How to Get Started investing with Lending Club

Lending Club is the largest peer to peer lending company in the United States in terms of new loan origination on a monthly basis. Many investors have turned to Lending Club as a way to invest without putting money into stocks or bonds. It’s still very much an alternative investment and there is some risk involved, but it might be an interesting place to put a small portion of your money.

If you are interested in becoming a lender with Lending Club, you have the potential to earn between 8% and 12% back on the money that you invest if you follow sound strategies when choosing loans to fund.

Investing in Lending Club loans is very much an alternative investment to stocks, bonds and real estate. They are essentially an entirely new asset class. The performance of Lending Clubs generally aren’t tied to the performance of the stock market, bond market or real estate markets, so investing in peer-to-peer loans could be a good way to diversify your investment portfolio.

When investing in Lending Club loans, make sure to fund small amounts in each loan listing to prevent yourself from taking a major hit if a borrower doesn’t make his or her payments. Also look for loan listings from borrowers that have few delinquencies and have a long and stable job history.

Lending Club investors from the following states can invest in Lending Club loans: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

According to Lending Club’s website, “Individual lenders who are residents of states other than California or Kentucky must have (a) an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or (b) have a net worth of at least $250,000 (determined with the same exclusions);”

Lending Club does not appear to explicitly enforce the income requirements of its lenders, so if you make slightly less than $70,000 per year, you would likely be able to get away with investing through the service.

If you are interested in investing in peer-to-peer loans through Lending Club, visit Lending Club’s website (there’s a link on the banner to the right) and register for an account. After transferring money in from your checking account or via PayPal, you will be able to begin investing.