I’m an investor at Lending Club. I started out putting in just $100 because a friend suggested I try it. Now I think I’ll be contributing more frequently. You see, despite my broker’s best efforts (I am not loosing money in the market right now), my lending club is earning 10.98% while my IRA is falling substantially short. (Though not negative–a special thank you shout-out to Dean S. at Edward Jones!).

Lending Club is a peer to peer lending platform, where investors like me can put out little loans to others (lots of little loans from investors makes one large loan to a borrower). I’ve bought four loans at $25 each, and they’re doing quite well. I earn interest on them every day and it’s fun to take a look at the interest accruing. I’m just one month in to my investment and I’ve already earned $1.18. More principal payments are due in the next week or two, so I should be getting a little more income this way. I’m helping someone else out (I think all of the loans I purchased are debt-consolidation loans), and I’m making a little residual income.

It’s fun to browse through the borrowers and choose the person you’re willing to fund (you can ask questions if you want to know exactly how they’re planning to pay you back!). Remember, these are loans, just like if you were to spot me a $20 for lunch. There’s always the risk that the borrower won’t repay, but unlike loaning a friend a few bucks for lunch, Lending Club has an excellent debt-collection team, so you can be assured they’ll track your borrowers down for you. Also, they’re invested in their loans too–so A: they think it’s a good investment and B: They’re on the hook as much as you if the loan goes sour.

In a further vote of confidence, Lending Club announced this morning that they’ve just received their 2nd round of VC funding, which is great news! They’ve just received another $12million in capital to keep up their growth.

Here’s a cute video about how it works: