We check in with Andrew’s
Lending Club strategy to find out if he’s making any money and if it might be a good investment for the rest of us.
Lending Club is a peer-to-peer lending company. If you need a loan, rather than going through a bank, you make a pitch and a pool of hundreds of people will lend you the money. Kind of like crowdsourcing for a loan. The interest rate you’re charged will be lower than what most banks would offer. And the return for the lenders can be high.
Andrew has $2700 invested and to date his returns are 18.5%! He hand picks his borrowers and spends a lot of time choosing them. He considers it his high risk, high return investment. He mostly invests in small business loans and refinancing. In order to choose whom to lend to, he sorts it by people with the highest credit scores and highest interest rates.
The key to succeeding in
Lending Club can be a great way to make money, but remember, there are no tricks. Andrew has done so well because he spends so much time analyzing the best people to borrow to. If you decide to try it yourself, let us know how you do.
Smuttynose Bouncy House: The all occasion ale.
Lending Club: A crowd sourcing site for peer-to-peer loans.
LMM Tool Box: Everything you need to get money savvy.
Featured Image Photo Credit: “Black & White Handshake – Still from the film Colour Blind (2009)” by Pui Shan Chan on Wikipedia