Personal Loans | How To Enact a Powerful Lending Club Now

Typically, to set a lending club you need a group of people to agree on terms and conditions of pooling financial resources to help each other. You can pool resources to support each of your respective business ventures. In this case, the club would act like your zero-interest bank. Perhaps, the club could also act as a zero-interest for personal loans. It sounds each, but in practice, it could be very daunting.

That’s because if done wrong it could destroy lives, shred relationships, or even lead to legal and criminal issues. Therefore, launching a lending club is not easy. Indeed, it is a very delicate and risky venture.

Yet, if you are determined to launch a lending club here are the steps to follow:


How To

Step by Step Process

  1. Define an objective

    Why do you want to launch a lending circle? What do you want to achieve?
    Be specific and smart about your goal. Evidently, if you are unable to be clear about your intentions. Chances are, you will set yourself for failure.

  2. Profiling

    Because a lending club relies exclusively on the goodwill of the members. Consequently, it is important to define a clear profile of the type of people you would want to be part of the community. Remember it is not enough to have a good job, money in a bank account, or any asset. It is all about the ability of a member to respect their commitments. This is probably, the most important set, so take your time. A tool such as an empathy map would be useful.

  3. Recruitment

    At this stage, you want to recruit a small group of a maximum of 3 potential members to run the project by them and see what they think. Do a thorough due diligence before approaching your targets. From their input, you can improve your plan. Once all adjustments made, go back to the group and offer them to join the club.

  4. Constitution

    A constitution is a body of fundamental principles or established precedents according to which a state or other organization is acknowledged to be governed. It is essential to make sure all members understand, agree, and take part in the process of establishing the constitution that would govern all activities. Nevertheless, do not hesitate to request any help from any third party such as a lawyer. Should it deem necessary. A well-written constitution will protect all members should something goes wrong. However, unlike a country’s constitution, a lending club constitution has an expiration date. Typically when the pool has rotated among all members. The last member to receive his or her pool money terminates the activities. Then a pause is required to evaluate, improve the constitution before relaunching.

  5. Rotation rules

    You will decide together, how much money each member needs to contribute at a specific date. For instance every week, month, quarter. Then decide together who’s going to be the first beneficiary, the second, third, the fourth, and so on depending on the total members.
    Usually, a beneficiary has to welcome members at his or her place. It is part of the trust process. Hosting rotation meeting strengthen ties among members.

  6. Designate a keeper

    Normally, a keeper is a person whose role is to make sure everybody’s on track with its commitments toward the organization. Usually, the person would call at least 72 hours prior to the rotation set date to ensure everybody’s contribution is available. If not work with members to avoid any disruption. The keeper also enforces the constitution. The keeper should be a third party with some prior experience or legal background. The keeper’s mandate is determined and approved by all members.



A successful lending club can provide great relief to its members. Actually, it is the most prestigious addition to one’s financial tool kit. That is because a lending club provides the following benefits:

  1. For personal loans

Indeed,as a member of a lending club you have a privilege for personal loans.

2. For interest free money


The money is received without any interest compared to a bank loan or a credit card. This is valuable specially for people with bad credit score or no credit score. It acts as a catalyst to their financial endeavors.

3. Emergency fund


However, some complex lending clubs typically generational lending clubs. have established retainer fees. The retainer fees represent a small percentage of the pool money during each circle. The money served as an emergency fund or available cash flow for future opportunities.

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