As I've been reading more personal finance blogs, I've been coming across the concept of peer to peer (or P2P) lending. One place in particular that's come up multiple times is Lending Club.
I've heard about Lending Club before, but finally decided to take the plunge when I read Stephanie's review of Lending Club on Poorer than You (which, as a side note, is one of the coolest named blogs out there). So, after getting a recommendation link from her, I set out on my merry adventure.
After filling out a few online forms, I was enjoying adjusting the little slider to determine how much risk to take. I came up with a fairly conservative, but still quite profitable arrangement, as shown below:
So, there I was, feeling good about taking this step. I've heard good things about Lending Club, not only from Stephanie but from The Writer's Coin and Rocket Finance. Besides, I had gotten $50 from Lending Club, so it's not like I even had any of my own money on the line.
However; I hit a little snafu...
Apparently, Notes are not currently being sold directly to residents of Pennsylvania. And I happen to be a resident of Pennsylvania, at least when I last checked. As such, I'm not actually allowed to purchase the notes directly. I even went as far as writing to the help desk at Lending Club, which verified that yes, I'm out of luck at the moment.
Interestingly enough, though, there's apparently no rules about buying Notes from other members on their Note Trading platform. (Which perplexes me somewhat; I'd think that if I was not qualified to buy an investment from what is essentially a brokerage house, I should not be able to buy them from other members. It's the same investments, after all; the difference is about the same as buying stocks at an initial public offering versus buying them on a stock exchange.) I'm still trying to study up on the Note Trading platform, and hopefully I'll find some good investments via that method. Prepare for more updates in the near future!