Comments on: Lending Club Drops Borrower Interest Rates

By: George Brisbane

George Brisbane — Sat, 10 Apr 2010 21:17:10 +0000

Great concept in a competitive market. We need more of these schemes all around the world to help keep the big financial institutions honest.

By: 100 Important Personal Finance Posts for Women | Accounting Degree.com

100 Important Personal Finance Posts for Women | Accounting Degree.com — Thu, 11 Feb 2010 02:56:12 +0000

[...] Lending Club Drops Borrower Interest Rates. This post covers a few details about Lending Club and talks about how to use a loan through them to consolidate your high-interest debt. [...]

By: Matt Jabs

Matt Jabs — Wed, 10 Feb 2010 18:08:33 +0000

The unofficial word from Lending Club is that they “observed that defaults continue to trend lower, which gave us the opportunity to decrease rates to borrowers while preserving investors’ net returns (rate – defaults&fees). Also, lower interest rates help attract higher quality borrowers, leading to less defaults, so it is a virtuous circle.”

By: » Lending Club Reduces Interest Rates for Borrowers @ fivecentnickel.com

» Lending Club Reduces Interest Rates for Borrowers @ fivecentnickel.com — Mon, 08 Feb 2010 17:36:46 +0000

[...] noticed this when I logged in to select notes for investment last week, and have seen mention of it elsewhere on the web. Rates now range from a low of 6.39% for those with the best credit to high of 21.64% for the most [...]

By: » Weekend Reading for February 6, 2010

» Weekend Reading for February 6, 2010 — Sun, 07 Feb 2010 21:55:40 +0000

[...] “Lending Club Drop Borrower Interest Rates” : Debt Free Adventure – This is great for borrowers, but not so great for lenders like me. I suspect Lending Club wants to attract more borrowers to better compete against the banks. [...]

By: Investor Junkie

Investor Junkie — Sun, 07 Feb 2010 21:19:49 +0000

Simple supply and demand. They have also upped their affiliate fee for new loans. Still stinks for us who are lenders as I consider their loans riskier than other types of bonds (if you consider it in that class)

By: Matt Jabs

Matt Jabs — Sun, 07 Feb 2010 16:07:21 +0000

I have contacted Lending Club to inquire as to why but have not yet heard back. My assumption is it’s an attempt to secure more borrowers.

By: nickel

nickel — Sat, 06 Feb 2010 22:41:32 +0000

Lower rates is bad news for lenders. Any idea why they decided to do this?

By: Patrenia

Patrenia — Thu, 04 Feb 2010 02:56:45 +0000

I’ve never heard of Lending Club. I took a look at the website and it’ a great concept. I must say that I like it. I don’t have any loans outstanding, but it’s great to know about the options that are available if ever needed.

By: Matt Jabs

Matt Jabs — Thu, 04 Feb 2010 02:16:42 +0000

True that IJ, true that. Oh well, borrowers probably need the break more than investors anyway… and investors are still earning great returns – everybody wins.

By: Investor Junkie

Investor Junkie — Thu, 04 Feb 2010 01:43:14 +0000

Great for borrowers! Not so good for investors like me.

By: Mrs. Money

Mrs. Money — Wed, 03 Feb 2010 22:00:05 +0000

Wow, I think you got a great rate and great deal! I am sure you will have it paid off quickly.

By: Matt Jabs

Matt Jabs — Wed, 03 Feb 2010 20:39:28 +0000

What Ted mentions about repaying CC debt and what I mention about DTI are ultimately the same thing.

By: Matt Jabs

Matt Jabs — Wed, 03 Feb 2010 20:37:36 +0000

I agree Ted. You mention how individual investors will now receive your interest payments instead of “Mr. Bank.” That was also one of the motivating factors for me to choose peer to peer lending. In a way we are “sticking to the man”, and this is especially attractive now that “the man” has been able to get the government to bail them out of their bad business decisions using our taxpayer dollars. *sigh*

By: Ted

Ted — Wed, 03 Feb 2010 20:36:31 +0000

It actually doesn’t affect my credit- and it will increase it as I am transferring CC debt over and then paying it off faster than I would have with the higher interest rate.

Awesome Matt and repaying it so well- I am hoping to do it that fast as well. 2 years is my goal.

By: Matt Jabs

Matt Jabs — Wed, 03 Feb 2010 20:33:34 +0000

The standard repayment period with Lending Club is 3 years, but the borrower can prepay the loan at any time with no penalty.

For example, on the 8th of every month my automatic loan payment (based on the 3 year repayment plan) is sent to Lending Club. Then at the end of the month I always send an extra payment to them manually. My loan was issued as $11,000 in 8/2009 and the balance is currently around $4,200 because I have prepaid so aggressively (and hope to have it paid off by 3/2010.)

The borrowers credit score could go up or down based on WAY too many other factors, but in my case my credit score change was negligible although I’m sure it will raise with time since my DTI continues to improve.

By: Kate

Kate — Wed, 03 Feb 2010 20:25:35 +0000

So you have had a good experience with Lending Club? I have read so many blog articles on why not to be a lender with Lending Club, but have not heard much on the borrower side. What type of repayment schedule do they give you? Also, does this affect your credit score negatively or positively?

By: Ted

Ted — Wed, 03 Feb 2010 19:31:51 +0000

I just became a borrower with Lending club and I am so happy. After 12 hours, 10% of our loan is already funded. I love seeing what cities people come from and where they work. They are trusting me with their investments. AND they get my interest money, not Mr bank.

It is a great option if your credit isn’t ruined by debt (luckily, we survived).