A form of lending that has become more prevalent in recent times is peer to peer lending. As the name suggests, it focuses on the idea of people lending to each other and to businesses, rather than using the banking system to facilitate such loans.
One leading company providing such a service is Lending Club. The club opened its doors in 2007 and has been going strong ever since. The whole process works over the internet, so providing you have access to their website you can find out more about them and open an account or apply for the loan you need.
Information for those who want to borrow
If you cannot get a loan via your bank it may be worth considering Lending Club. According to their website you can borrow as much as $35,000 from them. The application process is handled online and you pay the money back in monthly payments in much the same way as you would with other loans.
One of the advantages of looking to Lending Club for your loan requirements is the ease and simplicity of getting the quotation you need. They provide rate comparisons with other services as well, so while you should compare rates independently they do seem to offer a competitive service.
Information for those who want to invest
This is perhaps the most interesting part of Lending Club. The principle works according to Prime Consumer Notes. Each ‘note’ is an investment and while you can choose how many you want to hold, many people opt for hundreds at a minimum. Some elect to invest in thousands.
Lending Club grades the notes according to the risk that fits with them. Grade A notes are the safest and provide a lower rate of interest. Grade G is the riskiest note and therefore provides a much higher rate of interest, around three times as much as the safest note.
It is up to you how much risk you wish to take, although they suggest you opt for a mixed selection to spread the degree of risk you are taking.
Is Lending Club for you?
Clearly it is worth taking a closer look at Lending Club if you are considering either an investment or a loan of some kind. The opportunity to balance the amount of risk you are taking will appeal to those who want to exert more control over their investments. Furthermore those who wish to apply for a loan without having to jump through the hoops provided by the normal banking system may find what they need here.
Of course Lending Club won’t suit everyone, whatever side of the fence you happen to be on. However it may well prove to be a viable alternative for many people, and one that fits with personal goals and desires. With more than $900 million worth of loans funded so far, Lending Club has established itself as a key player in the industry.
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