Lending Club

Lending Club Review – Peer-to-Peer (P2P) Financial Lending


Lending Club

Published or updated: July 29, 2015

lending club logoLending Club bills itself as the world’s most popular peer-to-peer (P2P) lending network. As a classic example of the emerging sharing economy, the platform connects thousands of individual and business borrowers with regular people willing to fund their loans. In doing so, it eliminates the need for borrowers to approach traditional banks and credit unions – whose lending standards may be much more stringent than Lending Club’s – to obtain financing.

For investors, Lending Club offers the opportunity to create diversified portfolios that aren’t directly tied to bond markets. Its investments offer better yields than CDs, money market accounts, and savings accounts, though it’s critical to note that the investments are not FDIC-insured.

Lending Club competes with other P2P lending platforms, including Prosper and Peerform, as well as online direct lenders like Avant (which doesn’t follow the P2P model) and alternative business lenders (also not P2P) such as OnDeck and Kabbage.

Like Prosper, its largest rival, Lending Club uses funds from its lenders to make unsecured personal loans to individual borrowers. These loans range from $1,000 to $35,000 in size and have terms of 36 or 60 months. Borrower interest rates range from about 6.75% to about 30%, depending on credit score, credit history, and past borrowing record with Lending Club. Lending Club doesn’t tie its rates to an index such as Libor, but it advises that rates may rise or fall depending on “market conditions” – in other words, prevailing interest rates.

Unlike Prosper, Lending Club also uses its lenders’ funds to make unsecured business loans with terms of 12, 24, 36, 48, or 60 months and principals of $15,000 to $100,000. For business loans, borrower interest rates range from about 5.9% to about 30%.

lending club investor borrowers

How It Works for Investors

As a Lending Club investor, you can view Notes, or shares of unfunded loans that can be reserved for possible investment. You can reserve Notes in increments as low as $25. It’s important to note that Notes represent shares in first-issue loans that haven’t yet been funded, not already-funded instruments on a secondary market. Some Lending Club loans don’t receive enough funding to originate. If you reserve Notes in a loan that doesn’t originate, you don’t lose anything – you just get your money back to allocate to Notes in other loans.

The $25-per-loan investment threshold makes it easier to create a diversified loan portfolio with a relatively modest investment. According to Lending Club’s historical data, investors with diversified loan portfolios (exposure to 100 or more loans and a mix of business and individual loans) can expect to earn annual returns between 5% and 8%.

Annual default rates range from less than 1% for the highest-quality loan grade (A1) to about 15% for the lowest-quality loan grade (G5), with average annual loss rates on a diversified portfolio ranging from about 2.5% (in 2014) to 7.5% (in 2009). It’s important to note that loans with higher yields come with a greater risk of default compared to loans with lower yields. Fortunately, when you look at an individual loan’s listing, you’ll see its estimated default risk, making your risk calculation that much easier. While Lending Club stresses that 99.9% of diversified loan portfolios produce positive annual returns on a consistent basis, you do risk loss of principal when investing here due to lack of deposit or investment insurance.

lending club investor performance

Manually Selecting Loans and Investing

If you want to evaluate each loan you ultimately invest in, you can manually browse through loan listings. To narrow your choices, filter by such criteria as loan purpose, loan grade, borrower credit score, loan size, time left, rate, and term. When you view an individual loan’s listing, you see detailed information about the loan, including all of the filtering criteria, as well as the monthly payment, funding percentage, and number of investors currently funding.

Listings also contain information about the borrower, including his or her credit score, Lending Club grade, credit history, income, employment status, and homeowner status. And if the borrower chooses, he or she can write a detailed personal statement and loan description. You can’t change settings so that you only view personal or business loan listings at any given time, but each loan’s heading (“Personal” or “Business”) makes it easy to distinguish between the two types.

