Lending Club fail

[blackfedora]

I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...

[Self-employed-swami]

Haha, awesome! 

You should see if you can be your own funder, just for shits and giggles.

[Hugh H]

Haha, awesome! 

You should see if you can be your own funder, just for shits and giggles.

Brilliant… pay interest to yourself and save more!

[Nords]

I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...

So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

[arebelspy]

I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...

So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

Many people tried this "arbitrage" in the early days of Prosper (this was before LC existed).  It did not work out well (for a number of reasons).

The announcement the OP got could have been worse, it could have been reversed.  I.e. "You've borrowed 20k from us.  Become a lender!"

[beltim]

I received a pre-approval for up to $35,000 from Lending club.... I currently have a lending account with them. Good job guys...

So you could borrow money at 6% and lend it out at 15%? 

Yeah, that should work... especially if they'll auto-deduct the P&I payments from your lending account right after it's credited with the monthly deposit.

[/sarcasm]

Many people tried this "arbitrage" in the early days of Prosper (this was before LC existed).  It did not work out well (for a number of reasons).

The announcement the OP got could have been worse, it could have been reversed.  I.e. "You've borrowed 20k from us.  Become a lender!"

At one point early on in Lending Club I got an offer to take out a Lending Club loan in order to invest in more higher risk loans, in exchange for which I would get a 4% discount on the interest rate.  I have to say I seriously considered it, but I'm glad I didn't participate - returns in that era were significantly below current returns (this is before they reworked the risk determination).  I definitely would have lost money on that deal.