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Lending Club Investing Review
"I was one of the early investors at Lending Club, and my returns during that period were pretty good. At the time, I took advantage of the credit card interest rate arbitrage. Good borrowers were getting higher interest rates, and Lending Club offered a way for borrowers to get a lower rate. I helped these borrowers get a lower rate, and I got a decent return in the process. Everyone was happy. In the low interest rate environment, investors were desperate for yield, and Lending Club fit this bill perfectly.
With changes in the marketplace, investment opportunities change too. In 2018, as interest rates rise, I question the attractiveness of services like Lending Club. You might be able to find other investments that offer similar returns for less effort.
Since my initial use, Lending Club has made some considerable improvements: an improved underwriting process and secondary market, along with better accountability."
"Peer-to-peer lending platforms are a great alternative to the stock market and still yield a decent return. However, it’s risky and requires frequent diligence to invest wisely.
If you choose to invest, Lending Club is a great way for the average investor to do so, but know, even Lending Club can’t determine who might default on their loan."
"So, will this all work out? I have no idea but based on the data it looks like 92% of the people who have 100 notes or more worth $2,500 or more make a return of at least 6%. Since that’s not far from the market average I figure it can’t be that bad. Right now my Net Annualized Return is 19.30% so I’m off to a good start!"