Comprehensive Reviews Of The Lending Club
What Is the Lending Club?
The Lending Club is a peer-to-peer online lending platform that was founded in 2007. The platform enables investors to lend money to borrowers in the form of unsecured personal loans. The Lending Club is not a bank and does not take deposits, but it does provide an alternative source of financing for borrowers who may not be able to obtain a loan from a traditional bank. The Lending Club has facilitated more than $35 billion in loan originations since it was founded and the platform currently has more than 2 million members.
How Does the Lending Club Work?
The Lending Club operates an auction-style marketplace where lenders can bid on loans that meet certain criteria. Borrowers submit loan applications to the platform and potential lenders can review the applications and decide if they want to invest in them. The loans are then sold in increments of $25 to a large number of potential investors. When the loan is fully funded, the funds are disbursed to the borrower and the loan is serviced by the Lending Club. The Lending Club charges a 1% origination fee to the borrower and a 1% servicing fee to the lender.
Benefits of the Lending Club
The Lending Club has a number of benefits for both borrowers and investors. For borrowers, the platform offers a streamlined application process, competitive interest rates, and a variety of loan terms to choose from. The Lending Club also has a reputation for approving borrowers with less-than-perfect credit, which makes it an attractive option for those who may not qualify for a bank loan. For investors, the platform offers a convenient and low-risk way to invest in unsecured personal loans. The Lending Club also has a solid reputation for providing a high rate of return on investment for its investors.
Risks of the Lending Club
The Lending Club does have some risks. For borrowers, the interest rates may be higher than what is available from a traditional lender, and there may be additional fees associated with the loan. For investors, there is the risk of default on the loans, as the Lending Club does not provide any guarantees that the loans will be repaid. Additionally, the platform does not provide any protection for investors if the borrower does not pay back the loan.
Is the Lending Club Right for You?
The Lending Club can be a great option for both borrowers and investors, as long as they are aware of the risks and costs associated with the platform. Borrowers who are looking for an alternative source of financing may find the Lending Club to be a good option, as long as they understand the fees and interest rates associated with the loan. Investors should also understand the risks involved in investing in unsecured loans and should diversify their investments to reduce their risk of default.
Conclusion
The Lending Club is a great option for both borrowers and investors who are looking for an alternative source of financing and investment. The platform offers competitive interest rates, streamlined application process, and a variety of loan terms. However, it is important to understand the risks associated with the platform and to diversify investments to reduce the risk of default. Overall, The Lending Club can be a great option for those who are looking for an alternative to traditional financing and investment.