Peer to Peer Lending - Lendingclub

Few days ago I discovered lendingclub.com, it is a really cool website where you can lend money directly to other people and keep the interest of your loans, is is called as well P2P Lending, Person to Person lending or Peer to Peer lending; in other words you can become your own mini bank. I opened an account as an investor, which is pretty easy, and after linking my bank account I was ready to lend at 9.68% interest rate.

The first thing you need to do is to select the candidate for your loan, all you need to do is go and browse the notes and apply the filters to screen your potential candidates. I personally liked these filters but you can customize it with your own ones:

• Interest rate
• Reviewed by lending club
• Months since last delinquency
• Max loan amount up to
• Credit score
• And revolving balance utilization

After configuring your preferences on each filter, click update results to pop up your selected candidates, read the details of the loan including the individual credit history on any one of them, finally, decide how much you want to lend them and click add to order.

Once the recipient got the loan you start to receive monthly payments plus interest until the whole debt is paid in full. The cool thing is that in average you can get a much better interest rate than a typical CD or money market account. Last year interest annualized return was 9,68%

I just liked this business model and I believe is a win-win situation for both investors and beneficiaries. Recently Behavioral economists from Columbia University’s Business School found that peer-to-peer investors appear to exhibit rational decision-making behavior, given certain risk and wealth factors, when they forego outside investment opportunities and replace them with peer-to-peer lending opportunities.

The published report is: Risk Aversion and Wealth: Evidence from Person-to-Person Lending Portfolios, and uses a sample of 2,168 investors participating on the LendingClub platform.

If you need to apply for a loan from the community all you have to do is apply here small loans or if you want to invest and help others consolidate their debts or benefit from loans with much better rates apply here online investing

This article has been written by Libardo Lambrano, founder of Syndikomm; an online marketing firm based in New York city and specialized in multicultural markets. Libardo Lambrano, a digital citizen of the world can be reached@llambrano