As the name suggests, peer to peer lending is a way of borrowing money from an individual person as opposed to a bank. Lending Club is a US based company that gathers people who are borrowers and investors on a single platform to make the process of borrowing and investing into a seamless transaction. You do not need to apply to a bank and go through the tedious process of loan applications, paying middleman fees, the delays and the anxiety of the process in general.
With Peer-to-Peer lending that is offered by Lending Club, the process of borrowing money becomes more efficient. While the process is more simple for borrowers, you may be wondering how lending club investing helps investors.
Taking part in investing in consumer credit
Lending Club investing offers you the opportunity to play the role that was only played by the banks or other financial institutions prior to lending club introducing its platform. This is a way for an individual with money to invest to engage in a process that is far more rewarding than many fixed income investments.
The yield/return for lending club investors
If you invest money, you will want the yield to be higher and your investment should be put to good use. Lending Club investing offers you the best rates in the market.
With returns ranging from 4-7%, Lending Club investing offers a unique investment opportunity. The profiles and credit histories of borrowers are vetted by the platform to ensure that they are credit worthy and will repay the loans they are given.
A steady source of income
If you have extra money and you do not know what to with it, you should think about peer-to-peer investing with Lending Club. With the US economy’s current status, there aren’t many steady sources of income left when it comes to investments and the fluctuating return on the stock market is a good example of that.
More and more people are turning towards peer to peer borrowing instead of taking a loan from the bank since lending companies like the Lending Club make the process easier and simpler for both the investors and the borrowers. Since more people are turning towards borrowing this way, more investors are also seeing it as a secure and steady source of income with principal and interest payments coming to you monthly. Lending Club Investors need not to worry about money coming one month and not coming the next month. It is a very steady source of income.
An automated way of Investing
Lending Club investors do not have to wake up every morning and be on their phone with stockbrokers, or glued to a computer watching the averages fluctuate on the stock market. There are P2P lending strategies that allow for a passive investment.
It is a very passive way of investing your money. You can just deposit your money and forget about it since the profits will automatically be transferred to you or you can keep choosing new loans to invest in. This ensures that you do not have to worry about your investments and it makes it into a process that is very simple and easily understandable for anyone without the complexities that come with other forms of investments.
A way of giving back to the society
Lending Club Investors have a great opportunity to give back to society while earning a profit at the same time. It is an ideal solution for both borrowers and investors.
You are helping the people in need by loaning them money, you are essentially helping someone build a house, go to college, save their life with medical loans etc.
Borrowers will be saved from the hassle of getting a loan from the bank, the investors will know what exactly their money is being used for and will help to build a stronger relationship with the society at large without the worry of not getting their money or not yielding a high return from their investment. A perfect solution!
The ease of building a portfolio
As mentioned above, one of the biggest advantages of peer to peer lending investment is the ease of the process and how it is far removed from the complexities of other investment vehicles. You just have to open an account with Lending Club, which is a very simple and easy process.
You can use your retirement account as well and that will have the added bonus of your portfolio being tax deferre. You will then simply choose a strategy on the types of loans you want to invest your money in. Alternatively you can browse through the loans manually and then you just link your bank account or wire the money.