The ideal destination for any kind of loan, borrowing for any special occasion, as wells as the consolidation of any credit card debt is LendingClub. The origin of the popular peer-to-peer lending available in the marketplace has is from here. This is the place that has helped boost up the number of available lenders in the market by connecting prospecting borrowers with potential investors willing to foot the loans. This virtual space is best suited to people with a clear borrowing background to attract higher valued investors.
With the motto of constantly reinventing itself through much more dynamic and interesting solutions for any problems arising related to moneylending and repayment of loans. Customers here are treated with the same ethical tendencies and morality it follows while garnering investors to their site- it is all a matter of crystal clear communication without a shadow of doubt in between. Their purpose is to make the accessing of credit hassle-free for everyone, from a layman to a rich industrialist.
Features of LendingClub
Investing with LendingClub has mostly reached to huge profits for the investors. Statistics of the sits claim that, at least. LendingClub goes beyond and also factor in the laziness to find the perfect candidate for borrowing. It has tried to reduce the risks related to this kind of peer-to-peer network borrowings.
In spite of its best efforts to make the process of borrowing and lending seamless- there still arises troubles over the credibility of the information made available by the public. The dubiousness shown by the public makes the entire screening process for the loans, tougher than usual. Even the personal section of the loans done through a fervor measure of screening has ended up with loan defaulters in the end. Therefore, LendingClub has made the system of grades for differentiating such loan defaulters from positive investment options. This is denoted by a ranking of A-G grades- higher the better, lower, the worse.
Requirements of LendingClub
The concept of peer to peer banking is very simple and efficient. It constitutes of a lender and a borrower, but in this case, the lender is not some big bank, but normal people like us who like to invest in clients, and earn returns (loans with interest) in return. For example, if a person is looking for a $1000 loan, a group of people along with me can pool in the money by investing a very small $25 each. The lending network (Lending Club, in this case) gives out the money to the one in need and then asks for the repayment with interest. A fee is also charged upon the processing of the loan. Then, the interest collected on the principle loan amount is rightly distributed between me and the others who loaned the amount to the person.
It all begins with the borrower in the process of filing for a loan in the LendingClub peer to peer network. After the application, they will be processed and checked whether they have the minimum criteria or not (such as a FICO score of 660). The available loans can be reviewed by the investors so that they can shortlist potential customers. The little reviews left by the investors for other investors act as a warning sign for the new investors, and they try to invest more wisely
Full background checks are conducted for every borrower listed on the website, the main purpose behind this is to avoid any loss of money by the investors thoroughly wrongly investing in a loan defaulter’s account. Throughout this comprehensive background check, investors may provide extremely small loans to these people. If nothing turns up in the checking, then it’s all good and fine- however, if something is found then the money is returned to the lenders and the account of the creditor is taken off the website. This process can go on for 14 days.
Benefits of LendingClub
The credit crisis that emerged due to the ill-functioning of the banks has given a positive way to websites such as LendingClub where the growth of peer to peer networks has given rise to credit creation too. LendingClub effortlessly filled the place in the market for such accredit loaning financial institutions and garnered a lot of business in the years. The borrowers who pass the rigorous checking and get the green light usually get their money in a few days. They have started making their payments from the 30th day- the loan amount plus interest.
2013 was a turning point for LendingClub where they garnered more traffic than ever. This increased amount of traffic meant that the borrowers were being taken up by potential investors in mere seconds. There is some very specific time when the new loans are added to the website for the investors to jump on- to get the best out of the lot, LendingClub must be checked at 6 am, 10 am, 2 pm, and 6 pm Pacific Time all days of the week.
To get the best loan options this time is the peak ones, however, the luck is tough during the peak hours because of the heightened traffic on the website. Unless the lender is quick enough, the loan may get out the hand into some other investor. The lender scenario at LendingClub is quite interesting, because on one hand it is peppered with hobbyists and small-time investors, and on the other, it has got huge investing giants probably using some kind of algorithm to sort out the best loans from the wide array.
Without constant diligence and thoughtful decision making, this peer to peer network might turn out risky. So it is wise to think things through before investing a large amount of money to a person who has a shady background check scenario going on. LendingClub tries their level best to avert as many as possible risks but sometimes they are just unavoidable. The big network companies have their techniques, so finally the importance of wise judgment falls on the investor.