If a particular loan’s listing meets your investment criteria, you can select how many $25 Notes you want to buy and transfer funds from your Lending Club account. If your loan isn’t funded, you’ll find out within 14 days (or before, depending on when the listing expires). Funds earmarked for loans that don’t originate are returned to your account, where they become available for new investments.

lending club investor screen shot

Automated Screening and Investing

If you don’t have the time or patience to manually screen loans, Lending Club has an automatic screening and investing tool that allows you to quickly invest in dozens of loans without approving each one. The process is simple: You set a lower limit on the loan grades you’re willing to accept, and Lending Club uses the cash in your account to make equal-sized investments in each new loan that’s above that limit. For instance, you can choose to only invest in loans graded A and B, or expand to include loans down to F or G, the lowest rating. If you want more control over the process, you can manually set your desired interest rate range, such as 10% to 15%.

Lending Club’s automatic investing tool isn’t instantaneous. The speed at which it invests your account’s cash depends on the availability of loans that meet your criteria and the relative amount of cash in your account. Lending Club prioritizes investments for accounts with more cash, so if you have a small balance, you may find yourself at the end of the line. Likewise, if you have narrow criteria – such as only accepting loans graded A or B – you may have to wait days or even weeks to be fully invested due to a lack of supply of suitable loans.

lending club automated investing

Receiving Funds

Lending Club investors receive payments at any time of the month, usually within three business days of debiting from the borrower’s bank account. Your payment is proportional to your total stake in the loan, less a 1% annual service charge. In other words, if you invest $500 in a loan with a 10% interest rate, you receive 9%, which is $45 annually or $3.75 per month. Prosper and Peerform also take a 1% service charge for each loan issued. You also receive a proportional amount of any late fees charged to a borrower’s account, if they’re ever paid.


To invest with Lending Club, you need to be at least 18 years old, have a valid Social Security number, and meet other financial criteria depending on your state of residence.

Lending Club accepts investments from residents of 30 states. The only lenders who don’t need to meet income or net worth criteria are California residents who limit their total Lending Club investment to less than $2,500 or 10% of their net worth, whichever is lower.

All others must meet strict financial criteria: Either gross annual income of at least $70,000 and a total net worth (not including real estate, home furnishings, and automobiles) of at least $70,000, or a total net worth (with the same restrictions) of at least $250,000. California residents must have gross annual incomes of at least $85,000 and total net worth of at least $85,000, or a total net worth of at least $200,000. Kentucky residents must be accredited investors.

To be considered an accredited investor by the U.S. Securities and Exchange Commission (SEC) , you must meet at least one of the following criteria:

  • Consistent annual income of at least $200,000 ($300,000 for a household) in the past two years
  • Net worth of $1 million or more, either on your own or including your spouse’s assets, and excluding the value of your primary residence
  • Control of a trust with at least $5 million in assets
  • Control of an entity, such as an LLC or S-corp, in which all stakeholders are accredited investors

And regardless of where you live, you can’t invest more than 10% of your net worth at Lending Club.


To apply for a Lending Club investor account, you need to provide your current contact information, Social Security number, and bank account information (for making deposits and withdrawals into and out of your Lending Club account). Lending Club uses the information you provide to verify your identity and bank account, a process that typically takes one to three business days.

Once approved, there’s no minimum deposit to fund your account, but you need at least $25 to buy a Note. Lending Club doesn’t let you buy Notes unless you have sufficient funds in your Lending Club account. To ensure that there’s always funding for your account, you can set up automatic deposits from your tied bank account in the amount and frequency of your choosing.

lending club investor

How It Works for Borrowers

Loan Characteristics and Restrictions

If Lending Club chooses to approve your application, it assigns a loan grade – measuring the likelihood that you’ll default on the loan – and interest rate to your loan. Loan grades include a letter (A – G) and number (1 – 5).

