Last week week I wrote a comparison of Prosper and Lending Club based entirely on loan volume in reaction to the Lending Club claim: 100 Days and a Million Dollars in Loans! Prosper had 2.6 times the loan volume: Lending Club vs Prosper — The First 100 Days Take 3
Lending Club took exception to the claim (see comments in RateLadder post). On 2 grounds. The first being that facebook wasn’t a public launch (huh?) and the second being they they have tighter criteria than I was using in the comparison.
Facebook is not a public launch? Over 39 million users. 60% outside of college. Fastest growing segment 25+ year olds. Ok, I concede. I propose to compare Lending Club’s 2nd 100 days (1st hundred days after the public launch) to Prosper’s 1st hundred days. Stay tuned. Roughly 90 days from now we should have the answer.
As for underwriting criteria. I used Prosper credit grade C (>640 scoreX) and DTI of < 20%. Lending Club requires at a fico of >640 and other criteria including DTI (no more than 25%), and loan amount. However, I am standing by my approximation and would argue that if anything I am shorting Prosper. On what grounds? Prosper’s DTI is post loan. Lending Club’s DTI is pre loan.
Want to discuss this and other Lending Club, Prosper, or any other p2p lending site issues? Join me at the P2P No Bank P2P Lending Forum. Registration is free and easy, here is the link to register: register.
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2 comments ↓
Using pre-loan DTI (max 25%) was done on purpose to be able to respond to the borrower with counter-offers on the loan amount, should the FICO/DTI/loan amount combination throw the user beyond acceptable limits. For example, someone with a DTI of 20% with 650 of FICO score may be asking for $25k, while they can max amount they can borrow on Lending Club is $1k. The range of “possible amounts” are shown to the user, thus giving him/her alternatives to do business with us.
That sounds like a great reason for the choice you made. I was simply pointing out the difference. No judgment other than as a means for justifying my simplification of the comparison.
Btw — My bank account verified this morning and my funds are on the way to Lending Club.
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