Loan Cartoon

My Year of Loaning Money to Strangers

One year ago, I started loaning money to complete strangers via Lending Club and Prosper.  My returns are 7.30% and 8.85% respectively.

Sure, I’m flashy, devil-may-care, makin’ the scene…  But when it comes to playing banker, I am quite conservative.  I chose to lend only to people who had the highest credit rankings and were deemed lowest risk to default on the loans.

$25 was the most I lent to any of the 30 people. None of them have defaulted. Four have paid back the loan in full. Screen shots and video below.

If I lent to less qualified people, I’d get more interest, but that nice return could get torpedoed by defaults – just like a real bank.

Cash flow problem? More inclined to borrow than lend? You can do that too!  It’s anonymous for all parties.

If you are carrying credit card debt, these are the steps I suggest:

  1. Get a Chase Slate 0% Balance Transfer card. Move your high interest debt to it.  No transfer fee. No annual fee. No interest for 15 months!  Click on Chip’s Favorite Credit Card Offers for up-to-date deals, terms, and conditions on this card and more.
  2. Use Lending Club and Prosper to borrow money from regular people at a rate cheaper than your high interest credit card or a personal bank loan.

You can see my original post about Peer-2-Peer Lending.  It got the attention of people who put me on FOX Business to talk about it.  Here is the video from last year: