For Those Who Wonder – Is Lending Club Legit?

Is Lending Club Legit - Dumb Passive IncomeIs Lending Club legit? Yes. I happen to know that 170 people per month in the United States wonder about this very topic. I have to ask myself – who are these people that are wondering whether or not Lending Club is legit. They have to be one of two types of people. Either people who are looking to borrow money via personal loans or people who are looking to invest money. It is perfectly reasonable and rationale that they are skeptical. Borrowing or investing money 100% online in a peer to peer format seems a little bit sketchy. Is peer to peer lending safe? Is it safe to borrow money online from a P2P site like Lending Club? How much risk is involved if I am considering investing on a site like Lending Club? All of these are fair questions and I will do my best to point you in the direction to answer them and prove that Lending Club is in fact 100% legit.

Thinking about borrowing money at Lending Club?

Click here to get more information and start your application process today! 

Borrow at Lending Club

Want to be an investor at Lending Club like me?

Click here for more information and open an investing account at Lending Club today!

The Lending Club Story

I started investing at Lending Club in late October, 2012. Around Christmas time of that year I stumbled upon a book called, The Lending Club Story. I was thrilled that somebody wrote a book about the history of the company that I had recently started investing through. I immediately bought the Kindle version, which was selling for only $4.99 at the time. I read the entire book in one day! I absolutely loved the book and highly recommend it to anybody who is either already a borrower or investor at Lending Club – or for anybody who is on the fence and wondering whether or not Lending Club is legit.

Here is the book description from Every now and then a company comes along that completely transforms an industry. Today, what Lending Club is doing to the financial services industry is truly revolutionary. The way we invest and borrow money is being changed forever. With over $1 billion in loans issued Lending Club is quickly moving towards the mainstream of consumer finance. Peer to peer lending can no longer be ignored as a passing fad, it is clearly here to stay. The Lending Club Story is the first book ever published about Lending Club, the world’s largest p2p lender. It is part storytelling, part investment guide and part reference book. In this book Peter Renton, the publisher of the most widely read blog on peer to peer lending, will explain:

  • What is peer to peer lending and why it is becoming so popular
  • How Lending Club went from just an idea to $1 billion in loans in less than six years
  • How a little startup called Lending Club thrived during and after the financial crisis while some of the largest companies on Wall Street were collapsing
  • How investors are benefiting from this new kind of investment
  • How the borrowing process works at Lending Club
  • What the future holds for this fast growing company

Many intelligent investors from successful hedge funds as well as small mom and pop investors are moving money away from the stock and bond markets and into peer to peer lending with Lending Club. After you have read this book you will understand why.

Lend Academy

As I read through the book, I discovered that the author also runs a blog that is completely dedicated to the peer to peer lending industry. Peter Renton has put together a very useful and valuable resource for anybody interested in any aspect of P2P lending. His site is called Lend Acadamy and he provides all sorts of great information, including insider stuff from sources that the average blogger might not have access to. Peter scours the internet for news, tips, resources, reports and anything else that has to do with peer to peer lending. He reports on his findings both through social media, as well as on his blog.

Are you still wondering about the legitimacy of Lending Club after seeing Peter’s book and website? If so, I would simply ask you this question – why would somebody like Peter devote so much time and energy to the subject if it wasn’t legit? And no, Peter does not work for or have any ownership in the company. He is just a regular guy who has borrowed through and who currently invests in peer to peer lending notes at Lending Club.

Is Lending Club Legit?

Still not convinced? Why not take a look at their website yourself. Thinking about borrowing money at Lending Club? Click here to get more information and then head over to Lending Club and apply.

Borrow at Lending Club

Want to be an investor at Lending Club like me and earn some of those great returns without the volatility of the stock market? Click here for more information on how to open an investing account at Lending Club.

My Lending Club Performance to Date

This will be my last attempt at proving the legitimacy of Lending Club in this post. I have previously written a detailed post about exactly how I got signed up as an investor at Lending Club and all of the steps that it took. In that post, I claim that I am earning passive income from this venture. I call it passive because I consider it “passive enough.” I spend usually not more than 30 minutes per month managing my account and re-investing my payments and interest into new notes.

Because I live in Michigan, I am only allowed to invest in notes through the secondary note trading platform which is run by Foliofn. I wrote another detailed post about that, which explains my strategy for buying Lending Club notes and the exact process that it takes. I am using an aggressive strategy and I have been able to maintain a Net Annualized Return rate of just over 22%. I’ve had money invested at Lending Club now for just over 4 months. Here is a screenshot of my account summary for today (March 1, 2013).

Account Summary Feb2013 - Lending Club


Since this is the day I logged in to do my end of February account management, I decided to re-invest much of the $32.17 that I had in available cash. This is money that was paid into my account via principal and interest payments from borrowers for the notes that I own. I clicked on the Trade Notes button at the bottom which took me right over to the Foliofn website. I set my parameters and found this note in less than 10 minutes.

Browse Notes - Lending Club - Feb2013


I highlighted some of the things that stood out to me and got me excited about this note:

  • A – Yield to Maturity 36.8% – this is the rate of return I can expect if the borrower doesn’t default and I hold the note until it is completely paid off
  • B – 52 months of payments remaining – I like to look at 60 month loans that have at least a few months of payment history – 60 months loans get higher interest payments on the front end
  • C – $18.00 Asking price
  • D – $23.48 Value based on Outstanding Principal plus Accrued Interest
  • E – Loan shows as being current with an arrow pointing sideways which indicates no change in credit score. Clicking on the link that says Current brings me to the Loan Performance page for this particular loan

Loan Performance for Lending Club Note Trade Feb2013


This borrower had made on-time payments every single month until just recently. Their February payment is still showing as processing. I like the fact that the borrower contacted Lending Club themselves which tells me that they are being proactive in trying to make their payment. The current owner of this note apparently freaked out because they went a little bit late last month so decided to sell the note at a deep discount on the note trading platform. Since my approach is aggressive, I am willing to take on that risk. I don’t think this borrower is going to default and I think I am going to end up with a sweet return on this note!

In addition to this note that I purchased for $18, I found another note that I purchased for $13. That’s a total of $31 that I re-invested from the $32.17 that I had available. I spent less than 30 minutes in my Lending Club account and the note-trading platform, which is typical for what I do each month. I will do the same sometime at the end of next month.


So, is Lending Club legit? There’s a book about it. There’s an entire website dedicated to the industry. Their comprehensive website is legit, user-friendly and ready to go. They have advertisement banners to promote their products and services. I have been researching the company and the platform and even opened an account myself. I read blogs by others who also invest at Lending Club. So, yes. My conclusion for you is that Lending Club is totally and completely 100% legit.

Thinking about borrowing money at Lending Club?

Click here to get more information and start your application process today! 

Borrow at Lending Club

Want to be an investor at Lending Club like me?

Click here for more information and open an investing account at Lending Club today!

And don’t forget, there are several dumb ways to create passive income online, but only one site that is blogging about it! Dumb Passive Income… dot com.

Image Credit

Image: cropped version of “payday4” from Flickr by americans4financialreform