Reputation of The lending Club microlending company

[jakesteele]

I have been interested in microlending lately and I would like to get the low down on it. From what I can tell you have no-profit investments like Kiva so you can do something charitable. You then have for-profit ventures in foreign countries and then there are some of these companies that lend within this country, like The Lending Club
https://www.lendingclub.com/landing/partner.action?partnerID=60808&gclid=CImV06uTxaQCFQQCbAod9gIJCw

Anyone know about whether this is a safe venture or some kind of scam. The Lending Club claims a 7-9.5% profit, with a very low level of loan defaults. Too good to be true, or not.

[The Don]

The only one I can comment on with any degree of knowledge is Zopa.

They apply the same kind(s) of selection criteria as mainstream lenders and combine that with credit checks. The default rate I've experienced so far in a few months is zero, but then again I sought to loan at comparatively low rates and as a result got fairly low risk borrowers.

IN Zopa, the deal for the borrowers doesn't seem that great, not least because there's a fixed £124 arrangement fee, regardless of the size of loan.

The LendingClub seems similar so:

- To get high potential returns you'll have to take on riskier loans
- They'll take fees both sides - this isn't a charity
- The loan pool is comparatively small $167m

LendingCLub isn't as up front about default rates as I'd like....