Want Better Returns? Lend to Prime Borrowers

I Am a lender, though the first loan I made to one of the 780 credit score people -one of the 100 loans thus far made by me, is late 120 days, and NOT paying. I sort of see how LendingClub does not have an incentive to try to aggressively collect on loans. Perhaps they should verify all income, and data presented thru submission of backup materials, as borrowers would to borrow from a bank! It would only take 5 min extra (ex. W-2's, copies of cc debt, mortgage statements, rental leases, etc...I would then confidently invest a LOT more than I am doing so now. Wish I had more access to their data verified."

I'm a lender at Lending Club and the process seems very well set up. I'm happy so far!

Recently I needed to borrow a little money so I started the process for a small business loan and they offered it at 13% (not too bad) -- but American Express was less expensive at 10% so I didn't take it from Lending Club."

must have good credit"

I'm a lender with Lending Club. All of my loans are current except for one (and he is on a payment plan and assuming he doesn't pull scumbag moves, he will now pay back at a higher rate than the others, but I should get back at the least my principal). I am also a "high-risk" lender. I typically loan money to Ds and Es. My returns, currently are 15% (-minus 1% fees). I typically look for loans that people are trying to consolidate debt and no accumulate more. I was "high-risk" credit too, and now I'm "low-risk". My scores are in 700s because of efforts I made. I only have $500 invested, in case people are going to pull the scumbag move, but the quality of borrower is much higher than you will find at Prosper. Because my credit is "thin", I could only borrow from Prosper...put it that way. Lending Club does not play. I do advise that you do not use the portfolio service and actually read the listings you want to invest in, so you get a feel for who you're lending to. Bad apples still get through LC, just not as much."

sounds like a go offer"

My husband and I were borrowers on Prosper and I hate that "Prosper" has been given a "bad" name because of the non-paying members. We borrowed almost $10,000 (with two loans) and had them payed off with in a little over 18 mos with NO defaults. We don't have the greatest credit score..due to unfortunate events that happened in our lives a few years back, but I hate that only those with Great Credit ratings are only considered for this program on here with the Lending Club. I do understand those risking their own hard earned money to be critical when choosing someone to lend to, but the best credit ratings are not always the best way to choose those people. There are still good, honest, hard working people that are very trust worthy w/out that of excellent credit ratings still out there and it upsets me that the american society has made a "bad" name for all of us."

There are legal requirements for lending that vary from state to state. Because it is registered with the SEC and this is a new type of business (and it goes against the face of big banks) there will probably be some scrutiny.

Are your roommates on your tax return? You can't count the aggregate as a household if there are no financial ties (other than paying housing to the same entity).

Read the prospectus because there are considerable risks associated with this that go beyond a borrower defaulting. Also contrary to comments, if you read this you will find they don't verify everyone's income. Monetarily, they have little incentive to collect on late payments and defaults."

I don't understand why there is a minimum salary requirement to loan money. Is this correct? Why does it matter how much I make if I want to loan someone $100?

Also, my household income is far more than $70k (probably more like $200k), but my household includes me and 3 roommates.

Can I lend to people or not?"

randyeich, click the wrong button or what?"

You won't get rich through LendingClub (lenders aren't allowed to loan more than 10% of their income), but at least you're dealing with an S-1 registered company and pre-screened borrowers, many of whom have good ratings and are disgusted with the behavior of the major banks and credit card companies. I put up $500 and I'm satisfied with the loans I made (>10% after LC gets its take)."