Personal Loan Portfolio

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After doing a little tire kicking, I decided to sign up with Lending Club first. I have entered all the prerequisite data including the bank account number. The initial sign up was quick and required basics such as social security number to reduce fraud and because they will send a 1099 at the end of the year on interest earned. After a basic automated identity authentication, I entered my bank account information.

Lending Club withdraws a very small amount (under a dollar) from your account to validate the account information. To finalize registration, I must enter the amount withdrawn to validate that it is indeed my account. This process reminds me of the Paypal sign up process except Paypal deposits two very small amounts into your account rather than making a small withdrawal. Unfortunately, the process takes two to three days and it has only been 24 hours so it will be a few more days before I extend my first loans. I am growing impatient already.

So why did I pick Lending Club over Prosper for my first account? Several reasons:

• Lending Club allows loans as small as $25 which allows an initial small overall investment to be more diversified than Prosper.
• I liked how Lending Club clearly enumerated the risks.
• I like that Lending Circle lends to a group of people with a higher credit score than Prosper. Lending Club stops at a FICO score of 640 while Prosper allows down to a 559.
• The credit grades at Lending Club are smaller ranges, so a “B” at Lending Club is higher than a “B” at Prosper. The tighter ranges provide a more meaningful ranking.

I will likely also start a Prosper account just to better be able to compare, but I had to select somewhere to start and Lending Club was my choice.