Lending Club States


There is no avoiding the issue there are Lending Club states and non-Lending Club states out there. What we mean by this is despite the fact that Lending Club is a totally legit business there are just some states that will not allow them to operate on a few different levels. Some states even take a very unique approach to lending, borrowing and trading with Lending Club so it is important to understand exactly what makes this all so.

Even if you are allowed to trade with Lending Club in your state you still can’t help but feel a bit bad for the guys over at Lending Club. They really have done nothing wrong and it is going to be virtually impossible for them to get themselves into every state without some of those states changing their laws first. This is because the whole concept of peer to peer trading is very new and the interpretation of investment laws can vary greatly from state to state. Most of these laws and the way that they were interpreted as well were written long before the idea of peer to peer lending ever came into place.

All is not lost though for those people that don’t live in Lending Club states. Many of those states and their residents are still fully eligible for trading on the secondary market. This means even though direct trading, lending and borrowing might not be allowed, investors can still take on investments that are pre-existing and that another investor wants to get rid of. This is obviously not the first choice and it is very rare that you see someone from a Lending Club state doing this, it is a great work around for those that are not as fortunate as some of us to be able to enjoy the freedom of peer to peer trading without any of the hassles.

The secondary market all takes place on the FolioFN network where loans that people are no longer interested in financing will go to get rid of them. You need to be smart about which one you choose and really understand why a person would want to get rid of a loan in the first place but this can really be a great place for all of you that otherwise couldn’t participate, to get in on the action.

Really, if you think about it, it is really kind of sad that they can’t make it easier for people in these states to invest their own hard earned money in whichever method they choose. As the laws and regulations currently stand, there is probably no way that a peer to peer lending company could ever position themselves so that they could serve residents of every state in the company. It is a sad reality for those with money that are looking to invest but just like everything else in the world, there is always a way to get things done if you really want to, even if you don’t live in one of the Lending Club states.


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