Launched in 2006, Lending Club started as one of Facebook’s first apps as a person-to-person funding platform and has now become the largest online credit marketplace. Create unsecured loan requests up to $35,000 and the interest is determined by your credit history and debt-to-income ratio. Typically, loans are paid within 3 years and can be repaid at any time without penalty. Investors charge between 6% to 26% and Lending Club keeps an origination fee and small service charge. As of 2015, the company has funded $10 billion in loans and has made investors over a billion dollars.
Since the entire loan process is online, Lending Club is able to keep costs lower than traditional banks and they pass these savings on you (borrowers). Also, submitting a loan application will not have a negative impact to your credit but just like any other type of credit, you are still required to make timely payments and failure to pay will have negative consequences.
Once you qualify, select a loan offer, sit back and watch investors commit funds to you and your success in real-time. Medical financing is also available through over 10,000 providers in the United States. Monies should hit your bank account within a few days.
If your credit is bad, you may find yourself paying the highest interest rate available or unable to get funded altogether. Living in Maine, Idaho, North Dakota, Rhode Island, and Nebraska may have its perks but you won’t be able to get a Lending Club loan at this time.
There are two ways to profit from Lending Club. They are publicly traded on the NYSE under the ticker “LC” where you can buy shares of their common stock. The other option is to sign-up as an investor to fund loans in increments as little as $25. For borrowers with a credit grade of A-C, historical returns have ranged from 5.06% to 8.74%.
If you are wondering if you can be both a borrower and investor, the answer is yes, even at the same time. For more information, visit LendingClub.com or call customer service at (888) 596-3157.