Posted by Mike Smith :: July 3, 2007 @ 8:48 am

Let’s face it; there are times when everyone needs some extra money. If you’re like a lot of people, you need to get out from under the burden of debt.

With so many different financing options, it can be difficult to choose the best way to get that extra money. It may seem easier to just “swipe the card,” but that’s a decision that you’ll regret for years to come. A personal loan from Lending Club is a superior alternative.

Reduced Interest Rate

Perhaps the most obvious advantage of using Lending Club is that you can almost certainly secure a lower interest rate than you would be paying with your credit card. It will depend on your credit score, but consider this: The average credit card charges interest in the mid to high teens, whereas Lending Club loans start at 7.45%.

Fixed Payments/Fixed Term

Loans from Lending Club have a fixed interest rate and a fixed term. You’ll know exactly how much you owe each month and that your loan will be paid off in 36 months. Credit card companies set the minimum payment as a percentage of your balance, your monthly payment amount will change from month to month.

It’s also not uncommon for them to change your terms. In other words, your minimum payment or interest rate could be jacked up at almost any time. By only making minimum payments to your credit card it may take many, many years (20+ years in some cases) to pay off your balance.

Lending Club Loans are Unsecured Loans

Lending Club loans are “unsecured,” which means that you do not need to offer collateral to be approved for a loan. You can rest assured that your house, car, or similar asset, is not at risk by being tied directly to your loan. Your good credit score is essentially your collateral for this type of loan. Your only obligation is to pay back the money according to your loan terms.

Why Lending Club?

By directly connecting lenders to borrowers, Lending Club’s person-to-person lending model effectively cuts out the middle man (i.e. the bank) so that borrowers can get better rates. This new paradigm of social lending builds camaraderie, as friends help friends to easily get the money they need at a much more reasonable rate.

With the integration of its proprietary LendingMatch™ technology to “help match lenders with borrowers using connections established through social networks, associations and online communities,” it truly is able to achieve its motto: “Better Rates. Together.”