Comments on: Lending Club Preview

By: Todd Metheny

Todd Metheny — Mon, 13 Jul 2009 23:30:37 +0000

That’s a nice catch. I actually live in Missouri, too. I’m going to contact Lending Club and ask them this question. They didn’t deny me or refuse to fund my account, which is interesting, because my address is all over this. I’ll write them as soon as I can and let you know the response.

I don’t think you would be breaking a law, though. I don’t want to give you legal advice, but I think this would be a compliance issue with the SEC on their part, not yours – but that’s a gut reaction without doing any research in an area I don’t practice in. I’ll let you know as soon as I know something. Thanks for the great question.

By: Pat

Pat — Mon, 13 Jul 2009 23:17:38 +0000

Todd,

I live in Missouri and it’s not on the list of states in the T’s & C’s. Am I running a risk with the law if I still invest through Lending Club? It would be very uncool to get audited for this.

Pat

By: Todd Metheny

Todd Metheny — Tue, 07 Jul 2009 23:56:21 +0000

I would suggest a conservative amount that ends up being less than about 5% of your total investments. I don’t think it’s old enough to put too much faith in the historical figures. My wife and I are putting in $1k total to get started.

If someone defaults, the initial penalty will be a hit to their credit score. The servicer could also sue them and get a judgment against them. Of course, this judgment may be uncollectable if they don’t have any assets. Of course, you have the ability to see whether the people you’re lending to have assets before you lend.

By: Jules

Jules — Tue, 07 Jul 2009 09:18:35 +0000

Hi Todd,
Wonderful article. How much do you suggest a person should initially invest in this venture? And what are the penalties charges for those who default on the loan amount?

By: Todd Metheny

Todd Metheny — Tue, 07 Jul 2009 04:49:02 +0000

She really is the best. There’s not a single thing I would change about her. I hope I always feel that way. That’s maybe a little mushy for something to write on the blog, but she’s really made my life great. I feel really lucky. She more than makes up for all the things in my life that haven’t worked out as well. Her being frugal is just icing on the cake.

By: Chessiq

Chessiq — Tue, 07 Jul 2009 01:54:44 +0000

Hi Todd! Thanks for offering to do further research… No rush. I was going to put it off until TX is approved. (Or is it TX approves Lending Club?) – whatever.
Lucky that you have a wife who is great about saving and frugality… one less thing to worry about! One more thing to love to love about her. The sentimental side of me is coming out!

By: Todd Metheny

Todd Metheny — Mon, 06 Jul 2009 23:21:59 +0000

I like getting to pick who you lend to as well. My wife was actually pretty excited when she read the post, too. She’s almost never excited about investing, so I thought that was pretty cool. She’s great about frugality and saving, but I think I’m more interested in investing and various investment opps – but she actually thought lending club was really cool. Hopefully TX gets approved. I would think there would be some other comparable peer to peer lending company that operates down there, but I don’t know. I will try to find out.

By: Chessiq

Chessiq — Mon, 06 Jul 2009 04:43:07 +0000

Seems like Texans have to wait for a little bit until Lending Club’s application is approved. (TX is not on the list of States in the drop down where you enter your address…).
Sounds like a good idea if you have some money to invest that you cannot worry about too much. In addition, I like the fact that you almost have total control of who you lend to. Almost.
Thanks for sharing.