Comments on: Make Money Lending Your Spare Change

By: eken m009s

eken m009s — Sat, 03 Sep 2011 06:17:08 +0000

I’d recommend Lending Club for any money that you’d put in a CD. It’s not liquid enough for a true emergency fund (IMHO, an emergency fund shouldn’t have its principal at risk.) However, for an alternative to the stock market or certainly to CDs, it’s great.

By: Val

Val — Sun, 25 Jul 2010 04:32:31 +0000

@Joe- You are apparently uneducated in the world of online marketing and promotion. There are numerous ways to monetize a blog and not all of them are glaringly apparent. Sadly there’s a ‘black hat’ method that is unscrupulous and you’d likely never know you were being manipulated or having your information stolen or paying for some skeevie internet scammers lifestyle.
Erica has disclosed in many places that she gets affiliate commissions and she should, she’s paid the price in time, valuable content and classy presentation as well as taking time to scrutinize what she offers. So if it weren’t her blog bringing you the information which is voluntary for you to participate in, someone else presenting it would get it. You wouldn’t get to keep it. It’s a cost factored into the programs affiliate marketing program.
Why is it that some people consider it such a crime or bad in some way that a person doing business, performing a service, promoting something worthwhile should get paid for it? You probably would expect an acquaintance who was a lawyer to give you free legal advice or otherwise take your business to a stranger. What does that say about you?

She’s not your sister she’s a business woman who has put a lot of time and sweat into her writing and just because you think she should do it for nothing and that it somehow detracts from her credibility is ridiculous and petty. She doesn’t work for a newspaper although they make a salary. You have some very unrealistic views that show you as someone who’s happy to take but not give back. Whatever it is you do for a living, how would you like it if your client/patron/customer called you sleazy for taking money for it or being less worthwhile or valid? Your manners leave a lot to be desired too.

By: Glenn

Glenn — Tue, 25 May 2010 03:40:31 +0000

Hi Erica,
Thank you for the very good info and referral. Just five minutes were needed for me to sign up through your link, receive my free $25.00, and invest it!
Very nice.

Glenn

By: Le Vu

Le Vu — Thu, 18 Feb 2010 21:44:59 +0000

Nice article. It’s something I would like to try.

By: Ken Siew

Ken Siew — Fri, 29 Jan 2010 20:06:48 +0000

Hey Erica,

I’ve signed up for Lending Club using the link on your post. This seems like a fun investment alternative. Is your free ebook “Pay Less for Life” offer still available? I didn’t sign up because of that, but I’m definitely curious about what you wrote in there! =)

By: Erica Douglass

Erica Douglass — Thu, 26 Nov 2009 21:08:08 +0000

Hi Leah,

It’s definitely time for me to post an update. I started in April and currently have just over $25,000 invested in Lending Club. Like Mike (who wrote the comment above this one), I have just over 200 notes. I have had 3 defaults. I sold each of those on the trading platform for a total loss of about $25. I currently have one labeled as “late”, though the notes say the borrower has promised to pay.

My net annualized return is currently 11.97%, and I’m making a couple hundred dollars a month in interest income. This far eclipses the interest income I make from my ING Direct savings account!

I haven’t used Prosper, mostly because I’m really happy with Lending Club.

-Erica

By: Mike

Mike — Thu, 26 Nov 2009 16:13:26 +0000

Leah, before you write off P2P lending altogether, you may want to research other options besides Prosper, which, unfortunately for lenders, has a very high default rate. I have carefully invested over 20k with Lending Club. After accounting for their fee, I am running about an 11% return with no defaults and only four late loans out of over 200 notes. Defaults tend to peak between 12 and 18 months, and then decrease as people who have paid diligently for two years don’t want to default at that point and impact their credit score. Lending Club isn’t perfect, but it sure beats having my money sitting in a bank earning a paltry 2%.

By: Leah Hokmah

Leah Hokmah — Thu, 26 Nov 2009 06:51:21 +0000

About 18 months ago I very carefully invested about $3000 in Prosper.com, making very sure to screen each loan carefully and diversify. At first it was fun and I liked helping people who needed money, and the profits looked great – Prosper predicted I’d be getting 13-15% return.

But within a few months, lots of people started defaulting on their loans, even those who seemed to have superb credit. Online borrowing attracts people who are planning not to pay. Prosper predicted there might be a few, but now about 25% of my loans have defaulted. As I’ve read more, I’ve found out my experience is typical. My return is now 2% and soon I’ll be in the red.

At first when I heard others say they lost money, I thought it wouldn’t happen to me – I was smarter and luckier than everyone else. Now I’ve found out that defaults always start out small in the first few months, but then after a year, they grow until all the profit is gone. The 9% that this blog says you’ll make is impossible.

People who are excited about online lending either (A) have only been involved a few months, or (B) are making $25 for each person they convince to sign up. Erica might make some money from all these referrals, but if she invests it in lending, she’ll likely lose it to loan defaulters.

The one thing I’ve gotten out of online lending is empathy for banks. Now I know what it’s like to trust people with my money, and see them walk away laughing at the thought of repaying me. I guess that’s worth something, isn’t it?

By: Lee

Lee — Tue, 10 Nov 2009 03:44:58 +0000

Hey Erica…
I signed up. It’s funny, I was just looking at Prosper ealier today. I like Lending Club better.

By: Beverly

Beverly — Fri, 17 Apr 2009 17:29:57 +0000

I signed up. I like the idea of being able to help others get loans in our current tight economy, and at the same time, making a little myself.b