Lending Club is actually a two way street. You can actually use it to borrow money from investors as well. Here's a list of of some of the ways people are using these loans:
- Dept Consolidation
- Credit Card Refinance
- Home Improvement
- Major Purchases
- Home
- Car
- Business
- Vaccation
- Weddings
- Moving
- Medical Bills
- more...
Back to the investment end, there is a risk to reward ratio based on grades of notes to be issued. These grades run from A-G (A being least risky, and G being more risk). This risk are offset by higher returns on investment. Keep in mind that a borrower fails to repay their loan, you could find yourself out your investment. The different categories and respective rates are as follows:
One of the coolest thing is that you get to review some basic information about the borrower as well. Such things as general location for which they reside, current job, income, and dept to income ratio just to name a few. And finally, for my favorite part...
My favorite part about Lending Club is that while a borrower may be seeking a $10,000
loan, you could put in a meager $25. This is great because it allows you to be a part of something, without fronting the entire check. The other great thing is that it allows you to diversify. You don't need to dump all of your eggs into one basket. This way, if one of the borrowers default on their loan, you have other loans in your portfolio to keep your earned interest high.
Hope you learned something new. As always, keep in mind that investments of any type come with risk. make sure you fully comprehend these risk before making a decision.
https://www.lendingclub.com
Would love to hear some feedback from you! Leave a comment...
-M@
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