A Lending Club (LC) is an equal market that allows people with extra money to invest their money in people who require money. This is a great solution for both ends of the spectrum: investors and borrowers.
The annual net income since June 2007 for LC investors was 9.67%. Since June 2007, these figures exceed stocks and bonds; however, a period of three years is a very small sample size. The historical return on equity was about 7%, and even lower bonds. Even if the average performance of the Lending Club does not remain so high, it will definitely be a valuable investment.
Borrowers, on the other hand, can get loans at rates of up to 6.78%
The actual rate depends on your credit rating, loan period, loan amount and credit history. The current national average for a loan from 5,000 to 36 months is 12.26%. There is no reason not to check and find out if LC can give you a lower rate.
Lending club loans available can provide higher returns for investors and lower rates for borrowers because direct investment with a borrower is a very efficient system. Banks and credit card companies have much higher transaction costs. LC takes a percentage of both investors and borrowers.
Currently, the presentation of Chapter 11 is unlikely
They are financed by investment capital. The company received three rounds of investment. First, they received angel capital of $2 million. In August 2007, the business received a $10 million round from Norwest Venture Partners and Canaan Partners. They then received $12 million from a round of Series B, and as of April 2010 – $24.5 million in funding for Series C. To date, their investments are $53 million.
In 2008, they completed the registration of the SEC. According to the SEC, you must also submit reports every three months, and you can access reports online. At the time of this writing, September 30, 2010 is your last quarterly report. They have 21 million dollars on hand. A little known fact is that many loans are partially funded on their own.
The strategy is to invest in qualified B notes for people who are trying to consolidate their debts
The idea is that borrowers to whom you give money already pay debts. Since they consolidate debt at a lower interest rate, it will be easier to repay the debt because the monthly payment will be reduced. Lending Club even offers bonuses for new investors.