Hi friends, Good morning and a warm welcome back. For the article for today, I would like to look into the details of completely 
different breed of investment programs, that is based on the growing popular phenomenon of Peer to Peer lending, abbreviated as P2P Lending.
With credit card holders getting higher interest notes and lower credit lines and many investors pulling out their money from downhill stock markets, there was always a desire among investors to invest in Investment programs, that offer better interest rates. The internet being filled with shady money making programs, there was always a space for something completely legal yet offering higher returns than the CD accounts offering 2% annual returns.
A new industry, namely the peer to peer lending programs evolved back in 2007 to 2008 to satisfy both the groups of disappointed borrowers and lenders.
One of the most popular among the P2P lending sites is the Lendingclub.com . Lendingclub.com was launched way back on 2007 by the successful entrepreneur Renaud Laplanche. Since then, Lending club has received several accolades, one of them being listed as one of the top 20 breakthrough ideas by the Harvard Business review. One of it’s recognitions has been included within America’s Most Promising Companies 2011 [Top 20 Companies] – Source – Forbes.com
According to the current statistics published at Lendingclub.com, it has already paid $71,347,182 as interest to the investors and funded loans amount to a total of $827,328,800 [Source - Lendingclub.com ]
Investing At Lendingclub.com
* First thing that is needed to be learnt is ‘ What are Prime Consumer Notes ? ‘
As explained at Lendingclub.com the Primary Consumer Notes are fixed income investments that generate monthly return, that can be withdrawn or re-invested. The Primary Consumer Notes are graded from A1 to G5, offering progressively increasing monthly returns, proportionate to the the risk associated.
Quality Borrowers
As reported at Lendingclub.com, an average borrower at qualified for
- 715 FICO score
- 14.25% debt-to-income ratio (excluding mortgage)
- 15 years of credit history
- $69,274 personal income (top 10% of US population) 2
- Average Loan Size: $11,750
Source – Lendingclub.com
Monthly Cash Flow
Investors receive a monthly payment of their investments as well as the interests, which one can withdraw or re-invest.
Searching And Selecting Loans :
Once inside your Lendingclub.com dashboard, on the right side – you get to see a range of parameters to select the borrowers, 
according to your preference. One can select the loan applicants by average rate of return, Credit Score, DTI Ratio, delinquencies in the last two years.
Automated Loan Selection – Using the LendingMatch :
There is also an option for automated loan selection, if investors do not wish to make the selection manually. For automated selection, one has to place the desired investment amount and the desired interest rate and run the LendingMatch, which will fetch the loan applicants according to your selection.
Funding And Withdrawal Options :
* PayPal
* ACH (directly from your bank account)
* Wire Transfer
* Check
Minimum Investment required to Create a Lendingclub.com Investor’s Account :
Minimum investment required to start investing at Lendingclub.com is $25. The minimum Note size at Lendingclub.com is also $25.
Minimizing the risk at Lendingclub.com : Best Practise
Obviously Diversification is very important. It’s always prudent to diversify and remember never to put all the eggs in the same basket, in this case the borrowers.
A Note to Remember : While selecting the Loan applicants, it must be kept in mind that if one opts for very high returns, it may lead to lower quality borrowers.
The Legal Stuff :
Lendingclub.com is fully registered at U.S. Securities and Exchange Commission (SEC) .
Source : Lending Club Completes $600 Million SEC Registration
Eligibility for Investing at Lendingclub.com
Investors residing at the states of California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming are only eligible for investing at Lendingclub.com . [Lendingclub.com is a peer to peer lending program available for U.S citizens only]
Some Rave Reviews :
A Financial Plan for the Truly Fed Up – The New York Times
LendingClub Brings Another Morgan Stanley Bigwig on Board – Bloomberg.com
Earn a 10% Yield Without Buying a Single Stock, Thanks to Technology - caseyresearch.com
Lending Club Nabs $25 Million In New Funding - wsj.com
After100Days
Do you borrow money outside of United States
I reside in Australia
Hi Nikola Capalija,
Hope you are doing well.
Well I am searching for peer to peer lending sites for other countries as well.
But , till now , i could only find the legal ones for United States and United Kingdom only.
regards
Hey HM,
. I have patiently waited for them to get licensed in the state of North Dakota but they never have. Bummer for me.
I just wanted to let you know that P2P is a very good investment. I actually participated in P2P lending back in 2009 with prosper.com , but unfortunately I have not been able to continue investing. When the markets went bust and the FDIC invented their new rules for banks and lending practices. Prosper.com/ Lendingtree.com and all the other p2p quit allowing me to invest new funds
Anyways This is what I wanted to say. Think like a bank and stay away from people that have bad credit. The rate of return for these investments may be high, but they are extremely risky. Back in the day I steadily invested 100 dollars a month and I invested mostly in loans for people with D and C credit scores because they had a nice interest rate. My last investment(p2p loan) matured around the end of last year. When I looked at a summarized view of my investments from 2009-2011 I found that more than 60% of the people I lent money too defaulted on their loan and most are still in collections to this day. I invested a total of 500 dollars and with the people defaulting I just broke even when it was all said and done.
Tip: take the lower risk/lower return options and lend money to people with B and A credit.
Best of luck to all that try it and I hope someday I can get back into it
~ James
James again… Ok after posting my first reply I need to correct some of my facts. I logged into my old prosper account and decided to take a screen shot of my overall account.
I started investing in 2007 not 2009. Soo almost 5 years to see my last note mature. Have a look for yourselves
http://i737.photobucket.com/albums/xx17/mathisjw/Capture.jpg
Hi James,
How are u doing?
Thanks for sharing your experience with prosper.com.
The ‘TIP’ u gave is very important.
I guess the peer to peer lending sites have now become more strict in approving loan applicants.
regards
That’s good to hear HM