Zopa plans to launch a student loan feature in July. Students can already use peer-to-peer lending sites to apply for a personal loan. At Prosper.com, education loans account for less then 2% of its 135 million US$ in loans. (Sources: Smartmoney, WSJ)
Prosper
Prosper Days 2008 videos available
Prosper.com made the videos of the Prosper Days 2008 available. Thanks Prosper!
I will just feature one session here. In "Managing large portfolios" Adam Weyeneth, President of Fair Deal Credit talks about the issues for institutional lenders that want to invest into the asset class of p2p loans.
Link to this video and the related videos of the other sessions.
Big news – Prosper goes national with 36 percent max interest rate
Announced today Prosper.com has achieved nationwide lending (exceptions South Dakota and Texas) with an interest rate maximum of 36 percent. Previously maximum interest rates varied on a state by state basis depending by the licenses Prosper had acquired.
Prosper chose the same construct to go national as did Lendingclub in December – both partnered with WebBank, Utah.
All loans originated through the Prosper marketplace are made by WebBank, a Utah-chartered Industrial Bank. Prosper provides services to WebBank in connection with the origination of such loans and Prosper services loans made to Prosper borrowers on behalf of registered Prosper lenders who purchase such loans.
This step has good potential to multiply the monthly loan volume originated by Prosper, as chances for obtaining a loan were in the past harmed in some states by low state interest rate caps (especially for lower credit grades).
CBS evening news p2p lending video
CBS recently featured Prosper and Lendingclub under the headline "Beating the financial giants at their own game".
Lending Club hits 10 million US$ loan volume
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).
Reports on Prosper Days 2008
Prosper Days 2008 took place Monday and Tuesday. Judging from the impressions of attending lenders, who blogged about it, it was a well organised event, but for seasoned lenders there were few news announced. No news about the long awaited secondary market. One blogger sees the Bidding via API function as highlight. Further news is that Prosper will start suing borrowers who defaulted on their loans. This could improve results in the collection process, where effiency is low. Explanations of Prosper about which changes were tested in the collection process were appreciated.
A good improvement will be Prosper's plan to change payment dates. So far the date a payment is due has been dependent on the initiation date of the loan. Soon payment dates will be matched with borrowers pay day. I am sure this will reduce lates, but I do wonder why such an obvious and easy change was not implemented much earlier. Some of the international sites from inception took into consideration at which time of the month the borrowers are likely to be liquid when setting payment dates.
I hope Prosper will publish videos of the session on their website, like they did with the Prosper Days 2007.