The platform I will be reviewing today is LendingLoop, it is a platform that allows one to partake in crowd lending (or peer to peer lending) Crowd lending lending is a service where you (and many other lenders) lend small amounts of money to businesses and over the loan period you will receive all your capital back plus some generous interest (providing companies do not default, which happens in the rarest of cases). You keep most of the interest, Lending loop takes only 1.5% which is pretty fair. You can begin with as little as $25! The website is very straightforward, but most of the content and pages are locked until you have an account. Account set up is very simple and straightforward, my account was set up and funded within four days of opening the account. The businesses you are able to loan to are all stable and legitimate, as lendingloop sifts through them and only approves some. LendingLoop does have a small account opening bonus as well. As a service and platform, I give it 5/5.
The open account bonus is $25 once you have loaned a total of $1500*. There is no time limit to this. $25 isn’t a lot, but again, it is infinitely better than nothing. It will eventually be a nice surprise to receive. You can visit the website here.
and use the code B577CD when signing up to get the bonus.
*(this does not mean you have to put that much in, it means that over time, once you’ve invested that much in total, so for example put $100 in, get $110 back from it, and then put that into something else counts as $210 total, even though you just put in the $100 to start)
So here are my ratings.
Safety : 4/5
Liquidity : 2/5
Returns : 5/5
Not bad overall, actually really good overall except liquidity, and that might freak some of you out. You have to start thinking long term with investments, and the reality is in the end it’s not that bad. Here’s my reasoning:
You may think that this sounds pretty sketchy, and yeah it kinda is. However you can choose who you lend to (read about their business, loan purpose, Q&A, and financials) and make the choice for yourselves. Also only a small percentage (2-3 I think?) of businesses actually get approved by the LL team. You can diversify very well, and there are many policies for lending loop to try and get as much of your capital back to you if the company goes bankrupt. Due to the slow monthly payments, you will have made some of your money back already if anyone defaults (I’ll get into that in liquidity). Also I don’t believe any business has defaulted on their loans so far. Around 6-8% of B-C rated businesses default on their loans, of ALL companies, and lending loop only takes the best). So all things considered it is very low risk for an investment.
Yeah this is the biggest issue with this, but it’s not actually that bad once you think about it. It is pretty quick transfers from the bank to the service and from the service to the bank. I have tested it out both ways and works great, so that’s not a problem. The low liquidity part is that once you invest, you have to wait for the loan to reach maturity to get all your capital back, it’s not like a stock you can’t just cash out and sell when you need to, so this is for money that is extra, that you won’t need to touch for a couple years (terms range from 1.5 years to 4 years from what I have seen so far). Just the spare change instead of buying a couple drinks or that shirt put $50 in here (you can deposit any amount I believe, and withdraw anything above $50. However there are redeeming qualities about this. It is not like a GIC – you get ALL the money back at the end (interest and capital) of the term. Each month payments are made, returning some of your capital and some interest. So far I have recieved $36 back, $10 of that being interest. So the cash does build up and you can reinvest that pretty quickly.
You will be hard pressed to find better guaranteed** returns than this, anywhere. I dare you to try. (**Guaranteed meaning the rate of return. It does not guarantee the business will not go bankrupt, as with any investment there is some risk). I mean that if the loan is 15%, you WILL MAKE 15% on that (minus the 1.5%). A stock can generate these kinds of returns, but is never guaranteed like that. GICs and HISAs are guaranteed, but make nowhere near these returns. Typical savings accounts are around 0.15-0.8% per year, so you can make anywhere from 20x to 100x the returns. Typical GICs are around 2%-3% for a several year term, so you can make 5x-7x the returns.
I think this is a very well done and trustworthy service. I am making much higher returns than any of my savings accounts. I would highly recommend this if you have a spare paycheck or some extra money lying around you aren’t going to use for a while. You should all seriously consider, you can start with just $25. As a passive income tool, crowd lending with LendingLoop receives a 11/15.
LendingLoop for usability earns 5.5.
If you are nervous, there are others who have written some very in depth reviews of crowd lending. The passive income challenge blog has a lot of great posts and information, and has experience with crowd lending as well.
For those of you who want to take control of your financial future, I urge you to look further into crowd lending as a source of additional income.