Passive Income

A few months ago, I followed my buddy John’s affiliate link over to Lending Club. If you have never checked out his blog you really should. Passive Family Income is the first site I read in the morning before heading off to work. It is good stuff.

Anyways…Lending Club was having a deal at the time. For every person that signed up, the referrer was SUPPOSED to get $25, while the new member’s account would be credited with $50 to begin their peer lending experience.

From Lending Club’s website:

Rather than spending money on advertising, we’d like to give that money to you, our members, for introducing your friends to Lending Club.

The last time I ask John about this, he still had not receive his income, but I did get receive $50. As such, I immediately set out to lend this money to someone who really needed it. My lending strategy, can be boiled down as follows:

• Credit Score Over 700
• Using Loan to Reduce Debt
• Zero Delinquencies in Past 2 Year

Note #1

Amount: $25
Weighted Average Rate: 9.63%
Principle Received: $5.17
Interest Received: $0.59
Outstanding Principle: $19.83
Status: Current

Note #2

Weighted Average Rate: 9.63%
Principle Received: $1.81
Interest Received: $0.59
Outstanding Principle: $23.19
Status: Current

So far, this little experiment is going rather well. In fact, I was thinking about investing a little more. I would love to hear about your experience with peer-to-peer lending.

If you get a few minutes, go check out Lending Club and let me know what you think.

Have you had good experiences with Peer Lending? What words of caution would you give me or someone else thinking about starting a peer lending portfolio?

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I look forward to reading PassiveFamilyIncome’s peer-to-peer lending reviews each month. Peer lending is one stream of income that always interested me, even though I never seemed able to pull the trigger. I cannot stand what is going on in the credit card world right now.

How is it fair that the credit card companies can change your interest rate even when you have never been late? How is it legal that they are able to charge someone 25% interest? How is it ethical to hit a borrower with over-the-limit fees when the stupid interest is what put them over the limit?

All of these things have bothered me for years. Today I have decided to do something about it.

I first read about peer lending on PFI. I think that John mostly used Prosper and Lending Club for his lending. Since Prosper is currently not accepting new lenders, I joined Lending Club. The cool thing about this is that since I joined under someone else’s link, Lending Club gave me $50 to start my lending career off right! Not a bad return on investment.

It took about 5 minutes to complete the paperwork and I was off and running.

Now comes the hard part. I have to decide who to lend my money to. Since this blog focuses primarily on debt reduction and passive income, I have decided to make this my lending criteria:

• Credit Score Over 700
• Using Loan to Reduce Debt
• Zero Delinquencies in Past 2 Years

What do you think? What is your lending criteria? If you are considering trying peer lending, please consider using the following link – LENDING CLUB. It will give you $50 (FREE) and me another $25 (I think).

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