Did you know that you can earn easy passive income online by investing with a peer-t0-peer lending website? These peer lending websites can replace banks by offering borrowers a competitive rate on a loan. Even people with bad credit can get a flexible cash loan. But they also offer investors a pretty good return on their capital and a better rate than most bonds, CDs or bank accounts. If you are looking for a cash loan fast or if you are an investor looking to make some passive income monthly, then you need to check out the sites Propser and LendingClub.
What is Peer-to-Peer Lending?
With these lending sites you can replace banks. You cut out the middle man (the bank) and go directly from borrower to lender.
The borrower might be a person looking to consolidate their credit card debt or someone who needs money for a house repair, business venture, or just about anything.
The lender is an investor looking for a solid return in this low-interest rate environment. Instead of risking your money in the stock market, you can get potential 8-10 percent returns from a peer lending site.
With US Treasuries paying less than 3 percent and the stock market barely returning anything, this looks like a very attractive option for income investors.
Flexible Cash Loans with Peer Lending Sites
For borrowers with bad credit how can you get a cash loan with a decent rate? Peer-to-peer lending sites solve this problem.
Appyling for a cash loan - if you apply you should have a decent chance of getting approved for a loan with interest rates varying from 6 percent to 25 percent, depending on your credit and history.
How Much Can I Make on LendingClub or Propser?
According to LendingClub, three-year loans rated B1 (whose borrowers typically have a FICO credit score above 720) pay a 10% average annual interest rate. Once defaults are taken into account, the average annual return from Lending Club's B1-rated loans falls to about 8%, the company says.
Can I lose money investing in peer-to-peer lending? The downside to this is if the person defaults on the loan, there is no collateral for the lender, meaning there's a good chance you would lose your capital.
However, this risk can be mitigated by investing in a large number of loans. LendingClub allows you to fund only a portion of the borrower's request, meaning you can spread your money to literally hundreds of loans to lessen the risk and still get the same amount of passive income.
Propser has said that since 2009, investors with at least 100 loans in their portfolio have never lost money.
Tips on Using Peer Lending Sites Like Propser and LendingClub
- First, you should start out by only lending to high-quality borrowers. You will get less of a return on it, but it will be a safe bet for your money.
- Again, you should spread out your loans to many different borrowers to lessen risk of default. You will still get good returns.
- The best part about this is that you will get your payments monthly, giving you a solid monthly passive income from peer lending!
Why Passive Income is the Best
Passive income is unlike income from a job because you don't have to put in much effort to get it!
Forms of passive income include: income made from blogging online (royalty income), income from real estate investments, stock dividends, etc.
If you re-invest your passive income, you will make even more money every month. The process repeats itself over time and you will be amazed at just how much passive income you will be making in time.
Many people here on InfoBarrel make good passive income - some in the hundreds, others make thousands. Sign up here to get started.
If you are interested in investing for passive income in the stock market, check out some of the highest quality ETFs that pay a monthly dividend.
I wish you the best of luck investing in peer-to-peer lending for passive income!