How does
an online credit
marketplace
work?
Lending Club uses technology to operate a credit marketplace at a lower cost than traditional bank loan programs, passing the savings on to borrowers in the form of lower rates and to investors in the form of solid returns. Borrowers who used a personal loan via Lending Club to consolidate debt or pay off high interest credit cards report in a survey that the interest rate on their loan was an average of 6.8 percentage points lower than they were paying on their outstanding debt or credit cards.1
By providing borrowers with better rates, and investors with attractive, risk-adjusted returns, Lending Club has earned among the highest satisfaction ratings in the financial services industry.2
Lending Club is the world’s largest marketplace connecting borrowers and investors, where consumers and small business owners lower the cost of their credit and enjoy a better experience than traditional bank lending, and investors earn attractive risk-adjusted returns. 4
Here's how it works:
The entire process is online, using technology to lower the cost of credit and pass the savings back in the form of lower rates for borrowers and solid returns for investors.
We cut the cost and complexities of traditional bank loans and pass the savings on to borrowers.
At Lending Club you can earn attractive risk-adjusted returns by quickly and easily investing in a diversified portfolio of loans.
Lending Club strongly protects your personal and financial information. Investors and borrowers never know each other's identities; we will never sell, rent or otherwise distribute your information; and we only share what's necessary to complete your requested transactions. See our Privacy Policy for full details.
We’re proud to share information about our company and our services. Our website contains background information about Lending Club, and our statistics area gives a wealth of information on loan and investor performance. We also offer a downloadable file containing the credit and performance details on all loans eligible for funding by public investors.
1 All loans made by WebBank, a Utah-chartered Industrial Bank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. Source for savings % and satisfaction scores: Lending Club borrower surveys, 2013-2014.
2 Based on responses from 21,051 borrowers who received a loan to consolidate existing debt or pay off their credit card balance in a survey of 103,439 randomly selected borrowers conducted by us during the nine months ended September 30, 2014.
3 This depiction is a summary of the processes for obtaining a loan or making an investment. Loans are issued by WebBank, an FDIC insured Utah-chartered industrial bank located in Salt Lake City, Utah, Equal Housing Lender. Investors do not invest directly in loans. Investors purchase Member Dependent Notes from Lending Club. Loans are not issued to borrowers in IA, ID, ME, ND, or NE. Individual borrowers must be a US citizen or permanent resident and at least 18 years old. Valid bank account and social security number/FEIN are required. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. LendingClub notes are issued pursuant to a prospectus on file with the SEC. You should review the risks and uncertainties described in the prospectus related to your possible investment in the notes. Currently only residents of the following states may invest in Lending Club notes: CA, CO, CT, DE, FL, GA, HI, ID, IL, KY, LA, MA, ME, MN, MS, MT, NH, NV, NY, RI, SD, UT, VA, VT, WA, WI, WV, or WY. Our mailing address is: Lending Club, 71 Stevenson Street, Suite 300, San Francisco, CA 94105.
4 http://www.economist.com/blogs/schumpeter/2013/01/lending-club
5 As of December 31, 2014. To be included in the historical returns ("Historical Returns") calculation, a Note must have been originated prior to June 30, 2013. Historical Returns are Lending Club's adjusted net annualized returns (Adjusted NAR) for Notes with Grades A through C. Adjusted NAR is calculated using the formula described here. Adjusted NAR is based on monthly borrower payments actually received net of Lending Club's service fees, actual charge offs, recoveries, and adjustment for estimated future losses. To estimate future losses, we apply a loss rate estimate to the outstanding principal of any loans that are past-due but not charged off. The loss rate estimate is based on historical charge off rates by loan status over a 9-month period. Historical Returns are not a promise of future results. Lending Club Notes are not insured or guaranteed and investors may have negative returns. Individual portfolio results may be impacted by, among other things, the diversity of the portfolio, exposure to any single Note or group of Notes, as well as macroeconomic conditions. Notes are offered byprospectus filed with the SEC and you should review the risks and uncertainties described in the prospectus prior to investing in the Notes.
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Companies like Lending Club are cutting out the middle man − banks − to offer consumers the opportunity to lend money directly to others and obtain a higher return.
"The interest rate on my loan through Lending Club is a third less than what I was paying before, and it’s very satisfying to know that there is an end date for being done with my debt."