Individual borrowers rated A1, the highest-quality grade, can expect interest rates of around 6.75% on the 36-month loan and 7.30% on the 60-month loan. Those rated G5 – the lowest rating – can expect rates of 30% on the 36-month loan and 28.70% on the 60-month loan. Generally, borrowers with good or excellent credit can expect rates below 15%, while borrowers with mediocre credit can expect rates between 15% and 30%. Grading and interest rates are similar for business borrowers, though the highest-rated borrowers enjoy slightly lower rates (5.9% and up).

lending club risk reward


Once your loan has been approved and assigned an interest rate, it appears in Lending Club’s listings and can begin attracting investment. Your listing expires exactly 14 days after approval. If it hasn’t attracted at least 60% of your requested funding amount within that time, you have two choices: You can accept whatever funding your loan did attract and immediately re-list a smaller loan for the difference, or cancel the loan altogether and reapply.

If you do receive at least 60% of the requested amount, your loan automatically originates in the amount you received. (For example, a loan with a requested principal of $10,000 will originate with a principal of $7,000 if it receives 70% funding.) You’ll receive funding for the funded amount in your bank account within one to four business days, depending on your bank.

On personal loans, an origination fee between 1% and 5%, depending on your loan grade and loan term, will be added to your principal amount and begin accruing interest. For instance, a $10,000, 36-month loan for a B-rated borrower would carry an origination fee of 4% or $400. Origination fees on business loans range from 1% to 6%, depending on your grade (term doesn’t matter). These fees are deducted from the total amount of your loan, so the actual amount you receive may be up to 6% lower than your requested amount.


Lending Club requires monthly repayments of a fixed amount. It automatically debits your bank account on the same day of the month, emailing a reminder a few days before to ensure sufficient funds in the account. If you’re more than 15 days late due to insufficient funds, you’ll be charged the greater of $15 or 5% of the total loan payment as a late payment fee, which doesn’t reduce your principal balance.

Loans more than 30 days past due may be reported to a collection agency. You can manually make additional payments or pay off your loan in full at any time with no prepayment penalties.


Personal Loans
Though Lending Club doesn’t release all the details of its proprietary application and screening process, borrowers with credit scores below 640 generally aren’t eligible. Additionally, borrowers must be at least 18 years old, have U.S. citizenship or long-term residency, reside in one of the 47 states where Lending Club operates (residents of Idaho, Iowa, and Maine are not eligible), and have a verified bank account. To verify your bank account, Lending Club makes two small trial deposits and asks you to confirm their amounts in your Lending Club account.

When evaluating an application, Lending Club looks at factors like credit score, credit history (length and activity), debt-to-income ratio, employment status, income, and homeownership status. Having a higher credit score, lower debt to income ratio, steady employment, and solid income increases your chances of approval and reduces your loan’s interest rate.

Business Loans
Business borrowers are subject to the same geographical, age, and citizenship requirements as individual borrowers. Additionally, business loan applicants must own at least 20% of a business with $75,000 or more in annual sales, have been a 20%-plus owner for at least two years, and be authorized to borrow on behalf of the business.

When evaluating an application, Lending Club considers factors such as the business’s credit utilization, past payment history, credit history (length and activity), and cash flow. Businesses with longer credit histories, more robust cash flows, and timely past payment histories are more likely to be approved and enjoy a lower rate.

Application and Approval

To apply for a Lending Club loan, you need to provide basic contact information, bank account information, and your Social Security number. You also need to specify the desired amount, term (36 or 60 months), and purpose (such as debt consolidation, home improvement, and medical expenses) of your loan.

Lending Club verifies your bank account by making trial deposits, which can take one to three business days. It then conducts a thorough credit check, including a thorough evaluation of your personal or business credit history, using one or more credit scores and reports from the major credit reporting bureaus.

