looking for an arbitrage-type situation with Lending Club, a better bet would be to take out zero-percent balance transfers on credit cards, then reinvest the money into Lending Club. That way, the only interest you would be paying for the loan would be balance transfer fees, which are from 2-5%.

I am just looking to see if anybody has used this and if I can expect guaranteed payments? What happens if somebody defaults on their loan? I lose my money?

No, you cannot expect guaranteed payments, and yes, you lose your money if someone defaults on their loan. The way to mitigate this risk is to loan the smallest increment (25 dollars) to a large number of different people. For example, my portfolio has about 7000 dollars spread in 25 dollar increments. I experience a default every two or three months, but due to my diversification it means I only lose 25/7000 = .3% of my investment (actually not even that because they have usually made a few payments first, but you get the idea).

[s101elvis]

I am familiar with the site, I haven't used it but have heard of others that have loaned out money with some good returns.. It looks promising, but with that said when your dealing with real money with real people be careful do your homework, because as the old proverb says a fool and his money is soon departed and you don't want to be one of those people.

[Keith.S]

Is it applicable for US citizen only? I saw it needs Social Security Number.

[jawzishere]

It's a fantastic website. The best possible way for any small time investor to invest money and make great returns.

I would strongly disagree with the other poster that consistent 15-20% are almost impossible. Definitely not likely but certainly achievable.

I've sustained over 17% for a year now.

It all depends on your strategy and who you pick to loan to. There's ways to screen through the loans to pick the ones with the best chance to not default.

That being said, since I've invested only a few hundred, one default on a single note would wipe out all my gains.

Definitely not the best idea for arbitrage since after considering for the default rate you could with reasonable consistency achieve only 9-12% earnings.

It's a gamble though, you might not have a single default and could potentially earn 17% but probably not worth the risk.

I would certainly recommend getting started with them investing spare money for sure and just build your account over time versus loaning to invest.

[Southern_Lenders]

Anyone from the US can borrow from LC, BUT NOT everyone can become an investor. You must live in certain states, because the SEC wont approve all states to take part, or some BS like that. Alabama is one of those states that cant.