What Does Dave Ramsey Think About Lending Club and Prosper?
What does Dave Ramsey think about the p2p Lending Club or Prosper? Is it a scam? The risk involved is basically the default rate of the loans you make and also what would happen is the company declared bankruptcy. The loans are only $25 or $50 per borrower so if you are diversified enough (200+ loans) then you will probably tend to see the average ROI.
Lending Club is by far the most popular but Prosper 2.0 has recovered and potentially could give you the better returns. Prosper had a lot of trouble with default rates in 2008 or so but they re did their lending criteria. Is it legit? How does lending club work? What is minimum investment? is it a ponzi scheme? What states allow this type of investing? Your money can earn interest of around 9-10% for the term of the loan. Dave Ramsey would not approve as he hates risk and invests in mutual funds and buys real estate. "Lending Club" is not a bank that loans money.
Lending Club and Prosper loan money to individuals looking to refinance or consolidate credit cards at a lower interest rate.