If you’re an individual borrower, Lending Club also verifies your employment status and income by requesting pay stubs or income tax statements and contacting your employer. This process can take up to 14 business days, though Lending Club says most applications are either approved or denied within seven business days. If you’re self-employed, Lending Club may request more documentation around your income and finances, lengthening the process.

lending club borrower

Key Features

Lending Club’s additional features include:

  • Retirement Accounts. You can set up a Lending Club account as a traditional or Roth IRA. Having a retirement account with Lending Club doesn’t affect your ability to have a regular account, meaning you can set up multiple Lending Club accounts if desired.
  • Custodial Accounts. If you’re the parent or legal guardian of a minor child, you can also set up a custodial Lending Club account and control it until the child reaches age 21.
  • Note Trading. Lending Club has a partnership with Folio Investing that allows investors to buy and sell existing Notes on a secondary market. Depending on the borrower’s Lending Club rating, general credit history, and repayment history with Lending Club, Notes may trade at a premium or discount to regular face value ($25). To execute Note trades, you need to sign up for a Folio Investing account, which you can do through Lending Club’s website. All transactions incur a 1% commission, payable to Folio.
  • Multiple Outstanding Loans for Borrowers. Lending Club borrowers can have up to two outstanding loans at once. Individual loans are capped at $35,000, but you can have up to $50,000 in outstanding balances between two loans. Before applying for a second loan, you must make at least six consecutive on-time payments on your first loan. For first loans with terms of 60 months or principal balances greater than $20,000, you must make at least 12 consecutive on-time payments before applying for a second.


1. Lower Interest Rates for Borrowers

Though many factors influence Lending Club’s interest rates, its rates tend to be lower for borrowers with similar risk profiles. For instance, Lending Club’s D-rated borrowers can expect annual interest rates between about 19.3% and 21.6%, depending on sub-rating. By contrast, Prosper’s C-rated borrowers – the equivalent credit risk profile – can expect annual interest rates between about 19.1% and 23.00%, depending on credit history and past Prosper borrowing history. And Lending Club’s overall rate range of about 6.75% to about 30% is more favorable to borrowers than Prosper’s 6.75% to 35% range.

Avant’s loans are much more expensive across the board, with effective annual rates ranging from about 30% to 90% (though shorter terms may reduce borrowers’ total interest payments on that platform). In fairness, Avant caters to borrowers with poorer credit.

2. Minimum Personal Loan Is $1,000

As an individual borrower, Lending Club lets you take out loans as small as $1,000. This can be useful if you need extra cash to pay down a credit card or medical bill, but don’t want to be saddled with the high monthly repayment that a larger loan would bring. With Prosper, you can’t get a loan smaller than $2,000.

3. Business Loans Available Up to $100,000

Lending Club offers loans of up to $100,000 to entrepreneurs and established business owners. Business loans aren’t available on consumer-focused platforms such as Peerform, Prosper, and Avant.

4. Lower Origination Fees Than Some Competitors

For some borrowers, Lending Club’s origination fees offer a better deal than other online lenders. For instance, Lending Club borrowers with an A rating pay origination fees between 1% and 3% on 36-month loans, depending on their sub-rating. At Prosper, A-rated borrowers pay origination fees of 4% for loans of the same term length.

For 60-month loans, A-rated Lending Club borrowers pay a 3% origination fee, while similarly rated Prosper borrowers pay 5%. For investors, Lending Club’s 1% service fee is identical to the 1% service fees charged by Peerform and Prosper.

5. Personal Loan Balances Up to $50,000

Though Lending Club caps each personal loan at $35,000, you can have up to $50,000 in outstanding loan balances if you’re approved for a second loan. This sets Lending Club apart from Prosper, which also lets you have two loans but limits your total outstanding balance to $35,000 at any given time. And Avant only lets you have $20,000 outstanding at once.

6. Lower Default Rates

Among competing P2P platforms, Lending Club historically offers the lowest rates of borrower default. Since 2010, its default rate has been anywhere from 0.5% to 4% lower than Prosper’s. This means that you may see fewer losses as an investor.


1. Notes Only Available in $25 Increments

Lending Club requires you to buy Notes in increments of $25, with a minimum investment of $25 in each loan. In other words, you can invest $100 in a particular loan, but not $95 or $105. This limits your flexibility relative to other P2P lending platforms such as Prosper, which lets you invest in any amount above $25.

2. Geographical Limitations on Availability

Lending Club is available to borrowers in 45 states and investors in 30 states. Its coverage is a bit thinner than some competitors’: Prosper is available to borrowers in 47 states and investors in 31 states plus the District of Columbia, and Peerform is available to accredited investors in all 50 states.

