If you are an investor looking to earn more than what the current going rate is, or you are a borrower that wants to pay fewer dollars than what the banks are asking, Lending Club might just be the platform for you. 

They are turning the banking industry upside down because their P2P (peer to peer) lending model makes promises that do just that. 

Peer to peer lending through LendingClub is a service that is great for those of you who want to invest no matter how much or little money you have. You can give $25. You can give 20 grands. It doesn’t matter-they have many loan products to choose from and the bulk of them are collateral free. They serve personal, medical and business needs. 

You should also be aware of some downsides of this style of lending. It’s best if we look at it from the perspectives of both the lender and the borrower. 

Investors: Read This 

With interest rates on fixed income and safe investments coming in at below 1%, LendingClub will offer you a real piece of opportunity to get some seriously high returns. You can look forward to average returns of anywhere between 5% and 8.7%. (No, I am not kidding). 

These are GREAT rates, but there are a bunch more risks that are associated with Lending Club than you get with bank CDs. You also have to meet certain investor requirements. The higher the risk, the greater your reward. You know how this game works. 

For your investors, be aware that notes are NOT available in all states. Those of you in KS, MD, OH, OR, and DC will not be eligible. 

You must have an income of at least $70,000 to invest, but it could be higher in your state. The income requirement generally does not apply if your net worth is, at minimum, $250K. You will also be required to invest no more than 10% of your net worth into the Lending Club notes. 

Minimums are $25 requirement to invest in a single note and minimum opening account is $1000. 

Choosing Notes and Collecting Returns

You can invest manually, or you can invest automated. In manual you will browse available loans and choose which one you want to invest in, one at a time. In automated, you set the investment criteria, and the notes come to you. 

You can purchase your notes in increments of $25. This helps you minimize the risk that is involved with investing in any single loan. You could purchase a small interest in 200 different loans while spending $5000. 

Fees

Fees charged to investors with Lending Club only happen when you get a payment from a borrower. You will incur a 1% service fee on each payment you receive, for instance. 

Borrowers with Lending Club

Also, you can enter the ring of Lending Club as a borrower. You can get lower interest rates on loans when you use LendingClub in comparison to a bank. So, basically you can apply for a loan anywhere! You do it all online and you don’t need to meet with somebody at the bank and get dressed up. If the loan is approved, funds arrive in just a few days. 

The website makes a “soft inquiry” on your credit too-no need to worry about damaging your credit score. You will be assigned a risk grade of anywhere from A1 to G5 (that is best to worst). Then you will be assigned an interest rate, get a variety of loan offers, and then the investors will decide if they want to invest in your cause. Then, once everybody’s on the same page, your funds will be available shortly. 

You can borrow any amount that you want to up to $40,000. You can borrow in terms of 36 months or 60 months. The amount you pay in interest rates and fees is dependent upon the loan type that you are seeking, and the loan grade you are assigned. 

Fees

The highest interest rate possible is 35.89% and the lowest is 6.95. There is no application fee, but there is an origination fee. This is typical of P2P lenders. The origination fee changes so do check it before you proceed to make sure it is okay for you. The fee is taken from your loan proceeds, and so it will only be charged if you end up taking the loan. 

There are no prepayment penalties on any loan types. 

Business Loans

When you get a business loan through Lending Club, it depends on your credit grade and the financial strength of your business. Interest rates on business loans can range anywhere from 8% APR to 32% APR, depending on your credit grade. Business lines of credit and available interest rates range anywhere between 6.25% and 21.6%. 

These products require you to pay an origination fee. These range anywhere between .99% to 6.99% of the total loan amount. 

Getting Started

The process begins by checking out your rate. This requires you to provide some general information and it only takes a few minutes. It won’t impact your credit score. 

The verification process will take a little legwork, however. They will require you to submit documentation that shows your income, such as pay stubs, W-2’s, or pension awards, among other methods. Copies will likely be required so you are compliant with the law. 

To repay your loan, you can set it up to be automatically deducted from your bank. You will get a reminder ahead of time, so you don’t forget. There will be a processing fee of $7 per payment when you pay by check. 

Our Conclusion

At CrowdfundingBum, you only pay a total of 8%. However, 3% of that is no fee at all, but a donation given to your fellow crowdfunders. It is a great way to feel good about getting the funding you need and also pay it forward. Plus, we do not charge any application fees or check your credit score. You do not need to pay any origination fees or even send in copies of your income. Check it out!


Final thoughts.

Before you go running off to Lending Club, we hope you stick around a while to find out more about all that Crowdfunding Bum has to offer. You will find ample reasons to choose us as your funding source.

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or see our frequently asked questions page