My start with Lending Club

I took a chance and got started with Lending Club* last week. It's a peer-to-peer lending site similar to Prosper. I signed up and received a $25 bonus in my account and deposited $50 (money that I had acquired through various additional income sources) for a total of $75.95 (the $0.95 was a verification withdrawal.) This will allow me to fund 3 separate loans to experiment. I'm not investing any money that I can't afford to lose at this point, because it's risky, but I think this could be a good way to diversify investments, particularly before I'm able to invest in the stock market.

The process was quite simple. I signed up, verified my identity, and waited for the verification withdrawal from my bank account. A day later, I was able to deposit funds and received my $25 bonus. I manually chose the loans I wanted to fund (you have to deposit $500+ to create an automatic portfolio) and funded each with the minimum of $25. LendingClub allows you to view FICO scores, debt-to-income ratio, history of deliquencies, and number of credit lines to aid in making the decisions.

Currently, I have one loan that is actually funded, and 2 more in processing. One is a "B" rated loan, giving a 9.76% interest rate, and the other two are "E" rated, giving 14.18% interest rates.

All in all, giving out the money was a very easy and painless process. I expect my first payment to start coming in on April 1st. If this works out, I'll look at putting a total of $825 on the site over time, allowing me to reinvest the monthly payments into a new loan, making the entire thing self-sustaining.

*This is an affiliate link. If you sign up via that link, you'll get the $25 bonus, and $10 is deposited into my account.