3. Financial Restrictions for Investors

Lending Club’s financial restrictions for investors – limiting total investments to 10% or less of net worth and requiring minimum net worth or income thresholds – excludes some potential lenders from participating. While Prosper investors face similar restrictions if they live in states that impose them by law, it doesn’t impose them across the board like Lending Club. For investors with modest incomes or net worths, this means that Prosper may be the only option.

4. It’s Difficult Not to Accept Partial Funding

If your loan attracts investments of at least 60% of your requested amount within the 14-day listing period, it automatically originates in that amount. Loans that attract less than 100% of requested funding are said to be partially funded. During the application process, there’s no option not to accept partial funding above the 60% threshold. To get around this, you have to directly contact Lending Club’s customer service team at least one day before your listing expires. This contrasts with Prosper, which lets you specify your desired funding threshold – from 70% up to 100% of the requested amount – during application.

Final Word

Like other ambassadors for the sharing economy, peer-to-peer lending platforms such as Lending Club increase efficiency and transparency by cutting out the middle man – in this case, banks and other traditional lending institutions. Like the ridesharing companies forcing the taxi industry to rethink its business model, P2P lenders could force positive change in a financial industry that’s had trouble making new friends since the financial crisis.

And that’s not the only potential benefit. By directly connecting regular people willing to invest or borrow from their neighbors, P2P lending establishes personal connections that can’t exist between traditional financial institutions – even community banks and credit unions – and their borrowers. Stronger, more constructive communities could be the real legacy of Lending Club and its peers.


Lending Club is the most popular P2P lending platform around, connecting thousands of individual and business borrowers with willing lenders. Borrowers enjoy somewhat lower interest rates and higher borrowing limits than competitors such as Prosper and Avant, but geographical restrictions and an inflexible partial funding requirement are unattractive. For investors, lower default rates are offset by financial and geographical restrictions that limit participation.


4.3 out of 5 stars: Lending Club’s higher borrowing limits and business loan availability enhance its attractiveness for borrowers, while lower default rates are good for investors. Negatives include financial thresholds for participating investors and partial funding issues for borrowers.

  • anita

    What’s stopping any ill hearted greedy person to borrow your money and never return it. Nowadays no one uses a conscience. I don’t trust a random stranger to do the right thing, there are good ones out there but the bad out number the good. I’d say invest it in a bank (it’s FDIC insured) or a 401k.
    It’s almost like you have to go into this lending group with the mindset that you’ll be ok if you never see the money again. Might as well donate it atleast it’s going to someone who’s not out to scam you.

    • Jason


      You are right. There are bad sorts out there and there may be some who only want to defraud you of your money. You’re forgetting one important thing though. Defaulting on this type of loan is not without penalty. If a borrower defaults, their credit rating will tank.

      So far, I’ve only had $97.00 dollars default over the 2 years I’ve used Lending Club, I’ve purchased about 170K in notes, and I’ve received thousands of dollars in interest as a return on my investment.

      Yes, I think there is risk involved with investing in Lending club, but I think that risk can be managed.

      • tj

        what do you mean by 170K in notes?

    • Twatkinsgroup

      Anita,you might want to study or do a little bit more research on this subject.There is a little risk in all investments and ask alot of the baby boomers what happen to their 401k’s in the past decade.If your interested you can check.Some of the videos on youtube or top documentaryfilms web site.They have some good documentaries on this subject.Just go the economics sections.I think if more people learn to mange their finances and how money and banks work.The risk can be managed better.

  • http://www.artificialrobot.com Sean

    I like the concept of these sites. It seems like, if nothing else, it would be a fun experiment if you had a bit of disposable cash. Sadly all of the sites like this I’ve seen aren’t setup to allow investors from Texas, so no love for me.

    • Phil

      They’re not strict about where you’re from ;) wink wink!!

  • Mike

    I thought about getting an account when they had their $64 bonus last month. Wish I had.

