Author Topic: What is Lending Club?  (Read 2556 times)

astvilla

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What is Lending Club?
« on: December 19, 2014, 02:00:50 PM »
What is Lending Club? Seems kinda attractive but I'm personally pretty fiscally conservative, i don't like loans, borrowing for things i can't afford. For some reason this Lending Club has the same scent as the loans/mortgages back in the subprime mortgage crisis.

Do mustachians invest in Lending Club or stick to low cost broad index funds (which I'm doing) or is it too new to tell? What is P2P lending anyway? Like torrents but instead of files you're doing money and interest? It seems to good to be true and I'm a bit skeptical and cynical with some of the numbers thrown at me.
« Last Edit: December 19, 2014, 02:14:18 PM by fewaopi »

matchewed

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Re: What is Lending Club?
« Reply #1 on: December 19, 2014, 03:45:51 PM »
Lending club is just a medium for you to loan (in)directly to people.

Mustachians do whatever the hell they want. I will tell you this though, and all of it is my opinion, the market for you to make a good amount off of lending club loans is more efficient than ever. That is to say for you to get an above average return would be very difficult as someone has already beat you to the punch using third party software.

This is less of my opinion but just good advice, if you don't understand it don't invest in it. P2P lending has nothing to do with torrents, bad analogous relationship because of an acronym.

I'd stick with low cost broad index funds because they're easy to understand. Then educate yourself and see if anything else strikes you as reasonable or jives with your you.

astvilla

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Re: What is Lending Club?
« Reply #2 on: December 19, 2014, 06:54:59 PM »
thanks for the reply, it seems not everyone can invest in lending club for some reason though? why exactly? i'm located in new jersey and my state doesn't seem to allow investments in lending club? how does state residency affect my choice to invest? it'd be like saying "you can't invest in VTSAX cause you live in Nebraska or something like that?" are there opportunities to invest if your state doesn't allow it?

matchewed

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astvilla

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Re: What is Lending Club?
« Reply #4 on: December 21, 2014, 08:58:08 AM »
thanks for the replies. but it still seems to good to be true and kinda risky. i wouldn't pour all my money here and i'm in a state that only allows trading, no investing (so what can i do w/lending club then?)

how do we know this is not a ponzi scheme though?

matchewed

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Re: What is Lending Club?
« Reply #5 on: December 21, 2014, 09:04:56 AM »
What can you do w/ lending club? Not much.

How do you know it's not a ponzi scheme? More transparency than an actual ponzi scheme. Ponzi schemes rely on masking and hiding the true investment. It would be very difficult for a ponzi scheme to have reached the complexity of lending club. Often times ponzi schemes are targeted towards individuals and not just left open for anyone to jump into.

randommadness

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Re: What is Lending Club?
« Reply #6 on: December 21, 2014, 03:41:49 PM »
I use Prosper and have had good luck. For notes I've held for over 10 months I've seen a 11.5% return. I've never had a default and I've been doing this for about 2.5 years.

29 current notes, 8 have paid off. Some people have hundreds or thousands of notes and have seen some defaults. I typically only invest in A or B because even those people are willing to pay 10+%.