I was recently introduced to Lending Club and it seems like a great program. There are two “sides” to the program. You can either invest money and loan it out to others or you can take out loans at a lower rate than you are paying on your debts. Right now there is a $25 bonus for opening an account.
INVESTORS
You can get a $25 bonus if you sign up as an investor. It is an easy bonus. Simply create an account and fund it (bank account, paypal, or wire transfer) You can use the money to fund loans for other people, private lending . You invest in $25 increments. Each person has a letter grade as to how risky the loan is and you can see what they want the money for along with their credit history. You can get anywhere from 7-19% on the loans. That is a lot higher than banks, money market accounts, or even the stock market right now.
After I signed up for an account I got an email saying I could get another bonus for funding the account and investing the money If you funded your account with $2500-$14999 then you would get an additional 1% bonus ($25-$150). If you fund it with over $15000 then you would get 1.5% ($225+). Hmm, if only I had $15K laying around! This is in addition to the first $25 bonus.
BORROWERS
The other side of the coin are the people who are looking for a loan. There are people looking for loans to pay down debt, do home improvement, go to school, and many other reasons. Depending on what your rate is like at a bank (or on your credit card) you may be able to get a lower rate going through Lending Club. So if you need to borrow money then it might be worth a look to see what your rate would be through lending club. There is no “sign up” bonus for borrowers, but it could save money if you have a high interest loan that can be reduced.
I love “do nothing” money so I definitely took advantage of this one. I’ll let you know how my investment goes!