LendingClub
LendingClub is a peer-to-peer lending platform that allows investors to lend money to individual borrowers. It provides an alternative to traditional lending by connecting borrowers directly with investors online.
LendingClub: Peer-to-Peer Lending Platform
Discover the alternative to traditional lending with a platform that connects individual borrowers with investors online, providing a peer-to-peer lending experience.
What is LendingClub?
LendingClub is an online peer-to-peer lending marketplace that allows individual investors to lend money directly to individual and small business borrowers. It aims to provide an alternative source of credit by connecting borrowers and lenders directly, bypassing traditional banks.
Here are some key things to know about LendingClub:
- Borrowers can apply for personal loans up to $40,000. The interest rates they pay tends to be lower than typical credit card rates but higher than traditional bank lending rates.
- Individual and institutional investors provide the loan funds. Investors earn monthly interest income from the loans they fund.
- LendingClub approves less than 25% of borrower applicants based on credit criteria and other factors. This aims to provide investors with higher quality loan investments.
- Investors choose specific loans to invest in based on profiles provided. This allows them to build a customized portfolio.
- LendingClub handles all loan servicing and collections. Investors simply receive monthly payments based on their investments.
Overall, LendingClub aims to provide a lending alternative by directly connecting investors and creditworthy borrowers in an online marketplace. It has facilitated over $15 billion in loans since it began operating.
LendingClub Features
Features
- Peer-to-peer lending
- Automated loan approvals
- Credit risk modeling
- Loan servicing
- Investor tools
Pricing
- Subscription-Based
Pros
Access to new asset class
Potentially higher returns than savings accounts
Automated investing
Fractional loans allow diversification
Cons
No guarantee of returns
Higher risk than savings accounts
Illiquidity of loans
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