How does it work?

All applicants to the Lending Club must provide a one year credit history with no current delinquencies, and cannot have filed for bankruptcy in the last seven years.  If you meet those requirements -- and others -- the step-by-step process will guide you through the application.

You may be able to borrow between $1,000 and $25,000 that you are scheduled to pay back in three years.  If you are the investor, Lending Club touts an average annual return of just over 9%, and the site allows you to spread your invesment among several qualified buyers.

The rates are set by Lending Club, and you are given the option of either re-investing the interest and principal each month, or withdrawing them like annuity.

If you are worried about safety, the Lender's Club's website claims on average only one in six applications for loans are accepted.  With no physical facilities, staff or ATMs to support, service charges are limited to a single per-transaction processing fee.

The Lender's Club relies on in-house an collections team for borrowers who do not re-pay their loans.  If that does not work, outside collections agents are brought in.