Earn Higher Interest Income with Lending Club

MJ Wolfe — Sat, 28 Feb 2009 15:03:29 +0000

If you are tired of earning only 3% or 4% from your standard bank CD’s, you might want to consider becoming a lender on Lending Club. Lending Club gives you the opportunity to invest in Notes that represent loans made to pre-screened borrower members.

Lending Club members have enjoyed an average annual return of 9.05% over the last 18 months. Of course there are some risks involved, but if you are careful about which borrowers you choose and don’t take on too many high risk loans, you can earn some excellent residual income from the interest on Lending Club loans.

I have not personally used Lending Club – but I have been a lender on Prosper, which is another person to person lending website and the results have been great. I am averaging 12% interest on all of my loans, but I did have one small $50 loan that defaulted. That’s why it is better to have a large portfolio of loans and not give any large sums of money to one specific borrower.

Prosper is currently waiting for approval from the Securites and Exchange Commission and they are currently not accepting new loans. So if you want to get into person to person lending to create residual income through interest, then Lending Club may be your best choice. Lending Club does the hard work for you: verifying borrowers’ identities, assigning loan grades and interest rates, and processing monthly payments. All you have to do is chose the Notes you want to invest in, and watch your money go to work for you. They set interest rates based on historical default trends as modified by the current economic climate, among other factors.

Lending Club’s notes are offered pursuant to a prospectus filed with the Securities and Exchange Commission. Lending Club members should read the complete description of the Notes and the risks associated with making an investment, as well as the other information about them and their platform in their prospectus.

You can visit Lending Club’s website here: Lending Club

Let us know what you think about this review of Lending Club, if you have compliments, complaints, comments or you think it is a scam – let us know by commenting below…

Best regards,

Michael-John Wolfe

TAGS: Residual Income, Make Money Online, Royalties

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Make Interest Income Lending with Prosper

MJ Wolfe — Sat, 31 Jan 2009 17:50:16 +0000

I was really excited the first time I discovered Prosper. Prosper is a new person to person loan marketplace on the internet that very well could be the future of lending and borrowing. Prosper provides a new way for individuals to obtain small loans ranging from $1,000 to $25,000.

Here�??s how it works: A prospective borrower goes online to Prosper and inputs all of his or her personal information and submits to a credit check. This credit check is based on his or her FICO score and from this score the borrower receives a credit grade. The grade that he or she receives determines their loan�??s interest rate. Once they have completed this first step, an ad is posted on the website that explains what they will be using the allocated funds for.

Borrowers can even upload a picture of themselves for their lenders to view. Once their loan request is approved, their ad is posted on Prosper for the world to see. (Although their credit score, debt to income ratio and other information are posted the borrower still remains anonymous.)

Now the bidding begins. Lenders can pick and choose whichever loans they would like to bid on and place a bid as low as $50 on any given loan request. This allows lenders to not only earn the interest on this specific loan, but to bid on multiple loans to diversify their lending portfolio.

After all, if you have thirty loans out and one person defaults at least you would only lose a small portion of your lending funds. You would still be earning the nice interest rate off the other 29 loans. This risk of default might keep some people from dabbling in the Prosper marketplace �?? but it shouldn�??t.

If you choose the right people to lend to, then your risk should actually be pretty small. Focus on individuals with good credit, low debt to income ratio, verified bank accounts and those who have good usage ideas for the funds. If a borrower fails to make his loan payments, Prosper even has their own collection agency to help lenders recoup any losses.

I have made 8 loans so far through prosper, 7 of which are paying roughly 12-15% interest. One of my loans however has defaulted and the borrower is 3 months late. So as you can see there are some risks involved with lending through prosper.

Currently, prosper is not accepting new loans or lenders – they are waiting to get their approval from the securites commission. Once they are approved – hopefully they will be up and running again. This temporary hiatus has not affected the payments that I have been recieving.

Considering that at typical bank CD earns only 3 or 4 percent – Prosper may be a great way to build residual income from interest.

You can visit Prosper’s website here: Prosper