Pros of Lending Club Investing
Before, what you would need to do in order to apply for a loan is go the bank personally. If you have plans on investing, you would have to stick on with the traditional money market accounts, bonds or stocks.
But this had now changed today. Lending club will now allow its consumers in getting loans directly from regular individuals who have the cash to invest. A platform like this is offered through a peer-to-peer lending.
How this Work
Lending club is a type of peer-to-peer lending platform. In this case, the borrowers could get loans directly on site with interest rates that are lower than the bank. Investors also could invest on their peers and then earn returns when the loan is paid back.
All of this happens online and there’s no need for any face-to-face meetings. The borrowers also could upload their documents to lending club and the investors could transfer funds from the linked checking account. To simply put it, lending club is putting on a new spin with lending where both borrowers and investors are in control.
One of the benefits is that you have a boundary against the volatility of the stock market. Bad markets could affect the willingness of people in borrowing or lending. Lending club loans however does not have a connection directly with the stock market. If you are going to diversify the investment towards a p2p lending investing, you would get a kind of protection against the stock market issues.
Fast Investing Returns
Lending club in fact reinvest your returns directly if you are going to consider its auto-invest option. You also could reinvest to others and you could continue in building your portfolio.
As long as you will invest for at least a minimum of $25 for each note, you get the opportunity of investing more. You also could allocate the investment on notes which vary in grades in order to get the ideal balance of its risks and lending club returns.
If you want to borrow money and comes with a good credit and also have low debt ratio, you may actually bypass banks and acquire money from individual investors.
If you also have a decent net worth and you are in search for something other than stocks and bonds, you could make decent returns on your investments with lending club investing.
Like other investments or loans, it is very important to make sure that you first read and understand the risks and have a lending club strategy. Peer to peer lending investing tend to have a solid platform, but it is essential to weigh your situation first and follow investing tips so you could make a wise choice.