  • Gina

    Interesting idea. I guess it is an alternative to traditional lending. I still think that it is better to save up for big purchases, and have a solid emergency fund available for true emergencies–that way you are never forced into a borrowing situation.

  • http://www.yourfinances101.com/blog David/Yourfinances101

    Its quite a concept, and it sounds interesting, but I think I’d have to think real hard before diving in–I would just be concerend about the risk.

    Just trying to be honest.

  • Kendra

    This is interesting but sounds to risky for me.

  • http://www.chasingprosperity.com thriftygal

    I’d have a hard time justifying making money off people in need. Like someone else said, if I had the extra cash I’d rather donate. That being said, a conscientious alternative would be Kiva which connects you with small scale enterprenuers (i.e. self employed people) with the aim of alleviating poverty. It’s like helping someone help themselves.

    • rdhin NY

      My husbans and I recently borrowed from LC and we are not poverty stricken nor down and out. CC debt got ahead of us. We are thankful for the loan and a finite payoff term at better rates than our bank could give us.

  • John

    thriftygal this is not about charity it’s about investing. The banks make money this way all the time. Why shouldn’t we?
    I wouldn’t pump a lot of money into this due to the risks, but I did just open a lending club account with a little bit of cash just to play around with it.

    • http://www.chasingprosperity.com thriftygal

      Well, because any rate would be an added burden for someone already exhausted financially, physically, emotionally with medical expenses. It’s a personal choice I guess. Now for the ones who are trying to finance their wedding or kitchen remodel, I’d say go right ahead.

      • Kyle


        Your loan may give someone the break they need (in interest rate) if they are trying to consolidate to get rid of credit card debt.

  • Mac

    I went ahead and tried it out…lending $25 of someone else’s money to a borrower was safe enough for me. Not sure if I’ll start to put my own money into it anytime soon, but definitely an interesting concept and an average rate of return of 9%+ sure beats the market.

  • Todd

    I would have appreciated a disclaimer in your post about the restrictions for investors. Living in Ohio means I’m out of luck to begin with, and the other investor requirements may come back to bite a lot of people later.

  • http://www.vanpaul.com Greg G

    The risks at lendingclub are not as high as one might expect.
    Lending Club divides your choices into A, B, C, D, or E rated borrowers. (“A” being the highest fico’s and lowest rate of return)
    Their A, and B borrows have something like less than 1 percent default rate.
    Compare this with the volatility of the stock market and in my opinion the risk is actually quite minimal on lending club. I am seeing a 10 percent return even though i am restricting my lending to only A and B class borrowers. This is a rate that compares favorable with the S & P 500 10 year average.

    i have only invested a few hundred dollars into lending club so far, but im quite prepared to convert my account into an Roth IRA, where i will devote about 50% of my savings to LendingClub. I feel a LOT better investing in borrowers who would otherwise be pillaged at a much higher rate at our unethical big banks and credit card companies. Believe it or not Lending Club is actually a much more ethical model than either the stock market, or traditional banking for that matter. Big banks, along with the stock market, operate with utter disregard and apparent disdain for the welfare of the nation as a whole. Amen to lendingclub.

  • Efren

    What an innovative way to invest and borrow money. I guess what we must have here is a clear conscience and an honest disposition if we are to borrow so that others would also benefit from this altenative loan facility. Let us help one another. Kudos to the people who thought and made this possible.

  • Linda

    Lending club isn’t actually available in Canada- nor have I heard of any other peer-to-peer lending operations similar to that which are currently up and operational.

  • Dale Wyrick

    I read the rules for being an investor. They expect you to have a significant working capital and a large sum of assets to participate.

    maybe when I am better off financially I will come back to the program. For now, I do not qualify.

    I recommend everyone read the “fine print” before participating.

  • http://money-seeds.blogspot.com Joy

    I love the idea of Lending Club and I’ve heard a lot of good things. It seems like a wonderful idea to me. Unfortunately I live in a state where I can neither participate in the direct market nor the note trading platform. Bummer.

