After reading the good and bad situations from other PF bloggers I tried out one of those Lending Club offers (aff.) that gives you $25 to lend to someone if you sign up. If I added money to the account ($500), they would give me more ($50). But I am a Nervous Nelly and decided to take the free $25, and not add any more, and see what would come of it.

I didn't have huge criteria for who I would lend to. My main concern was to make around 10% and I didn't want to loan to anyone who had a request larger than 5 thousand. I found a borrower who wanted 3 thousand and the score was a B - or just under a 10% return.

So far after 4 months of payments they are doing fine in their repayments and I'm slowing making a few more free cents off of the free $25 I started with. These loans are for 36 months though and this return on my free money is slow going.

The one thing I have to remind myself, which I didn't do when I was collecting comics, is that these investments take time. There will be ups and downs, payments might get behind, they might pay off the note early and I don't get the full effect and so on. No matter what, I need to remember it is not what I think I might have in my hand but what I already put into the investment. In this case, I only signed up and the rest was free money.

Would you try one of these peer to peer lending sites - to either borrow or to lend?


  1. Anonymous // Thursday, September 30, 2010 2:32:00 PM  

    We do invest at We have over $1,000 invested. We've only had one loan not payoff so far (and we have over 30 loans), and ironically, those borrowers had a AA credit rating. We only lost $1.80 in principal of the $50 invested in that loan, however - probably didn't payoff because of job loss.

    The average APY is 15%, as you said there is a risk of loss of principal, but I feel much better about helping other Americans pay off their debts than say investing in the joke of the stock market, or funding criminal banking institutions by keeping our money in a much lower yield savings account.

  2. Lulu // Thursday, September 30, 2010 8:29:00 PM  

    I invest in Lending Club and I love it. I started with Prosper but I am withdrawing all my cash there and sticking to Lending Club because I had a better experience there.

    The most important thing is to only invest what you can afford to every time you invest $25 be sure to say goodbye to it since you never know what will happen. I only make the minimum investment of $25 per person and will not lend to anyone who is borrowing over $15,000. All the best.

  3. Louise // Friday, October 01, 2010 8:13:00 AM  

    We invested about a year ago, but decided to jump in with $2,500 so that we could diversify the investment. Investing in 1 or 2 people is fun, but it's not really an investment, plus if the person stops paying, then you lost your $25. With the 100 loans we made, 2 stopped paying completely, and 1 is currently late, but overall, we're still making 8%, which is helluva lot better than my ING direct account for sure!

  4. Matt SF // Friday, October 01, 2010 7:45:00 PM  

    I've been investing at Lending Club for a little over a year now with a 15% return. Even have a pseudo investment club setup if you'd like to follow along with a group of 20 of us.

    Really wish LC had been around 10 years ago when I opened my IRA... 10 years of 10%+ returns would be nice.

  5. The Grouch // Monday, October 04, 2010 2:24:00 PM  

    It is illegal in my state, so I've been spared the temptation.