A borrower's look at using Lending Club to consolidate debt

credit cardsPeer-to-Peer lending is everywhere these days. You can start a business, get student loans and consolidate high interest debt. Still, borrowing money from your peers is a new experience for most of us, and for many people new things are daunting -- which makes this borrower's look at peer-to peer-lending by Matt Jabs at Debt Free Adventure all incredibly useful.

After the interest on three of his credit cards jumped, "due to bad economy", he looked into LendingClub.com to consolidate his high-interest debt into a lower fixed-term loan. But he didn't just consider the interest rates and say to himself, hmm, I'll chase that lower rate and who cares about the fees! Instead he compared the total cost and by doing so saved himself over $500. His story covers the details of his process, including his interest rate savings, 10% on one card. You'll also find links to help you figure out if you can save by consolidating to a lower rate loan the same way he did.

For me one of the biggest benefits to switching to a Lending Club peer-to peer-loan which was not covered in Jabs' article is that it is a fixed-length loan. While credit card debt can drag out year after year, a Lending Club loan gives you a specific payoff date. Having an end in sight can be a huge motivator to tackling your debt. I also like that you can't add to this debt over time and that there is no prepayment penalty.

While I have not personally used Lending Club or a peer-to-peer lender, this type of information,is leading me to look at a peer-to-peer solution to consolidate my current credit card debt when my promotional 0% rate expires.

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Do yourself a "HUGE FAVOR" and carefully read this:

The 21st Century Act: Final Amendments to Regulation CC Section:
"Prohibits" reimbursement of Credit, Loan, and Finance Balances to a "Bank Entity" leaving only "Nonbank Consumers" able to receive reimbursement, as specified on Pages 85 and 86.

The 21st Century Act states on pg. 85 and 86 that "Only Nonbank Consumers can suffer losses and File for
Re-credit or Re-claim on any Accounts under the Federal Reserve System" also “Any Second or Third Party Presenters utilizing a Banks Documentation, Contracts and/or Agreements to seek Claims shall be considered to be that Bank under the Rules and Regulations”, the Expanded Definitions also includes Credit Cards and Home Equity Lines of Credit.
Also on Pages 100 and 101 "In any Financial Claims the Indemifying Bank (Parent Bank) must be Identified".

(Left-Click to Search Link)
21st Century Act: Final Amendments to Regulation CC http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

This Federal Law signed January 1, 2006 makes it "Fraudulent" and therefore "Illegal" for the 3 Major Personal Credit Reporting Agencies: Equifax, Experian, and TrasUnion to allow the Banks and the Banks "Third Party Presenters" to place any claim of "Negative" or "Potentially Negative" Accounts on your Personal Credit Based upon the fact that they have no "Legal Grounds or Claim" to the Money.

This is an "Unfair Practice" that diminishes our Financial ability to support ourselves and adversely affects our ability to gain work in many areas which breaks "Antitrust Laws".

These Rules also back claims of: "Aiding and Abetting" Racketeering and Extortion (of Finance Accounts and Personal Credit Reports), Pandering (of Credit and Loan Accounts, and Conspiracy to wit), Theft, Fraud, Federal Mail Fraud, and Telephone Harassment. Also "Threatening of the U.S. Financial Infrastructure", which is a "Capital Crime".

In order to engage the Federal Trade Commission to act against this injustice we must File many Claims, as these Reports must be Filed by a large number of people in order for the Federal Trade Commission to pursue
"Legal Action".

(Left -Click to engage Email Address)


This is way easier than "Occupying Wall Street"!

March 11 2012 at 6:33 PM Report abuse rate up rate down Reply