Lending Club is a peer to peer (P2P) lending service that helps individuals borrow money from other people without a bank getting involved. Instead of having to go through the traditional route of borrowing money from a bank, people can log on to a peer to peer lending network such as Lending Club and lend money to people or borrow money from others who are also members of the network. When borrowing money through Lending Club, you may receive a lower interest rate than you would from a traditional bank because because of low administrative costs and low overhead.
P2P lenders lend money to people who are looking for alternative means of financing than a traditional bank. Many peer to peer loans are used for small businesses looking to expand, consumers wanting to consolidate debt, students looking for educational loans, brides trying to fund their weddings, medical expenses, and a broad host of other borrowing needs. The loan requests definitely run the entire gamut of financing needs.
To request a loan through Lending Club you…
1. It is really easy to start the loan process. You begin by joining Lending Club as a member. You will create your login information like you do for most websites. Your actual identity will not be displayed to any other members of Lending Club. No one who will potentially loan to you will ever know your identity.
2. Next, click on [Borrow > Get a Loan] to prepare your loan request. Lending Club will ask for personal and financial information to verify your identity, determine the loan terms that will be available to you, and match you with suitable lenders. All loans on Lending Club are 3-year installment loans, and your interest rate will be based on the amount of funding that you request and the information on your credit report.
3. After your loan request is complete, it will be listed on Lending Club’s website for two weeks and visible to users who can bid on it. Your loan listing will not contain any personally identifying information in the site, and information from you credit report will only be shown anonymously to lenders so they can evaluate your personal loan request.
You can check out my lending criteria that I look for when I loan money to people on Lending Club! Lenders generally spread their money over several borrowers, so chances are that your loan will get funded by several lenders in $25 to $50 increments. It is not unusual for one loan to have a hundred lenders or more. Your identity will at all times remain confidential and not be disclosed to anyone. Once your loan closes, you will receive your money from Lending Club via the Automated Clearing House (ACH) System which will automatically deposit your loan into your bank account normally within one business day and repayment will begin by ACH one month later.
4. Lending Club will withdraw your loan payments each month from the bank account you verified during registration. These withdrawals will take place on the same day of the month as the date of the loan origination.
Lending Club is a great way to borrow money from other people without getting a bank involved. With consumer credit still tight, peer to peer lending is on the rise. Peer to peer lending is cheaper than regular consumer loans and credit in many cases for borrowers. Lending Club’s rate for the best credit risks is 7.88%, where the bank rate for personal loans, on average, is over 13%. And, the average credit card interest rate can be as high as 16% or more. Lending Club and peer to peer lending can be a great alternative to traditional loans.