Lendingclub

Bankrate.com: Peer-to-peer online lending grows in tight economy

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A recent Bankrate.com article gives an update on the development of p2p lending in the US.

Chris Larsen of Prosper.com sees the current financial situation as a chance for p2p lenders:

Home equity used to be the cash management tool for the credit-worthy borrower, and that has really, really dried up. In many ways, Prosper's three-year, 25,000 US$ loan is a pretty good proxy for what people were using home equity for — improving their home, starting a sole proprietorship, college costs and certainly for replacing credit card debt.

Javelin Strategy & Research is quoted that credit card debt is the main reason people want to use p2p lending:

We're forecasting that P2P lending specifically for credit card balances will grow from 38 billion US$ in 2007 to 159 billion US$ by 2012

The final advice of the article is:

Prospective borrowers and lenders would do well to thoroughly research P2P companies before jumping at the chance for a lower rate on a loan or a higher return on an investment. …

Lendingclub quiet period – lenders can not sign up or bid on new loans

wiseclerk

Surprisingly Lendingclub.com stopped signup for new lenders and existing lenders can not make bids on new loans (old loans are continued to be serviced). Borrowers can still obtain new loans – they are funded directly by Lendingclub. The announcement email sent out to members is quoted in this blog post.

The Lendingclub website states this message:

Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.

The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.

Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.

On Techcrunch there is speculation that "Lending Club is looking to obtain a broker dealer license from the SEC that would legitimize its operations".

If this is the case I could not find a recent SEC filing connected to this. The last one I found dates February 13th.

Netbanker has a short statement from Prosper, essentially saying that Prosper believes itself to be in compliance with all state and federal laws.

Lending Club hits 10 million US$ loan volume

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P2P Lending service Lendingclub.com, which launched last May, today surpasses 10 million US$ in loans. While the total amount is still much lower then the loan volume of competitor Prosper.com (currently over 120 million US$ loan volume) the growth acceleration of Lendingclub is really impressive.

Rob Garcia, Director Web production at Lending Club, told P2P-Banking.com:

This milestone confirms the validity of our approach to person-to-person lending, but more importantly, our value proposition to our borrowers and lenders.  Borrowers are realizing 20-30% better rates than going through the banks, while our lenders enjoy 12% average returns.  We are working to take this concept to a larger audience, so $10M is just a mile marker in our marathon.

The growth can be seen in this chart. For Prosper loan volume compare chart on this page. So basically in February Lending Club has originiated close to the amount Prosper did, when taking into account only those loans that would fit the minimum criteria of Lending Club's 640 FICO score and <30% DTI.

The statistic information at Lendingclub.com shows that over 1200 loans have been issued. So far few loans are late, but since most of the loans are very young, it is to early to tell which level of defaults will have to be expected. The statistic page also shows that Lendingclub declined over 80 million US$ in loan applications.

If you sign up via this link, you get a 25 US$ bonus by Lending Club (and I am paid a referral fee).

Half percent more interest at Lendingclub

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Today for all new loans the interest rates at Lendingclub.com increase by 0.5 percent. At Lendingclub, unlike other p2p lending sites, the platform not the borrower sets the interest rate (based on credit grade). The increase was in reaction to rising borrower demand after Lendingclub eliminated state loan rate caps last week by going nationwide.

As a lender you can profit furthermore from two current promotions at Lendingclub. You get a 5% cash bonus if you lend 5,000 US$ or more by Feb. 3, 2008 (max. 20,000 per lender). Plus you get a 25 US$ signup bonus, if you sign up through this referral link.

Questions? Suggestions? Use the Lendingclub forum.