Lending Club offers investment opportunities for lenders with peer-to-peer loans, plus new lenders can receive a 2% cash bonus when you join the Lending Club peer investment network for free.
Lending Club matches borrowers with good credit to lenders who want to earn higher interest rates than standard bank accounts can offer.
Lending Club investors can select specific borrowers based on their credit history and income profile to control the risk of your investments.
You can even earn a 2% Lending Club cash bonus when you join Lending Club as a lender today and invest within 45 days.
Simply sign up through this Lending Club Promotional Link to receive a 2% Lending Club sign-up bonus.
Read more about this Lending Club Bonus Offer for more details on earning your 1% Lending Club lender bonus.
Investing in Lending Club
There are 2 options when investing in Lending Club peer loans or notes. You can either browse individual notes or invest with LendingMatch, which helps you build a portfolio based on your risk profile and the average interest rate return you would like to earn.
LendingMatch is the quicker option, as it offers a wide range of investment return and risk strategies with less research required.
However, if you wish to browse the specific criteria of each borrower and the details of their credit history, investing in individual notes provides much more control over your investment strategy.
You can review an individual borrower’s credit history, income, reason for borrowing money, and ask borrowers questions to assess their financial situation and ability to repay the loan.
Lending Club borrowers are rated from A to G, with each letter grade also divided from 1 to 5, so A1 borrowers are the top-rated borrowers while G5 are the lowest.
A-rated borrowers provide the least risk and lowest interest rate returns, while G-rated borrowers provide the highest interest returns on your investment, but also pose the most risk.
However, it’s important to keep in mind that Lending Club only accepts borrowers with a FICO credit score of at least 660, so even the worst borrowers on Lending Club are credit-worthy and qualified to receive a loan.
You can invest as little as $25 per note and spread your investments across multiple borrowers to help minimize your risk and achieve the best possible interest rates.
The entire investment process is easy via the Lending Club interface with intuitive features to help you quickly assess borrowers and fund your loan investments.
Assessing Lending Club Borrowers
To Start Investing in Lending Club, I chose to only lend money to A-rated borrowers, as I’m more interested in having my entire investment repaid than the potential for a higher return at more risk.
It seems that with an investment of $500 to $1,000, even just 1 or 2 loan defaults could easily eat away your entire profit, so I’d rather be safe than sorry at this time with my investment strategy.
I individually selected my loan notes and reviewed each borrower before investing, as I want to be sure each borrower I invest in has a legitimate ability and strategy to repay their loan.
If a borrower is $25,000 in credit debt, has a home mortgage, car payments, child support, etc., and is looking for a $10,000 loan for a motorcycle, then my feeling is that the motorcycle payments would be the first to cease if the borrower runs into financial trouble, so I’m a bit leery about lending my money to this type of borrower.
I look for things like how much the monthly loan payment will be, as I know from personal experience that a $200 to $300 monthly payment is manageable, but a $600 monthly payment can be overwhelming and easier to let go, especially when it’s not for a necessity in life, like a mortgage payment to keep your house.
I also check for any past delinquencies that could indicate recent financial troubles as well as excessive credit balances, and if there are any problems, I won’t invest in that borrower.
I read all of the questions and answers provided by the borrower as well, just to see if they back up their information and seem willing to properly communicate their situation.
Then I simply make an assessment based on this information and go with my gut feeling on the borrower.
If they seem like they have the ability and intention to repay the loan and their credit data establishes their positive credit history, then I’ll select them as a borrower as long as nothing stands out against them in my mind.
I’ll still only invest $25 at most in any single borrower to protect my investment, even if they have an incredible credit rating, as I’m just not that willing to take a high risk with peer-to-peer lending investments at this moment in time.
Maybe I’ll look to get more aggressive with my Lending Club loan investments in the future, but for now I’d rather play it safe and make sure I at least get back what I invested and hopefully a little extra as well.
Sign up for your Lending Club Lender Bonus today to get a free 2% rebate to start investing in Lending Club peer-to-peer network loans.
Take advantage of the Lending Club investment network to earn a high interest rate on your lender investments, plus get a free Lending Club bonus for 2% when you register at Lending Club today.