Lending club is a well known community that deals with financial activities like bringing investors and borrowers together at one platform so that they may earn benefits mutually and financially. Smarter and faster methods of investment and borrowing are offered at Lending club which doesn’t bother you regarding high cost or bank lending complexity.
If you go to get a loan from Bank than stay ready to bear a lot of fee and documentation that is time consuming as well as costly. Therefore to avoid this botheration, you can go for the option of Peer to Peer Lending. Lower rates of interest makes this option quite attractive business activity.
Peer lending is that financial option that is turning lots of borrowers towards it along with many investors who want to keep some decent rates of returns. This methodology is not newer; however its interest rates have played a vital role in increased usage of Peer Lending.
Chief Executive of Lending Club Mr. Renaud Laplance observed larger investors taking interest to invest via Lending club into small enterprises that lets them much cash to get loans. In 2010, there was a huge increase in average investment that started from $1,800 in month of March and ended up at $8,700 by the end of December. Recently loans crossed $200 Millions that was a double amount than it was just 8 to 9 months before. Now, Lending Club has owed average investments of around $15,000 per year.
Chief Executive of Lending Club Mr. Renaud Laplance says:
“The No. 1 reason why borrowers choose Lending Club as opposed to a bank is lower interest rates. We are a peer-to-peer lending network and therefore create a more efficient way of getting funding to borrowers, whether small businesses or individuals”
How It Works
Applicants fill out an online application and are told immediately whether they passed the initial screening. If they pass, they are given loan options and their confidential request is posted to the website for two weeks or until the loan is fully funded.
Online applications are filled by the applicants and then they are intimated instantly if they are eligible after passing the initial screening tests. If they are through than they are provided with the options of loans. The whole process is very simple as Lending Club doesn’t underwrite the business going on instead it goes for the option of underwriting the owner of business. Loans are provided based on his credit history or financial situation. This kind of loans is automated just like they way one gets personal loan or credit card from some bank.
Origination fees are between 2 percent and 5 percent of the loan amount. Lending club costs about 2 to 5% origination fee of the loan. About 11% interest rates for 3 years loans, 14% for 5 years loan are charged at Lending Club, which is about 16 to 24% at banks.
Lending Club Statistics:
- Loans funded to date: $244,921,475
- Loans funded last month: $14,601,275
- Interest paid to investors since inception: $19,616,829
To explore more you can visit Lending Club