  • http://madsaver.com Mac

    I just glanced at the “current State and Financial Suitability conditions”, but they don’t check if you qualify…as long as you live in one of the required states, it seems that you can invest just fine.

    • Name

      Just a pro tip, they don’t verify your address if you are an investor.

  • Dan

    I have about $500 invested with Lending Club. I started out with only $50 ($25 mine/ $25 their bonus) I’ve been upping it at $25 per month, just to experiment and see where it goes. So far it’s been great. I’m averaging at 9.66% rate of return, and there have been no late payments are defaults. One loan got paid off in full early. I’ve kept my loans to low risk A loans and a few B grade loans.

    The one big downside I see is that this money is not liquid. You cannot cash out quickly, and it will take 3 years to get all your money and interest back. It’s a longterm commitment. I’m considering making mine a Roth IRA and letting Lending Club take up my bond portion of my portfolio.

    • http://madsaver.com Mac

      Good point. It would take a long time to recover your investments as the borrowers have a commitment to pay back the loans, which could take some time. I don’t see this as a disadvantage however, as it forces the investor to be patient and avoids the desire to move money around too much (as I’ve done with my 401k in the past).

  • Efren

    Oh, I almost have forgotten way back in the Philippines I’ve joined a lending club similar to this and the downside really is the period where your money is locked for a certain period i.e. 3 years. The advise i can give is to put only the real disposable money.

  • Missy

    Hi, Erik:

    Just following up on this article. I wanted to know if you’re currently (or did ever) use the Lending Club as an investor? If so, can you update and let us know how it fared for you.

    I’m thinking of trying them as a micro investor with small loans, but am looking around for more feedback from other users.

    Also it seems several things have changed since you last wrote this article, I read on the site one can now sell their notes for quicker liquidity.

    Look forward to your reply.


    • http://investorjunkie.com Investor Junkie

      Hi Missy,

      I’ve been a Lending Club investor for over 18 months now. I have over $5k invested and getting 12.40% NAR. If interested I review Lending Club on my site.

  • Tom

    Lending Club can be a great source. But it can take a while for bids to come in. Before going this direction I suggest trying for a regular loan first. If you are confused on where to start i would try. lifehousefunding.com they were able to get me a 25k loan at 9.25%. It only took about a week.

    • Tillmangirl72

      that sounds high..

  • Carter

    I REALLY like the P2P concept. The only issue is when borrowers don’t perform. I recently learned about http://www.money360.com, and I love this model because it blends the P2P model with secured real estate lending. Same rates as other P2P sites…but you actually get secured collateral! Smart idea.

  • http://guaranteedinvestmentcertificate.blogspot.com/ GIC

    I am newbie in blogging ( prefer crunching numbers :) ) but I really like the idea of p2p lending so I will definitely need to spend more time networking. So here is the story:

    Partner and me ( accountant and engineer ) are raising capital for a small RE investment fund ( up to $400K ). about 30% of the fund will be own by us and rest will be funded from outside. We both have excellent credit scores, experience with investing, both owning a rental properties.

    So if there are people interesting in investing let us know. Our estimate is about 10% return on investment. ( are plans are pretty conservative with this invest. fund )… it is planned to be a safe long term investment.

    Also it will be minimum amount that can be invested because no way that we can chat with every person willing to invest $25 in the fund.

    I am also thinking to open an account at Prosper and Lending Club ( I think that will increase trust with other folks…)

    Let me know.


  • Anonymous

    Great review! I’ve been using Lending Club as an investor for a while now and I love it. No complaints whatsoever so far.

  • http://twitter.com/LLending Lucrative Lending


    “For borrowers, the disadvantages are borrowing from the unknown and an unregulated institution.”

    I’m not sure if this is just an old article, but Prosper and Lending Club are indeed regulated institutions and post filings to the SEC.

  • Sxytigra

    I applied for a $2500 loan to catch up on overdue bills and it was 100% funded in the AM, but then “removed” completely in the PM. Apparently my debt to income wasn’t impressing the underwriters. Its stupid because this is the reason people take out personal loans. Fault me for having rent and car payments? Unreal. I called and the rep confirmed the reason. He couldn’t even tell me how much I could apply and get approved for.

