re: Lending Club Question

quote:

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Yes, I know it's incredibly risky.

Yes, I know I could lose 100% (or possibly more) of my investment.

Yes, I know some of the people taking out loans have low financial IQs and will probably never pay me back.

Yes, I know it seems too good to be true.

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I looked into Lending Club about this time last year. I even submitted the initial paperwork. But I soon determined that the time needed to properly manage hundreds or thousands of notes simply wasn't there for me at that time. Maybe when I retire, I'll do it. I do find it to be a very interesting business prospect.

But as far as what you're asking, since you've already acknowledged the inherent risks, the only thing I'd question is what sort of spread would you be looking at between your borrowing rate and your average lending rate? If the net (ideally) is less than 5%, personally, I'd see the reward not being worth the risk.

I like the ballsy, opportunistic way that you're thinking. But yeah, that's like holding onto a lit rocket and hoping for the best.