LendingClub / Prosper Opportunity

[KinkyNEguy]

Hi: I heard about these two investment opportunities on Squawkbox one morning on my way to work. Does anyone else participate/play in investing with these? It reminds me a lot of Kiva which I also play with on the Charity side of things.... I really like the idea. I have acquaintances and colleagues who pay nearly 25 percent interest on credit cards and I have always thought that if I didn't have to do the processing, I would lend to them for less.....and get way more than my sad CD returns....yes yes I know RISK. Still.....I would love to hear from others. I was thinking about splitting $10K between them to see which is better... Thanks for the input.

[Decatur Guy]

I have a friend who has dabbled in that and he said it worked out pretty well, though he did lose money on a few of the loans. I've read up on it time to time but I've focused mainly on stocks.

 

I might give a couple of thousand a whirl on maybe 20 loans and see how it goes.

[Frequentflier]

I have money invested with Lending Club. I like how it works, including that you can put as little as $25 towards a loan which spreads the risk around. I don't know, at this point anyway, that I'd invest a ton of money in the loans. I only invest in A & B loans and the average rate of interest I'm getting is just under 10%. So far on those loans the default rate has been 0% but I know that could change. For borrowers, Lending Club seems a much better solution than credit cards. There are probably a lot of members on this site that have no debt, stellar credit but even they couldn't get a credit card (in our zero interest income environment) with a rate less than 10% (excluding those short term zero percent transfers/credit offerings). For those with less than stellar credit I bet they are at 18% so Lending Club is a better option that also helps their credit scores. FYI, legal disclaimer, I'm not giving investment advice here! Just sharing my experience.