Superb.

The biggest risk you are assuming is losing ALL of your investment. As for LC folding up and you losing you money, they have documented that in their FAQ:

https://www.lendingclub.com/info/faq.action#g9

I also have a complaint about the way Lending Club signs up new customers. It does not make these requirements very obvious until you have already signed up and possibly sent some money into your account which you then cannot spend. On top of that, if you funded via paypal Lending Club will hit you with a $15 fee to withdraw your funds. Very annoying!

If I had zero risk of default, or the site shutting down and taking all my money, I would probably lend 500K for that 10% return. Alas, it’s kinda like Lasik eye surgery.. the whole concept is still early, and who knows what will happen.

Maybe i’ll just try $1,000 and see how the experience goes yah? 10-11% return is just phenomenal, and I’d do that FOREVER if the returns were close to guaranteed.

Rgds,

RB

Rich By 30 Retire By 40

What is the maximum amount you guys would lend on Lending Club? I could loan someone 100k if i knew i would get paid, but i just don’t know. If anybody is serious about a loan, you can let me know.

Rgds,

RB

Rich By 30 Retire By 40

Hopefully for Matt, the monthly payments on the consolidated loan is lower than the combined monthly payments on his original debts — increasing cash flow to help with whatever cash binds he may be in.

Debt is a tool (if used wisely) — and so far, this looks like a wise decision on Matts part. Now, if he continues to use the CC, well then this scheme will turn out badly.

Other options Matt could consider: stop retirement savings, sell assets, extra part-time jobs, build emergency fund to stop using CC, etc — which is everything I did to get out of debt. I never had bad interest rates so I didn’t do the debt consolidation ‘trick’.

**EDIT** Looks like Matt posted just before I did

The $4,500 unplanned expense was not charged to any credit card, and was actually the foundation of why I alter the Dave Ramsey idea of building only a $1,000 EF while repaying debt. It was not a sufficient amount to cover our emergencies. So now instead of having only $1,000 I continue to put 75% of my available funds toward debt repayment and 25% continually toward EF and other savings, such as my Auto Fund… so I can build money for unseen expenses while simultaneously killing debt.

Since starting my Debt Free Adventure in January of 2009, I have NEVER used my credit cards.

My wife used hers twice, both because of unplanned/unbudgeted expenses. Once for a car repair and once for a summer class… both of which were instances we had missed in our budget, which we all know is a living document. Our budget has only been going since January of this year, so it is yet a baby that needs nurturing & correction.

The loan from lending club will cover $11,000 of our remaining $11,700. The other $700 will be paid off by my wife separately (it is what remains of the $800 she charged) over the course of the next 2 months with money from her checking account. The combined solution of a living budget, and continually funding our savings funds are reactions & solutions to those two charges ensuring that it does not have to happen again.

A recent post from Jabs’ DFA blog had this:

“We have run into a very expensive unplanned expense that has cost us around $4,500 over the course of the last few months. It has caused me to cut back to only putting $100 on each of our 3 remaining credit cards, thus severely hampering our ability to hit our goals.”

And this:

“Once again, my wife had to charge and unplanned amount to her credit card. It was for a summer class she has to take once every two years that we had failed to budget for. Argh! ”

He still has the cards and still uses them. So why feed the debt monster with more loans, freeing up more space on the cards?

Rob G from LendingClub

-Erica

This is a great way to symbiotically help each other. You make interest money by lending to someone you’re familiar with… and I consolidate my debt under a lower interest rate & pay you instead of the big banks I’m unsatisfied with!

It’s a win/win.

https://www.lendingclub.com/info/faq.action#l20

This Note sounds like a safe bet seeing how fired up Matt is in his debt-payoff goals.