Investors are forever on the lookout for interesting investment options. This gets increasingly difficult to choose from, considering there are so many options available. If you are a new investor, holding on to money like holding on to dear life, and perplexed as to where you can invest, here is an interesting proposition for you – LendingClub.
LendingClub is an increasingly popular investing platform – it is safe, reliable, and if you go about using it well, it can be life-changing.
What is LendingClub?
LendingClub is one of the first Peer to Peer lending platforms. Earlier, borrowers could not get a personal loan from the bank and would have to ask money from friends and relatives to get the funds needed.
With LendingClub, there is no need for that. What Peer to Peer lending does is that it allows individuals to invest in consumer credit. By getting banks out of the equation, investors can earn “bank like returns” but with “bank like risks”.
With Peer to Peer lending, investors don’t have to worry about paying employees and fixing up a brick and mortar location. You are your own portable, money-lending bank.
Review on LendingClub: Should you go for it?
LendingClub is an excellent investment portal. Many investors are now joining the bandwagon with this one, and there happens to be little doubt about it as to why so. LendingClub gives investors great access in the consumer credit markets. However, these investments should supplement a stock market or real estate strategy and not replace it.
If you are planning on investing using LendingClub, it would be sensible to reduce your bond holdings and your holdings across the banking sector.
Another thing of importance to know is that LendingClub loans will follow trends only in the broader consumer credit market. Lately, most loans are approaching really low on delinquencies. Some analysts suggest that delinquency rates might rise up if employment or salary stability begins to dwindle downwards.
There are pros that come with LendingClub like being able to stretch loan to repayment terms of three years and five years, no hard credit inquiry needed to check rates which allows you to conveniently shop around without hurting credit scores and low interest rates.
However, the cons include a longer wait as it requires about a seven-day period to become available which is time consuming in comparison to other modes of turning money around that do so within a day.
There is an Origination fee you might have to look into, which will cut into your loan. You should therefore weigh your options against other companies which may not have the concept origination fee attached.
Summing it up
Whether or not you decide to invest in Peer to Peer lending is a choice that remains to be yours after you weigh your options. There is a certain level of subjectivity that comes with LendingClub which may benefit some investors and may not benefit others. So tread wisely, after all, isn’t that the most basic rule of investing?