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When To Consider Peer-To-Peer Lending Over Bank Accounts

Wednesday, February 26, 2014 - 12:46 PM
Harry Sit at TheFinanceBuff has an interesting answer to a question a reader asked about “whether it would be a good idea to invest some of his spare cash in peer-to-peer (“P2P”) lending, such as Lending Club or Prosper.”

In summary, if the amount you intend to invest is small, there is an easy way to earn more in a bank account. The method of using Santander Bank’s extra20 checking account is described. I posted on this extra20 checking in January.
Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,996
1. Tuesday, March 4, 2014 - 8:14 PM
I've been investing via Lending Club.  At the moment, it's something like .02% of my overall investments.  I'm earning about 10% at the moment, but I'm not really concerned if someone defaults.  I only put $25 towards each loan I invest in, and I have a good time reviewing all the possible notes and wondering who will pay it off and who won't.

Right now, my upper limit with Lending Club is 1% of total investments--even if I lost it all, it would still be a very small amount.  Why would I want to go to all the hassle of changing over my checking account just to chase a few cents? 
carlycarly26 posts since
Sep 2, 2011
Rep Points: 88