A reader named Jo left an interesting comment in response to my recent Lending Club update. As it turns out, Jo has been involved in peer lending (via Prosper as opposed to Lending Club), albeit as a borrower instead of an investor/lender.
According to Jo:
What you guys (lenders) do for us who are in desperate need of loans is a fortuitous favor. Speaking for myself, I am unable to get a loan the conventional way. For this, I am thankful.
I hope things continue to go well for you, and that those who owe you will pay you back in a responsible manner. If not, this will cause many potential lenders to shy away from this method of investing as part of their portfolio.
I, too, hope that things continue to go well. 🙂
From the lender’s perspective, there is definitely a nice “feel good” component to peer lending. That being said, it’s still important to remember that this is a business transaction. If you get too attached to the idea that you’re helping people out, you might get burned.