1 year, 6 months ago
Is Micro-Lending a socially acceptable way to make money?
Please consider that I am investing in only US borrowers. Also consider the predatory rates that are being offered (up to 25%). I'm not looking for a moral judgment to my issue. I am more looking for opinion. Has anyone ever borrowed from a micro finance site?
Please share your results whether you loan or borrow; good or bad.
I am trying to figure out if this is a good long-term alternative to the stock market.
http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm
Please share your results whether you loan or borrow; good or bad.
I am trying to figure out if this is a good long-term alternative to the stock market.
http://www.businessweek.com/magazine/content/07_52/b4064038915009.htm
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$1 Answer
I think that it's a good idea and one that you certainly can add to your portfolio of investments but I wouldn't put all my money in it, counting on it for the long-term. No one can predict if it is indeed a good alternative to the stock market because the future is unpredictable. The stock market could produce high returns in the long-run or it could completely crash.
I've researched www.lendingclub.com and their competitors because I was interested in lending too for high returns. The lenders are graded based on their credit scores, etc. It is an open forum to ask questions about what they need the money for and learn more about the lender. The risk is high because your money as an investor is not FDIC insured compared to say a regular savings account. The minimum amount you may lend someone is $25 so you can spread out $25 to multiple people. Each month the people that lend money pay a fixed monthly amount and depending on how much you invested, you will get a partial payment including interest and minus the 1% service fee. Another risk is if the payee does not pay and defaults. The highest loan amount I believe is $15,000 within 2-3 years. There are pros and cons to it and a lot of people have been doing this for the past 2 years, earning at least 9% which of course is great in this economy. But again, think of the risks and if you are willing.
I've researched www.lendingclub.com and their competitors because I was interested in lending too for high returns. The lenders are graded based on their credit scores, etc. It is an open forum to ask questions about what they need the money for and learn more about the lender. The risk is high because your money as an investor is not FDIC insured compared to say a regular savings account. The minimum amount you may lend someone is $25 so you can spread out $25 to multiple people. Each month the people that lend money pay a fixed monthly amount and depending on how much you invested, you will get a partial payment including interest and minus the 1% service fee. Another risk is if the payee does not pay and defaults. The highest loan amount I believe is $15,000 within 2-3 years. There are pros and cons to it and a lot of people have been doing this for the past 2 years, earning at least 9% which of course is great in this economy. But again, think of the risks and if you are willing.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
I've been on Lending Club for over a year now and am pulling in 11%. I didn't mean to make this an ad for them. I really like the site. I am sort of looking for anecdotal evidence of it either working out or crippling a borrower's finances.
Thanks for your answer.