Lending Club is a peer-to-peer lending firm that allows individuals to partially fund unsecured loans to borrowers and earn an interest rate as profit. Many investors choose to individually pick the loans that they want to fund, but Lending Club also offers a way to automatically select loans based on criteria that you provide to simplify the investment process.
The automated loan picking tool, called Lending Match, allows investors to select criteria that they want to find loans from, then performs a search for loans meeting that criteria and spreads the investment that you want to make out between them. Theoretically, this is a great way to simplify the investment process on Lending Club.
The reality is that you should probably take some time to review each loan that you plan on investing in. Lending Match will provide loans that meet your criteria, but it’s not perfect. Lending Match can’t spot loans that have serious red flags in the same way that anyone with any amount of investment experience would. There’s no way for the software to check for major inconsistencies in loan listing and Lending Match has no way to judge many human factors that a lender might want to use to disqualify a borrower, such as poor spelling and grammar.
If you plan on investing in hundreds of individual loans through Lending Club, you will probably end out just fine with Lending Match, but if you’re only investing in 5 or 10 loans at a time, take a few minutes to search through the list of currently available loans and pick out the loans that you feel will perform the best.
