How To Become a Banker Today – Internet connection required

A few days ago I was talking to a close friend about and its rival  I was surprised he had never heard of the sites and the whole P2P (Person to Person) lending concept. So I figured it was a good time to post it up on the site to let a larger audience in on something I’ve been playing with for a few years now.

I had first heard about the concept while listening to an NPR segment and quickly became involved as a Lender.  I then found Lending as I became a little more “SAVVY” with the process.  Various news organizations like WIRED, CNN, USA TODAY, etc. have covered them.

I’m going to talk quickly about Lending Club since Prosper no longer accepts new lenders, which honestly is fine because I personally like Lending much better.

The way it works is; that first, you log in and create an account; then, you decide if you want to become a borrower or a lender.  Here’s a quick review:


As a Borrower, you go through a process as you would with any other bank (Credit Check, Address Confirmation, Credit Score, Employment Verification, etc.) Once you’re approved, you can request a loan amount and then tell a short story about the purpose of the loan.  All loans are a three-year term, and there is no penalty for early payment. Find and Invest new Loans


As a Lender, you can be as picky as you like browsing through all the various loans currently open.  You can set up filters to display only the lowest risk loans or the highest, depending on how much risk (and return) you’re willing to accept.  Lending Club also has a step-by-step wizard you can use, which allows using a slider to decide the type of loan and return you want, and it pulls the loans for you.

As you become more comfortable with the process, you can set up automated loans that meet certain criteria (Debt to Income, Home Owner, Credit Score, etc.) However, I personally like to read the details of each investment I make.

Personally, I’ve learned not to ever loan more than $25 at any given time. Also, I found it best to spread my loans out between high and low-risk borrowers.  I’ve had a few loans go bad, so that cash is pretty much gone. <sigh> However, overall, I’ve had fun and even made a <LITTLE> bit of side cash on the deal.

Again, this is NOT a get-rich-quick scheme. However, I have found it gives me a better return overall than the 1% from my Savings Account or Money Market fund.

Full Disclosure

My name is Steve Krause.  I am not a banker, millionaire, or financial planner. Although very tempting, you should not take any financial advice from my groovy blog or me.  I wrote this article because I’m a GEEK who had a few extra bucks my wife didn’t know about and wanted to try out the groovy p2p scene. After playing around with it, I actually made a respectable return on my investment which is why I’m ok with telling you, my groovyReaders, about the service. 



  1. shockersh

    March 17, 2010 at 7:55 am

    I’ve tried both Lendingclub and Prosper. Lending club is a lot better for sure (although I’m not crazy about their new UI).


    March 19, 2010 at 7:26 pm

    I love LendingCLub. To say I’m a heavy user would be an understatement. We’re trying to get a forum going to talk, in my opinion, the greatest new investment vehicle to hit the scene in generations. It’s Come and join the conversation.

    I learned about LendingClub a little over a year ago, and I’ve been investing ever since. I hit the 99th percentile today, so I’m getting the word out to everyone I know. It is time to join the p2p community!

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