Launch year: 2007
Country: United States of America
Funds raised: $1,000,000,000

LendingClub

Concept description

LendingClub Overview:

  • LendingClub is an American peer-to-peer lending company, headquartered in San Francisco, California.
  • It is the world leader in p2p lending. The firm registers its offerings as securities with the Securities and Exchange Commission (SEC). Their purpose is to offer loan trading on a secondary market.
  • The company has raised a total of $867 Million in what became the largest technology IPO of 2014 in the United States. LendingClub is therefore viewed as a pioneer in the fintech industry and one of the largest firms.
  • The company claims that $59 billion in loans had been originated through its platform up to March 31, 2020.

Value proposition

  • LendingClub uses technology to operate its online credit marketplace at a lower cost than traditional lending programs. They pass the savings on to borrowers in the form of lower rates. Above all, they offer investors the potential for competitive returns.
  • In fact, LendingClub enables borrowers to create unsecured personal loans between $1,000 and $40,000 by supplying details about themselves and the loans that they would like to request.
  • On the basis of the borrower’s credit score, credit history, desired loan amount and the borrower’s debt-to-income ratio, LendingClub determines whether the borrower is creditworthy. Then, the company assigns to its approved loans a credit grade that determines the payable interest rate and fees. The standard loan period is three years. A five-year period is also available at a higher interest rate and additional fees. The borrower can repay the loan at any time without penalty.
  • Investors can search and browse the loan listings on LendingClub website. They would then select loans that they want to invest in, based on the information supplied about the borrower, amount of loan, loan grade, and loan purpose. Investors make money from interest.
  • LendingClub makes money by charging borrowers an origination fee whereas investors pay a service fee.

Illustration (Video)

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