Comments on: In the Realm of Good & Bad Debt, Where Does Social Lending Stand?

By: gerald

gerald — Sun, 13 Dec 2009 08:41:30 +0000

Hello,

I’ve just come across the concept of a Lending Club, and I
don’t quite understand it as yet. Obviously one person is lending another money. What I’d like to know is how does a “lendee” contact a “lender”? What guarantees must a person give that the money will be repaid. How are the amounts of the payments reached? What guarantees are needed to ensure that the loan is safe? How are the rates of interest arrived at and who does the calculating? Is there a central headquarters which enforces rules and regulations etc.etc.

In fact, anything and everything that an ignorant person should know.
But please send to my email address, gwilson1979@gmail.com

Thank You

By: cheap cindy

cheap cindy — Sun, 01 Feb 2009 18:26:09 +0000

I think lending clubs are okay and a good choice in an emergency. As with any debt, know your limits. cheap cindy’s last blog post..Eating Out Cheap - Half Price Or Less

By: Matt SF

Matt SF — Sun, 01 Feb 2009 17:12:35 +0000

Nice post. One thing most people don't hear about P2P lending is that you aren't making the entire loan to just one person. I've spoken about Prosper and Lending Club to several friends, and question #1 always comes back "what if person X can't repay my $1000?". So it's a bit of marketing and/or facts issue since that P2P lenders haven't tackled just yet. Fact is, you're building a portfolio of consumer debt analogous to a mutual fund where the risks are spread out over a diversified number of smaller loans, not just one or two large loans. Matt SF’s last blog post..Vulture Investing: Buying the Joneses Stuff at Half Price!

By: Sunday Money Roundup - Nothing To Share Edition. | My Two Dollars

Sunday Money Roundup - Nothing To Share Edition. | My Two Dollars — Sun, 01 Feb 2009 14:01:23 +0000

[...] Frugal talks about social lending and whether it is a good or bad idea. I am a fan, that’s for [...]

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Wed, 28 Jan 2009 01:12:36 +0000

My view of any debt is that “good” debt is debt used to finance an income producing asset.

Applying that to peer-to-peer lending, I would feel better lending to a long-time manager of a fast food restaurant who wants to buy their own franchise. That type of loan has a high potential to help someone (the manager and their family, as well as the employees) and to be repayed.

By: Chris Ronk

Chris Ronk — Wed, 28 Jan 2009 00:30:19 +0000

Lending Club is an interesting concept.
I have no problem with moderate debt. It is the American way…

Actually the American way is to become completely over our heads in debt until we can no longer function.

*sigh

By: Pinyo

Pinyo — Tue, 27 Jan 2009 15:20:22 +0000

I think peer-to-peer lending is fine. I like the concept and how it works. Just like many things in life, it's also open to misuse and abuse -- and that's when things go bad. Pinyo’s last blog post..Portfolio Rebalancing and Buying Underperforming Assets

By: Joseph

Joseph — Tue, 27 Jan 2009 14:42:34 +0000

the question is misleading. is not if lending club debt is good or bad? the question i “what are you intending to use the money and how you plan to pay it back?”

If the answer is “to get out of trouble and not sure how I’m going to pay it” then it is bad… if it is “to get out of debt, and I will pay with savings from high interest rate debt” then it’s good.

I used lending club to pay my credit cards off and have since prepaid the loan. I’m now a lender because I believe in helping others out. Of course there are a few that default, but it is your responsibility to choose the loans you think are used for “good reasons”.

By: Patrick

Patrick — Tue, 27 Jan 2009 00:57:39 +0000

I've made several loans through both Lending Club and Prosper and have had nothing but good experiences (though there are people who default on their loans). I love the idea of social lending and would recommend that a family member go there if they have the need for some money and are able to pay it off. They may just get a better rate for their loan than they could elsewhere. Patrick’s last blog post..Reusable Shopping Bags - Save the Earth and Your Wallet

By: dk from Lending Club

dk from Lending Club — Mon, 26 Jan 2009 22:40:55 +0000

I went through a period where I thought absolutely all types of debt was evil. It didn’t last too long though because I realized it’s not debt that is evil…it’s only even when WE misuse debt. Sadly, that is far too often in our society.

Thanks for the mention.

dk
Product Ambassador
lendingclub.com