7 responses to “Using the Social in Social Lending”

  1. bbrian017

    This is an exciting and interesting idea… so I can borrow money and repay with interest from complete strangers? This just feels wrong but sounds like an amazing opportunity.

    1. richescorner

      @bbrian017 Just think of this as crowdsourced borrowing. It’s what banks have been doing it for years. I think we’ve just been conditioned to feel like it’s wrong so that the banks could keep a monopoly on this business. But it’s a great opportunity both for borrowers to get better interest rates as well as lenders to participate in a higher return investment.

  2. ThomasDeLong

    I absolutely agree. I’ve been investing the same way since 2010 on Prosper. I’ve noticed that reading the description not only gives you a sense of the borrower, but also highlights things that their credit information can’t capture, (such as additional household income from their spouse) which can help investors better asses the riskiness of the borrower.

    1. richescorner

       @ThomasDeLong Absolutely!  The answers to the questions provide a lot of nuances that can really help distinguish the individual borrower.  This is particularly true if you are sifting through the higher interest (riskier) loans as I am.

  3. Mike

    Were you disappointed when Lending Club changed their policy with respect to how lenders could ask their questions? I know a lot of people stopped investing because Lending Club limited them to stock questions.

    1. richescorner

      Actually, no.  I know others had that reaction, but I’m ok with the stock questions.  The reason is that I’m much more interested in the way that someone answers a question rather than simply the information contained within.  I figured I’m still able to get the same information by seeing how someone answers the stock questions.  Frankly, I haven’t noticed any difference in my investment performances after the change than before.

  4. Lending Club: How it Works

    […] over year.  You can read about my specific methods for picking investments in my article about using the social in social lending to learn my specific methodology for getting such a great […]

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