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peer to peer lending
As awesome as peer to peer lending is, not every state has it open to borrowers or lenders. Simon Cunningham shares the current development in the industry.
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Earlier this week, Simon Cunningham from Lending Memo had been tremendously helpful with explaining how peer to peer lending works and getting started with investing.
Talking was fascinating and just intriguing because this can be an opportunity where you are helping someone get a better deal with their finances and at the same time make some money.
More States Opening Up to Peer to Peer Lending
Being unfamiliar with the industry, I asked Simon if there were any developments or trends that he was excited about.
He told me that he was hoping more states would open up so people could both borrow from and invest in P2P with sites like Lending Club and Prosper. Currently, around 45 states were open for borrows, but just over half were available for potential investors.
That means millions are losing out on a chance to be a part of this market.
He’s hopeful that more will open in up in the near future (he explains in the podcast). He keeps updating the progress on which states are open to peer to peer lending on his site.
More About Couples and Money Next Week
Please join us Monday when we have Tai and Talaat from His & Her Money share their story and advice on How Two Spouses With Opposing Financial Habits Can Win With Their Money.
Looking for a place to invest your extra cash and help others? Today’s show goes over the investing side of peer to peer lending with Simon Cunnigham from LendingMemo.
Many personal finance bloggers, including myself mention how peer to peer lending can help you pay off debt faster by consolidating and getting more favorable rates on sites like Lending Club and Proper.
But what about the other side – could you make money investing with peer to peer lending?
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In this episode we’ll go over:
- what peer to peer lending is
- the risks and benefits of investing in peer to peer lending
- and how to try it out to see if it is the right fit for you
And to help us Simon Cunningham from LendingMemo will explain the big picture, using his expertise and experience with LendingClub and Prosper.
What is Peer to Peer Lending?
Peer to peer lending at its core allows people to lend others. It’s like crowdfunding, where many investors contribute to give a loan out. With sites like Lending Club, you can apply for a loan or invest in one fairly easily once you pass the vetting process.
Borrowers may have a very affordable solution to help consolidate high-interest debts into something more manageable. But of course, there are two sides with these loans and with investors, peer to peer lending can be a fantastic opportunity for investors.
How to Invest in Peer to Peer Lending
While some may be apprehensive with the idea that peer to peer lending a viable way to make money, Simon points out that the business model does work.
Peer to peer lenders have improved and streamlined their process for borrowers through the years to make loans accessible, yet there is still screening that has to be completed.
Investing in peer to peer loans isn’t complicated, but it does take a plan, which includes diversifying. You don’t want all of your money concentrated into a few loans. Instead you can have notes as small as $25 spread across several loans.
If you’re curious about getting started, you should definitely read Simon’s guide to investing with peer to peer lending on Lending Memo. With $2,000, you can dip your toes into the water and see if it’s the right fit for you.
And if you’re on the fence about investing still, perhaps exploring Lending Memo can motivate you to give it a try.
Thoughts on Investing in Peer to Peer Lending
I’d love to hear from you – have you ever used peer to peer lending sites like Prosper or Lending Club? Did you borrow or invest funds? How did it go for you?