Before, consumers would need to go to the bank just for them to apply on a loan. If you have plans on investing, you would have to stick on with the traditional money market accounts, bonds or stocks.
This however had all changed today. Lending club in fact now allow consumers to acquire loans directly from regular individuals who have the necessary cash to invest. Such platform actually offers it through the peer-to-peer lending.
How this Work
Lending club is a form of peer-to-peer lending platform. In such case, the borrower will be able to acquire loans directly on site with an interest rate that’s lower than the bank. An investor may also invest on to their peers and earn returns once that the loan is paid back.
All of this happens online and there’s no need for any face-to-face meetings. The borrowers also could upload their documents to lending club and the investors could transfer funds from the linked checking account. To simplify this, lending club is actually putting a new spin on lending to where both borrowers and investors are in control.
One of its benefits is where you have boundary against the stock market’s volatility. A bad market simply could affect people’s willingness to borrow or lend. However, the performance of lending club loans is not correlated directly with stock market. When you will diversify the investment to a p2p lending investing, you will get a form of protection against the problems of the stock market.
Get Automatic Investing Returns
Lending club in fact reinvest your returns directly if you are going to consider its auto-invest option. You also could reinvest to others and you could continue in building your portfolio.
Risks are Diversified
As long as you will invest for at least a minimum of $25 for each note, you get the opportunity of investing more. You also could allocate the investment on notes which vary in grades in order to get the ideal balance of its risks and lending club returns.
If you want to borrow money and comes with a good credit and also have low debt ratio, you may actually bypass banks and acquire money from individual investors.
If you also have a decent net worth and you are in search for something other than stocks and bonds, you could make decent returns on your investments with lending club investing.
Much like other forms of investment or loans, it is crucial to make sure to read as well as understand the risk that you will take and you need to also have a lending club strategy. Peer to peer lending investing tend to have a solid platform, but it is very important that you will weigh on the situation first and follow investing tips in order to end up making a wise decision.