An In-Depth Exploration of Peer-to-Peer Lending on LendingClub

I’ve talked a lot about the perks of LendingClub before because I’m really interested in peer-to-peer lending. Still, I’m careful with my investments and only trust well-established and trustworthy online P2P platforms. Within this space, Prosper and LendingClub stand out, and I have a soft spot for LendingClub. This piece gives you a look at LendingClub’s site and why I’m such a big fan.

**The Lowdown on LendingClub**

Before getting into the nuts and bolts of LendingClub, it’s important to mention its big achievements. The Harvard Business Review named it one of the top 20 “Breakthrough Ideas for 2009,” and The Industry Standard called it one of the “Top 100 Innovators.” These accolades highlight LendingClub’s strong reputation, but let’s see what they’re all about.

LendingClub, with the slogan “Better Rates. Together.,” is like an online financial community. It aims to link trustworthy borrowers with investors willing to fund personal loans. This setup replaces banks with a small fee for each loan to keep the platform running.

**Getting Started with LendingClub**

Joining LendingClub is easy. I signed up in under five minutes. You can join as either an investor, like I did, or as a borrower. As a borrower, you can quickly apply and get a quote for your potential loan rate before officially making a loan request.

I find investing the most interesting part. As an investor, you simply approve a couple of small deposits to verify your bank account, which takes three to four days. Right now, I’m checking out loans and aiming to build my portfolio. The idea of earning more interest than a typical savings account or CD is exciting. You can track your loans daily if you want, which I probably will—no judgment here!

**Things to Keep in Mind**

By the end of August 2012, LendingClub had financed loans totaling $875,419,700, with $60,067,825 just in the previous month. Since it started, the company has paid investors $75,212,804, which is quite impressive.

If you’re serious about using LendingClub, there are some key points to consider. First, you can lower risk by diversifying your investment across numerous small loans, like $25 each, to cover any defaults. Second, spreading out investments over loans with different credit grades can provide a safety net. Keeping a balanced portfolio could lead to solid returns. That’s what I’m aiming for, and I wish you the best of luck!