Posts Tagged ‘Lending Club’

Lending Club and Prosper Cap 2011 with Huge Volume Growth

2011 was a tremendous growth year for peer-to-peer lending, and the rapid pace is likely to continue in 2012 as investor returns and borrower costs stay attractive relative to other investment. There were $333 million in P2P loans issued in the U.S. from Prosper and Lending Club combined – a 117% growth over 2010.

Competitively, Lending Club continues to dominate the market, issuing $257 million (77%) of the loans this year, according to TheLoanSheet.com analysis. This number is down from the 82% of the market it held in 2010. But a couple of other notable trends also emerged. For one, Prosper has significantly increased its share of loan volume, totaling almost 30,000 loans issued during the course of the year. In January, Prosper was issuing under 30% of the loans, but that share had grown to 38% by December.

                                                      2011 Peer-to-Peer Loan Volume

At the same time, Lending Club has been able to increase the average size of its loans more quickly – from $10,000 per loan in January to $13,677 by December. Prosper’s average loans size remained far smaller – growing from $5,382 in January to $6,885 by December. Loan size can play an important role for a loan marketplace because larger loans tend to generate higher investor returns. Lending Club has recently pounced on this opportunity by waiving fees for investors that participate in loans over $20,000. At the same time, TheLoanSheet.com shows that Prosper does allow a slightly broader pool of borrowers,  with a higher risk/reward loan than Lending Club, so its smaller loan sizes may serve to mitigate some of that risk.

In December, peer-to-peer loan volume continued its torrid growth, as Lending Club and Prosper issued a combined 3,647 loans for $40 million. In the same month last year, the total was 1,824 loans for $14.9 million in loans.

Lending Club Waives Investor Fees on Large Loans

Lending Club waives investor fees for large loans

Lending Club net average returns

Lending Club announced today that it has waived the 1% service fee for lenders on loans of at least $20,000.

The move, which is for a limited time, should be good news for borrowers seeking large loans, as it encourages greater investor participation and closure rates for loans of this size. According to Lending Club’s site, loans of $20,000 or more have historically outperformed smaller loans for investors. However, such loans likely attract a lower level of participation, in part, because larger loans are typically viewed as more risky. Lending Club charges borrowers higher interest rates for larger loans.

But for investors, it appears that returns are outweighing the risk. Loans of $20,000 + provide a net average return of 10.5% to investors, versus, say, only 7.44% for loans under $5K, according to the Lending Club site. The rate waiver, will effectively increase investors’ expected net annualized returns to between 0.42% and .75% more, depending on loan term and interest rate.

To encourage participation, the site is even tagging such loans in the investor loan listings section as “No Fee.” Lending Club has not given an end date to the promotion.

For small businesses seeking a loan of over $20K, this may be a good time to try out Lending Club.

 

Lending Club Originates $400 Million in Personal Loans

Lending Club announced on November 3rd, that it had reached $400 million in total loan originations through the platform since the site’s inception..
The milestone comes less than four months after Lending Club reached $300 million in total loan originations in July. Lending Club loan originations are growing by more than 150 percent year-over-year, and the platform has now paid investors more than $33 million in interest.
“Lending Club has had a monumental year, with growth averaging 10 percent month-over-month and continuing to accelerate,” said Lending Club CEO Renaud Laplanche. “We believe the rapid growth in capital invested through our platform, coupled with the growth of our team to include executives with decades of experience in investment management, has us poised to finish the year with a bang, and move into 2012 with tremendous momentum.”
By focusing on prime and super-prime quality borrowers, Lending Club has established a four-year, $400 million track record in which Prime Consumer Notes generated 17 consecutive quarters of positive returns and average annual returns of 5.5 percent to 12 percent depending on loan grades.