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Lending Club is an online lending community where people can borrow and lend money, bypass the banks, and get better rates. By working together, members can borrow money more easily and at a better rate than they would get from a bank, or invest in a portfolio of loans at higher rates than those served by savings accou...
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Lending Club is an online lending community where people can borrow and lend money, bypass the banks, and get better rates. By working together, members can borrow money more easily and at a better rate than they would get from a bank, or invest in a portfolio of loans at higher rates than those served by savings accounts or CDs. A proprietary technology called LendingMatch helps match lenders with borrowers using connections established through social networks, associations and online communities, and build diversified portfolios based on lender preferences. Borrowers complete a loan request and instantly view the interest rate at which they pre-qualify (it's free to check, but we have very high credit standards so we do apologize if you don't qualify). There are no hidden fees, and the interest rate is fixed for three years.
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Address:
440 North Wolfe Road Sunnyvale, California 94085 United States
Category:
Sector: Financial
Industry: Lending
Sub - Industry: Consumer
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We're coining a term to describe what we do. It's called social finance. It means we want to improve the tools of financial services--investments, and loans, and so forth--by allowing people to use them to help themselves, and other people, at the sa More >>
Lending Club puts a new spin to peer-to-peer lending by building communities of lenders. Whereas lending networks such as Prosper and Zopa aimed to connect any borrower with any lender as long as the credit requirements are met, Lending Club tries to find more in common between borrowers and lenders. Using a proprietary algorithm called LendingMatch, Lending Club connects borrowers and lenders based on characteristics such as geographical locat...
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Lending Club puts a new spin to peer-to-peer lending by building communities of lenders. Whereas lending networks such as Prosper and Zopa aimed to connect any borrower with any lender as long as the credit requirements are met, Lending Club tries to find more in common between borrowers and lenders. Using a proprietary algorithm called LendingMatch, Lending Club connects borrowers and lenders based on characteristics such as geographical location and professional background.<br />
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This new take on social lending seems a bit quirky. Lending Club appears to have taken a procedure that has worked with online dating websites and implemented it in a P2P lending platform, but there is value to users' knowing more their borrowers and lenders. The philosophy is to form communities of lenders and borrowers, building trust between the two parties – the pressure not to default on a loan, for example, is greater if you know the lender.<br />
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Unfortunately, Lending Club encountered the same impediments regarding lender security as had other P2P lending sites and had to cease registering lenders and issuing promissory notes for a few months in 2008. In late 2008 they were given the green light to reestablish lending communities and have branched out of California, where they are headquartered, into the rest of the United States.<br />
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I am skeptical about community-based social lending. When I think of borrowers and lenders I think of two distinct parties. Whereas community-based lending depends on the reciprocity of loans I don\'t think borrowers will be lenders, and vice versa. I don\'t think the communities have formed enough trust, either – the number of declined loans is almost 9 times the number of issued loans. Lastly, the revenue model appears a bit stifling, as the numerous transactions fees and contingent fees might scare borrowers out of borrowing. <br />
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Lending Club has devised a new form of social lending but I just don\'t think there is enough demand to form well-functioning communities. I am also doubtful that borrowers and lenders can build trust just because they share a common location or background. We will have to see if Lending Club can make community-based social lending work.
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9,810 Investors 
