Skip to site content
The Show

One Stop Loan Shop

Brian and Bo evaluate an alternative way to borrow and lend money in this week’s show. They get into the nitty gritty of peer to peer lending, as well as, the real estate research website Zillow. Brian shares his personal experiences with peer to peer lending using the Lending Club website.

This week’s Money-Guy Distraction:

Before we get into the podcast stuff you have to go over to YouTube and check out Ella Sings Elvis. You’re going to love it, especially if you have kids.

Peer to Peer Lending:

Since 2008 it has been hard for individuals to find personal loans. This has created a tremendous gap in personal finance, and from this void came a new category of lending known as peer to peer lending. It is essentially an online system that allows you to meet with your peers to borrow and lend money.

Of the different websites that are available, our experience has been with the Lending Club.  As a background to the sites success here are some analytics:

  • Last year’s private offering valued the company at $500 million.
  • Google just invested $125 million in Lending Club; which brought the current value to $1.55 Billion, with a B. Talking about a return on investment, wow!
  • They have loaned: $2.2 Billion since their inception in 2007.
  • 80.66% of loans are used to consolidate debt.
  • Last month $174 Million was loaned through the site, which puts them on track to outpace their total lending in one year at that rate.
  • They make money by service fees through both borrowers and lendors.
  • Lending Club has paid interest of $193 Million to investors.
    • 1 month average annual interest rate: 14.79%
    • 36 month average annual interest rate: 12.98%
    • 60 month average annual interest rate: 17.89

The Money-Guy’s take on the Lending Club:

  • Positive: We like the investment side as a hobby (note we did not say primary investment) because there is tremendous flexibility. You can loan as little as $25 and up to $5,000 on an individual loan.
  • Brian is set to make 15.64% on an annualized basis, but realizes that this will not likely hold up because of potential loan defaults.
  • Downside: A lot of the loans do not get filled, not everyone will get approved for a loan. There is also a risk of default.
  • How you should use lending club: This is not for your emergency reserves, or to be treated as a primary investment. It is very speculative, so consider this fun money or a hobby that you can make money with. Treat it as a very illiquid investment as the loans are set at 36 or 60 months. This is a brand new category of investing that we have not included in any of our portfolios.
  • What does the future hold? This market could mature to the point that it is a part of your retirement system. (i.e.): like a pension or annuity.

Zillow.com:

Switching gears over to the popular real estate site Zillow.com, this site is an awesome resource. They break things down with easy to use calculators and they can provide local quotes for your entire home buying needs. The features that we like particularly well are the:

  • Affordability Calculator
  • Fixed vs. Variable Calculator
  • Should You Pay Discount Points Calculator
  • Closing Cost Calculator

Another great resource that we have mentioned a lot in the past is Bankrate.com. They have very helpful tools that relate to this podcast. Be sure to check out the links that we have provided and we will be back in two weeks!!

Enjoy the Show?

Where You Can Watch and Listen:

Subscribe on these platforms or wherever you listen to podcasts for new episodes every Friday, live streams every Tuesday at 10am CT, and new highlight clips throughout the week.

Related Content

Free Resources

Financial Order of Operations®: Maximize Your Army of Dollar Bills!

Here are the 9 steps you’ve been waiting for Building wealth is simple when you know what to do and…

View Resource

Wealth Multiplier By Age

How much to save every month to become a millionaire.

View Resource

Home Buying Checklist

Answer these questions BEFORE you consider buying a home.

View Resource

Articles

Where Should You Invest? (A Beginner’s Guide to Investing in 2024)

, ,

Read More

I Have $120,000 In Stocks. Can I Pull Out Money For A Down Payment?

, ,

Read More

Is Cash Now Trash Again? Federal Reserve Signals Intent to Lower Rates

, ,

Read More

Financial FAQs

Courses & Tools

How about more sense and more money?

Check for blindspots and shift into the financial fast-lane. Join a community of like minded Financial Mutants as we accelerate our wealth building process and have fun while doing it.

https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-book.png

Millionaire Mission (Brian’s Book)

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-math.png

Know Your Number Course

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-pencil.png

The Money Guy Net Worth Tool

Buy Now

Recent Episodes

It's like finding some change in the couch cushions.

Watch or listen every week to learn and apply financial strategies to grow your wealth and live your best life.

LIVE ASK WifeWorkLonger

Should I Make My Wife Work Longer?

Watch Now
FULL HowToBecomeAMillionaire B

How to Become a Millionaire By Age (2024 Edition)

Watch Now
Laid off

I Just Got Laid Off! What Now?

Watch Now