re: Tell me about lendingclub.com - pretend I'm a 4-year old child

It's the definition of peer-to-peer lending. Effectively it is just credit card receivables, as they are unsecured. However, you are compensated for the risk of being unsecured with a much higher rate. Since you can buy in chunks as small as $25, you can become very diversified. The site gives over 100 credit metrics, but their underwriting and rating systems are very good, so I just buy as many $25 chunks as possible to achieve greater diversification. When you hit 100 notes, you have achieved sufficient diversification, but I try to get as many different notes as possible.