Peer to Peer Lending
Peer to Peer lending is a relatively new investment concept which allows lenders to connect with borrows through a social lending network.
Lending Club has been drastically growing in popularity amongst savvy money-savers over the last year due to their higher than average returns and easy functionality.
Average returns vary between 6.69% APY and 16.89% APY.
They essentially function as a bank in that they connect borrowers with lenders, however they are more efficient when it comes to cutting costs as much of the brick and mortar found with traditional banks is eliminated.
Important statistics to monitor if you are considering investing:
- Lending Club only accepts 14% of it’s loan applicants
- Extremely low default rate. Less than 3% of their borrowers have defaulted on a loan payment within the last 18 months.
- Each note corresponds to a portion of a borrower loan. If you decide to invest, say, $1000 this amount will be spread over dozens of different loans to reduce your risk through diversification.
- Fast and Easy sign up with no hidden or additional fees.
- Offered by Prospectus
To review comments left on BankVibe regarding peer to peer lending click here (and scroll to the bottom).