    • Name

      It isn’t personal they are protecting the investors, using moddles they have determined people with your debt to income have an increased chance to default, any prudent bank will do this.

  • vano

    Lending club makes borrowing even harder than traditional banks. I just can’t get a loan from them with my 713 FICO score. They come up with all kinds of dumb reason like: you have so many credit requests in the last few months and so on…. damn!!!

    • Name

      This is common with unsecured loans, the charm in lending club is once your are done with the shitty part(which you will get anywhere) you can usually get more money and a lower interest rate, not to mention you are paying to smaller investors instead of banks.

  • http://orensmoneysaver.com/ Oren

    I just starting do lending club a few months ago and I have been getting a return of about 22% so far so I am pretty happy with those results. I am sure those numbers will go down, but hopefully they stay high

    • Name

      Most defiantly will go down as the defaults catch up to you, the loans that have earned the best interest over time are high C’s low D’s, you can check this in the lending club statistics

  • Mike A.

    I’ve been testing both Prosper and Lending Club with several hundred $$ since Jan 2012. I’ve read from several blogs and other reviews and found it to be a legit sites so I gave it a, “go”. So far, I’ve had 1 default for $75 and the borrower is under collections, loans are 36 months or longer. If your a small time investor, I’d recommend distributing $25 to start to borrowers with the following criteria: No delinquency, Employed, Income Verified, Gross Income $5k> and good reason for use of the loan . It’s really time consuming looking over all the loans manually but they have tools that can assign investment automatically but without doing your due diligence it will get you into trouble. I tried their auto investment option and that’s how I got into trouble with one of the late loans. Good luck!!!

    • Name

      Never loan more than 25$ unless you are running out of a loan pool.

  • carlosc1dbz

    I put $500 into lending club and I am going to be getting about 0.87-89 cents a month for 36 months on 20 notes. That comes out to $590 after 36 months. I just dont get how they say that it is 11% annual. It seems that it is 11% triannual or 3.75%ish annual. Can someone help me understand this?

    • Name

      You need to keep investing your money as the loans age and the loans pay off principle you have less and less principle earning interest. Example.. after 18 months if you have not recycled the money you will only be earning interest on 250$ at 11%

    • Name

      They don’t lock the money you get in interest and principle every months so you can reinvest and it comes back in, after 2 months you should have about 32$ enough to reinvest in another loan, now you have 21 loans earning interest and that figure you have of 590 will go up, it will steadly go up as you reinvest so at the end of 36 months your account will be aprox little bit more than 650(If no one defaults).

      This is a hard concept to grasp.

      I am good with the maths and investmenting trust me they aren’t screwing you :P

      Actually to get more complicated it will probably be less than 650. Your default rate is probably 2% so that takes it down to average 635ish. Then also you can’t reinvest till you hit exactly 25$ so that money will sit there. meaning at any given time on average you will have 12.50$ in money you can’t use that rounds out to about close to 5, so 630. And last but no least when you “fund” a loan you have to wait for it to fully fund(can take up to 10 something days(5 days on adverage )we can say that 25$ will be pended every time you want to reinvest something along the lines of 21 times over the course of 36 months. 105 days about 1/3 of a year that’s about 1$ anoyance, so lets say 629 but we will bump it back up to 635 because of the interest earned on interest in the 36 months.

      Once you have more than 500$ lets say a reasonable 20k these numbers become almost insignificant but at 500$ it makes enough of a difference to let you know.

      You will make more money with lending club than any other financial vehicle out there apart from hedge funds, which you can’t afford.

      The stock market right now is unwinnable game for sophisticated computer software and think tanks with people that have 150+ IQ, It’s always nice to have money in a S&P ETF encase the market explodes with some awesome new tech that changes everything but as of right now everything in the stock market is overvalued, Apart from banks…but they are probably on par value they aren’t a bargain.

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