Apparently LendingClub has too many listings for their available lender dollars. This is not surprising, with any emerging market there will be imbalances. They are taking positive steps to address the problem in both the short term and long term. The source of this imbalance seems to be an influx of borrowers that have joined the site after LendingClub went national.
In the short term, as I reported last week they are offering a 5% bonus for lending at least $5K before 2/3/2008.
Today, they announced a longer term solution for managing the problem of marketplace inequity: adjusting the base rate 50 basis points. I like to see that they are open to changing their fixed rates to match market conditions. This is a much more permanent solution managing imbalances. It is similar to the fed can setting the fed funds rate to control the money supply.
This tool can also be used when the long term lender ROI is a more stable quantity; thereby, ensuring an attractive risk free rate. Fred93 (one of the top 10 lenders by volume on Prosper) dissects the Lending Club lender ROI calculation.
Anyone wishing to try LendingClub should be sure to get a $25 signup bonus by using this link to signup: Signup via this link and receive a $25 startup bonus
Related Posts - Lending Club Files S1 with SEC Lending Club has filed an S1 with the SEC (link to S1 filing). It looks to be similar in nature to the Prosper filed an S1 reported here on 10/30/2007. This continues the Lending Club quiet period started on 4/8/2008. Originally I had guessed 7 months to 1.5 years for......
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- My 1st Lending Club Late I hate luck. I love randomness, but I have terrible luck (perception creates reality). I have 1 of the 4 lending club loans that are late in my portfolio. What are the odds? 4 out of the 913 Lending Club loans are late (source lending club statistics page) and 1......
- My Second Lending Club Late My second lending club late has infected my account. It was a small loan to a super clean borrower... These loan are not the one that typically go late. I have high hopes that it will cure... Chech out these stats. FICO Range: 714+ Earliest Credit Line 11/2000 Open Credit......
- Email From Lending Club I received an email from Merry Richter (Director of Content and Marketing at Lending Club). The email is basically announcing that lending club is now a marketplace off of Facebook in addition to on Facebook. I must have signed up for marketing email. --- Greetings from Lending Club! After 100......
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1 comment so far ↓
Going national was a big move on their part. It shows pent up demand. I’d like to see Prosper go national as well, but not if they have to make some deal with a bank that waters down the P2P nature of their lending.
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