Peer-to-Peer Lending
Peer-to-peer lending, or P2P lending, is a relatively new concept that allows you to skip the bank and "lend to" or "borrow from" individuals. As a borrower, your loan will be funded by many individuals competing to be your lender thus driving down the interest rate. As a lender, you'll be lending a small portion of many loans giving you a diversified portfolio of investment.
Recommended Resource
Lending Club is a social lending network that lets borrower members borrow money through personal loans, and lenders fund these loans by investing in Notes. Each Note corresponds to a portion of a borrower loan.
Lenders can fund borrowers selected for their good credit.
- 14% of loan applications approved to date.
- Low default rate. < 3% after 18 months.
- Free, fast, easy sign-up. No hidden fees.
- Offered by Prospectus and Supplement.
Recent articles about Peer-to-Peer Lending
Introduction to Peer-to-Peer Lending
I have been lending in peer-to-peer lending networks like Lending Club and Prosper for a year now. I believe that peer-to-peer lending networks are gaining credibility; especially with the successful Lending Club SEC registration in 2008. Last year, I made +8.73% with Lending Club and + 7.58% with Prosper, which is decent returns considering the [...]
With the economic crisis in full bloom, it’s increasingly difficult for small business owners to find capital needed to keep their business going. Cutting costs can only improve cash flow to an extent; eventually borrowing becomes inevitable without top line improvement. Unfortunately, traditional business lenders are tightening up their lending practices, making it very hard [...]
Initially, I wasn’t going to write about the change at Lending Club, because I didn’t want to speculate. But since I wrote about it a few times, I felt obligated to share my thought on this event to my readers.
A Quick Background
Lending Club is a peer-to-peer lending network where you could sign up as [...]
Last week, my friend Gibble sparked a little controversy with his post “Why I think P2P lending is a bad idea.” He believes peer-to-peer lending as bad because it propagates myriad problems caused by credit and debt. In his words:
“I’m not a fan of borrowing money and couldn’t in good conscience recommend these [...]
In my previous post on peer-to-peer lending, I indicated that these networks are not quite ready for prime time yet. One reason was the stability of these companies, which was promptly addressed in the comments section — specifically, a 3rd party loan servicing agent will service the loans in case something happens to these companies. [...]
It has been a while since I wrote about my peer-to-peer lending investments. DebtKid recently interviewed me, and you can see our interview on Lending Club. One of the questions the stuck with me was: “Do you think P2P investments should fit into an investor’s portfolio?”
Peer to-Peer Lending Is Not Ready for Prime Time
In [...]
Recently, I wrote about lending money on Prosper, which is one of the many peer-to-peer lending networks that are popping up everywhere. The post itself didn’t say anything about socially responsible investing (also known as, SRI, morally responsible investing or ethical investing). However, a lively discussion on this topic came up when Kevin [...]
There are a lot going on at Moolanomy’s ideas factory. Unfortunately, I can’t write them down fast enough, but I want to share everything now — talking about patience! Anyway, here is a list of topics that I will be talking about over the next few days, may be weeks. I just [...]
