Have you thought about being a social lender?  You might not be sure what that is but social lending is the process of lending you own personal money much in the same way banks do to borrowers who need the money for a multitude of different reasons like, consolidating credit cards, medical expenses, or even a car loan.

In fact companies like Lending Club make this process very easy and simple to do.  In this article I’m going to show you how this all works and why social lending could be a big benefit to you.

How It Works

If your currently investing you money into a CD at the bank your probably not seeing much in return for it right now.  In fact a one year CD on BankRate.com is only going for around 1.55%.  With Lending Club and other social lending business you could be seeing an average of 9.5%.

This high return investing strategy is done by investing your money over several personal loans.  For example if you would have $5000 they would be able to diversify you loan over as many as 200 different loans at $25 a piece.

On the other end of the stick borrowers will apply for loans from social lenders to clean up their debt since Lending Clubs rates start out at 8% fixed and these rates are much lower than going out to get an unsecured credit card when rates with them can run as high as 33%.

The Benefits

A couple of benefits to doing this is that first you will be able earn returns much higher than the a normal CD at the bank, Lending Club averages 9.5%

Second, you will be a lot more stability and a lot less volatility than the up’s and down’s that you get when having your money invested in the stock market.

Finally, as a borrower you will be able to get high grade fixed loans with lower rates to help you accomplish the things you want to accomplish in life.

Last Thoughts…

As you can see if your looking to achieve better returns on your money social lending with Lending Club can be the way to go.  When getting started Lending Club will be able to help put together a portfolio that will fit your risk level and lending ability, and in the end this strategy can be a win/win for everybody.