Lending Club is a peer to peer lending company that I have personally referred to my friends and family. I’ve been investing with LC for over a year and have been completely overwhelmed with the results. My net annualized return is 10.08% and I have yet to have a late payment or a loan go into default.

My Personal Lending Club Referral

I’m not the only one that’s benefited from these high returns. The average annual return for all of LC is 9.67%. Most fund managers would thank their lucky stars to earn nearly 10% on investments. Over the past three years, Lending Club investors have on average earned more than stocks and bonds.

Personally, I’ve found that if you are picky with your note selection, you can achieve a double digit return with little risk. I like to look at only B-rated borrowers. A-rated borrowers don’t earn you a high enough interest rate. C-rated and below are too risky. I also like to invest in people that are borrowing a small amount of money, are consolidating debt and have zero delinquencies.

With this selection strategy you are investing in real people who have never been late on a payment before. Additionally, they’re currently paying off the same amount of debt at higher interest rates. Why wouldn’t they be able to pay off your loan that will be a lower monthly payment? Also, it makes me feel really good to help people get out of debt. Everybody deserves a chance to get out from under mountains of debt.

Lending Club Borrowers

I have yet to personally borrow with LC, but I have a wedding to pay for in about a year that I might take out a loan for. Basically, my fiancee and I will have enough money to cover the wedding by the time the big day comes around, but we feel more comfortable keeping an emergency fund fully funded. We’ll have no problems quickly paying back the loan, but we might as well get the best rate we can.

Lending Club’s lowest rate for borrowers was just dropped from 7.93% to 6.78%. This rate is for borrowers classified as A1 and can get as high as 24.95% for G5 borrowers. The actual rate depends on your credit score, loan amount, loan term, and credit usage and history.

The national average and city averages in the graph are from MSN money and bankrate, respectively. For many borrowers the Lending Club rate will be the lowest rate available. Anybody with a high credit card interest rate should be applying to Lending Club to see if they can borrow at a lower rate.

I hope my personal experiences and Lending Club referral is enough to get you started. You can earn and make a lot of money at Lending Club, especially with a $25 Lending Club bonus for new investors.