Lending Club is the largest P2P lending platform

Country: United Statesrbkw7v4i_400x400

Year: 2006

Lending Club was founded in 2006 to provide SMEs and individuals with loans from individual sand institutional investors. Lending Club recorded the largest technology IPO (1 Billion USD) in the United States in 2014, making it the largest P2P lending platform.

Concept

  • Lending Club is an online credit market place which offers personnel and business loans and financing for elective medical procedures
  • It enables borrowers to obtain loans at a low interest rates. Investors provide the capital in exchange of earning interest
  • Lending Club  operates online  which enables them to provide a great customer experience though an efficient online marketplace

Consumer Benefits

Borrowers:

  • Easy online application
  • No pre-payment penalties and hidden fees
  • Low fixed rates ranging from 5.99% to 35.89% and depending on the credit score and credit history of the borrower
  • Investors:
    • Opportunity to create diversified portfolios that aren’t directly tied to the bond markets
    • Solid returns through monthly cashflow

How To Use

Borrowers:

  1. Interested borrowers complete a simple online application
  2. Lending Club leverages on online data and technology to quickly assess risk to determine a credit rating and assign the appropriate interest rate
  3. Applicants then receive the offer and can evaluate their loan options
  4. Funds are transferred in the borrower’s bank account
  5. The borrower can repay its loan though automated fixed monthly payments

Investors: 

  1. Investors open an account and transfer funds. They can invest in a range of loans with as little as $25
  2. They receive monthly payments of principal and interest and can reinvest or withdraw these payments

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