When peer to peer lending first started, the biggest name in the market was Prosper. I was skeptical about the whole business of peer to peer lending and it showed in my review of Prosper, which was more about peer to peer lending than it was about Prosper itself. Since then, with the arrival of SEC oversight and other competing businesses like Lending Club, I have a little more faith in peer to peer lending networks.

(Click to continue reading…)

Email Newsletter subscribers will already know this (you should sign up if you haven’t already, you get a couple free eBooks!) but Lending Club is running a promotion this September where you could win $2,500 if you are Lending Club’s 250,000th subscriber.

Click here to sign up and if you are the 250,000th registered investor, you win $2,500. You don’t have to invest a thing, you just need to become a registered investor.

If you do invest, the average return over the last twelve months has been 9.6% APY, which is a pretty nice return. Can’t beat that with the stock market over the same period of time! I’m personally not an investor because I can’t be, Maryland residents can’t invest through Lending Club, but I probably would’ve given it a try if I were allowed to. So it goes sometimes.

Contest ends when September ends, be sure to review the contest terms & conditions to confirm your eligibility. Good luck!

In the comments of the $100 Lending Club giveaway, Reader Barry said it would’ve been nice if I had notified you all about the restriction on Lending Club investors. Well Barry, you asked and thus you shall receive!

There are two parts to Lending Club. There is the actual Lending Club site, where you invest in notes (loans), and there is the Note Trading Platform, where you can trade notes.

(Click to continue reading…)

Following up on Jim’s guide to social lending networks, this is my story of doing business with Prosper, which is a lot like Lending Club. Although Prosper is in a quiet period, my experience with them is indicative of the basic social lending process, and should mirror what you’d get at other active social lending sites.

I hired a local landscaper and dirt mover last June to correct a horrible grading job in my back yard. For the basic hardscaping (dirt removal, retaining wall, and grading), he quoted $5,000. Of course, I needed the cash on hand. I looked at my local credit union first, which could go as low as 9%. Then I heard about Prosper on Clark Howard’s show, and checked it out. After registering and verifying the usual stuff, I created my loan page. Within a week, my loan had been funded.

(Click to continue reading…)

Certificate of deposit rates are abysmal, high yield savings account interest rates are worse, and the stock market is insanely volatile… which is why so many people have started to turn towards social lending networks like LendingClub, Prosper and Pertuity Direct.

(Click to continue reading…)

Scared off by stocks and real estate but seeking a higher return than a savings account? Consider testing social lending, where individuals loan money to each other. The returns can be quite attractive, but these loans are often quite risky as well.

(Click to continue reading…)

When Prosper first launched, I thought it was a cute idea that had some potential but likely wouldn’t earn my trust. Since then, other companies like LendingClub have launched and the whole peer to peer lending phenomenon has exploded in the news.

(Click to continue reading…)

How would you like to win a hundred bucks?

The fine folks from LendingClub are giving away $100 to one Bargaineering reader. As one of the only peer to peer lending marketplaces still doing business right now, Prosper entered a quiet period as it completes its regulatory filings. If you want to borrow or lend money, LendingClub is one of the only ways you can right now. A week ago, I posted a video explaining how peer to peer loan marketplaces like LendingClub are really helping people out of jams. Today, they’re ready to give a hundred bucks to one lucky reader.

Here’s what you have to do to get an entry in the contest:

• Leave a comment on this post before noon, February 20th, and,
• Become a free registered member of LendingClub.

The second requirement, to register for free at LendingClub as a lender, is so that they can deposit the $100 directly into your account. You can withdraw that money immediately (or invest it, your choice).

Easy right?

I’ll select a winner at high noon on February 20th, email them for their LendingClub username, and he or she will be credited with $100 in their account. Void where prohibited.

The contest has closed, Bobby was randomly selected to win the $100! I notified him tonight but if he doesn’t respond in a week, I’ll select another name.

On a recent trip home, my Dad told me about how he sent a co-worker to my website a few months ago. It turns out that that his co-worker had taken one of those 0% financing offers from a major electronics retailer for twelve months. What they didn’t know was that if they didn’t pay off the entire bill in full, they would be subject to all the interest due from the 0% period. I warn against this common fine print “gotcha” in my warning on 0% financing offers.

Anyway, the period was about to expire, his co-worker was about to get socked with a big interest payment and a higher rate, and they didn’t know what to do. My dad told them about 0% balance transfers and they were able to secure a twelve month reprieve, now paying it off regularly as they should’ve done in the first place. My dad told me that he had no idea how my site was popular until that point because he saw it help someone and how happy they were to find a five-minute solution to a problem they’ve had for weeks.

I had the same experience in watching a video about peer to peer lending service, LendingClub:

The video really opened my eyes to peer to peer lending the same way my dad’s experience with his co-worker opened his eyes to my website. This is a site that is helping people when they have no where else to turn to. The two minute video profiles an Army medic who found himself owing his employer four years in pension payments in one lump sum payment (not sure how that works but that’s how they described it, awfully nice of his employer!), and he needed to find $16,000! Through LendingClub, he was able to get a loan.

The amazing part about the entire story was the graph charting online lending’s progress. In 2005, online lending was a $118 million market. In 2008, it’s 1.55 billion. Yes, BILLION. They believe it will go to six BILLION by 2010. Regardless of what it gets to in 2010, it’s clear that this isn’t some fad that will fizzle away in a few years.

I want to start lending but it turns out Maryland isn’t on the list of places eligible to invest in notes. Shucks!

I was listening to NPR’s Morning Edition the other day when they started talking about peer-to-peer lending companies like Lending Club and Prosper (currently closed pending SEC approval).

I’ve written about peer to peer lending a few times before, first when Prosper’s Peer to Peer Lending Marketing debuted and then once again when LendingClub offered their peer to peer lending service.

I personally don’t invest using either service because I didn’t have confidence in an untested system in a totally new paradigm. However, if I were a borrower, I’d jump at the chance to borrow money from individuals rather than the monolithic lending industry. You’d be kidding yourself if you didn’t think the lending industry, be it loans or credit cards, doesn’t jump at the chance to lock you in to something complicated and counterintuitive (option ARMs anyone?).

The borrowers probably benefit the most in this arrangement. The experiences profiled in the Morning Edition clip echo many that I’ve read online – borrowers get the opportunity to get loans with better terms and with less headache. While you are still ranked by your score, you get to add a little color commentary not captured in credit histories.

For investors, I have read that default rates were higher than they first listed and individuals are finally learning why the lending industry acts the way it does. A lot of people default. The benefit of peer to peer lending is that investors can invest small amounts into many loans, thus diversifying their risk. I like the idea of having another avenue to invest in outside the typical stock/bond/whatever paradigm but I’m still apprehensive.

While I’m still not sold on the idea of investing in peer to peer marketplaces, if I needed a loan I wouldn’t hesitate to put them on my list of places to get a quote from. What are your thoughts on the peer to peer lending industry?