Back in January 2010, I finally dove in and invested $1,000 of my own money in a site called Lending Club. Lending Club seems to be the first company in the P2P lending space who understands all aspects of P2P Lending, from both the borrowing and investing side, and brings them seemlessly together in a simple yet powerful, user friendly way. In this article I want to talk about the way lending club can be used as both a way to earn incredible returns with much less risk than other methods, as well as a way to borrow at lower rates than traditional banks to consolidate debt.

Borrowing from Lending Club was very simple.. I used PayPal for my initial deposit, so it was quick & easy. Within a few minutes I had the money in my Lending Club account and began looking at loans to invest in. I knew I wanted to diversify my risk among as many loans as possible, so if a particular borrower defaulted (did not pay back) their loan then it would not ruin my portfolio return. I invested $50 with several people who needed debt consolidation loans to pay off high interest credit card debt. I looked at their profiles first to see if I felt they would be good risks lend my money too. My criteria was to look for people with good credit, at least 680 FICO scores, good jobs with at least 2+ years, preferably 5+ years, and low debt to income ratio below 40% ( ratio of the amount of their payments to the amount of income they report). Over several days I invested in 29 different loans. That was back in January 2010. It is now mid-April and my portfolio is performing great, with a net annualized return of 13.97%. I am very happy and just put more money into Lending Club. If this return can continue I believe this may be one of the most important financial innovations of our lifetime. I believe this because returns on Lending Club are not related to the stock market, real estate, or other asset classes that are volatile and uncertain.

My experience is on the investing side, so I personally have not borrowed from lending club. However, I have several clients and friends who have borrowed using the P2P method on Lending Club and had success. It works great to implement your own “Debt Melt Down” strategy using the Lending Club loan as a consolidation tool to create a margin which then you can use to accelerate pre-payments on the lending club loan and eliminate your debt much quicker. Unfortunately, as of right now Lending Club does not offer debt consolidation loans which include a mortgage, but if they do in the future this will be a huge market for them.

Credit cards are one of the most pervasive forms of your financial picture. On a daily basis, they provide the flexibility and freedom to reserve a hotel room, travel without carrying cash, and purchase just about anything at anytime.
As such, your credit cards can have a major impact on your financial wellbeing and even your [...]

Originally Posted on February, 20th 2008 
I speak with some people on a daily basis who refuse to believe that the credit card companies have the ability to raise their rates whenever they want.  When you see articles like the one from USA Today I have posted below, it is really hard to deny.  Now, more [...]

Originally Posted on February 7, 2008 
by Barry Habib – Contributing Editor to CNBC.com 
The Federal Reserve has been on a rate cutting spree once more. Many mortgage applicants are calling their mortgage representative and expecting a lower interest rate. Others who have been waiting to refinance are puzzled as to why mortgage rates have not moved [...]

Originally Posted on January 31, 2008 
Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate “in view [...]

Originally Posted on January 23, 2008

In a nearly unprecedented move the Federal Reserve early Tuesday cut the Federal discount rate by .75 of a point, the largest single rate cut in 20 years.
The move did not come at one of the Fed’s regularly scheduled meetings but rather overnight in response to some truly dreadful news [...]

Original Post: December 11, 2007 
The President annouced a new plan last week to help borrowers who may go into default on their home loans due to adjustable rate mortgages. it definitely looks like it will help “some” people.
Below are the details of the program, however if you have ARM rate mortgage and would like our [...]

Top bank regulator suggests industry cuts losses now to prevent foreclosures.
By Jeanne Sahadi, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — The heat on U.S. mortgage lenders and servicers was turned up a few degrees this week when the country’s chief bank regulator publicly proposed that they permanently freeze interest rates on subprime adjustable-rate mortgages (ARMs) for [...]

By Ismat Sarah Mangla, Money Magazine reporter
September 18 2007: 4:17 PM EDT
NEW YORK (Money) — After the Federal Reserve’s half-point cut in interest rates Tuesday, homeowners may experience some welcome – if small – relief.
Borrowers with home equity lines of credit (HELOCs) will notice savings immediately, says Keith Gumbinger, vice president of HSH Associates.
A HELOC [...]

Originally Posted on July 30th 2007
 
We all know that the Federal Reserve (Fed) controls interest rates, but it is even more important to understand why they are adjusting them. Adjusting rates essentially increases and decreases the amount of money circulating within the economy. The Fed is acting as the throttle and the break for economic [...]