P2P Lending: The Key to Happiness?

Posted by Mike Smith :: April 4, 2008 @ 4:33 am

We often consider how the money we take in adds to our level of happiness. Looking at how we spend our money is also important in the happiness it brings to us. A new study finds that giving money away or spending it on others brings personal joy.

The study, released in the March 21st issue of the journal Science, was highlighted in this article. The main conclusion of the study is that people who use their money on gifts for friends or charitable donations get a boost of happiness not found in those who spend money on themselves.

The results of this study beg the question of the benefits of lending money to others through peer-to-peer loans. In addition to the personal benefit of above average interest rates, lenders get to choose which loan applications to fund. By using affiliations at Lending Club, for example, you can find people who need money who are also connected to you in a personal way. Whether your common link with a borrower is being alumni from the same university, living in the same area, or having a similar interest, Lending Club truly allows friends to help friends. Even lending to people with no affiliation to you can feel good. There is a satisfaction from helping others get the money they need for less than any bank would be able to offer.

While the greatest boost in happiness would likely come from true gifts or charitable giving, where you have no direct benefit, P2P lending can nonetheless still bring happiness. Knowing that you do get something in return, namely interest on your loan, may make the happiness grow even more.