Lending Club Review

From Idea to IPO

Lending Club is the leader in peer to peer loans.

About

Borrowers apply for loans on the Lending Club

platform and their requests are filled by investors.

Since starting in 2007 Lending Club has facilitated

over $6.2 billion in these types of loans.

On December 11, 2014 Lending Club launched their

initial public offering on the NYSE. The stock

priced at $15 a share shot up nearly 60% during its

first day.

“I believe we can transform the current banking

system into a frictionless, transparent and highly

efficient online marketplace that provides

affordable credit to borrowers and creates great

investment opportunities for investors, helping

millions of people achieve their financial goals"

- Renaud Laplanche, CEO of Lending Club

CEO Renaud Laplanche came up with the idea for Lending Club

when he realized the discrepancy between his credit card bill

and savings account accrual.

In the Beginning…

If Laplanche were to carry over his balance on his credit card,

he would pay 18% interest. Meanwhile his savings account

with the same bank netted him 1% interest. Where was the 17%

going?

In 2007 Lending Club began as a Facebook

application before launching their own site.

With investments from BlackRock, T Rowe Price and

Google, Lending Club was able to expand their offerings

in personal loans as well as small business loans.

Laplanche thought he could make banking more

efficient by operating only online.

After months of speculation Lending Club went

public on December 11, 2014.

‘LC’ Hits NYSE

Not only were they the first peer to peer company to go

public, but their IPO was seen as a watershed moment

for alternative lending and crowdfunding.

The IPO raised over $1 billion and brought the

company’s valuation to over $9 billion. It also ranked

as the 2nd biggest IPO of the year behind Alibaba.

Source: Mercury News

Advantages of Borrowing

with Lending ClubSince Lending Club operates exclusively online it has far less expenses than

traditional banks. This allows Lending Club to offer better rates to their customers.

Source: Federal Reserve Bank of Cleveland

Lending Club customers report securing a loan that’s an average 6.6 percentage points

lower than their credit card rate, saving them almost 30%.

A Look at Debt Consolidation

If you have $15,000 in Debt…

With a Lending Club Loan at

14.99% APR

On a Credit Card with19.34% APR

(29% higher)

Monthly Payments of

$519.87

Same payment

each month:

$519.87

With minimum

credit card

payment (4%)

Total Loan Cost: $18,715Total Loan Cost:

$20,795

Total Loan

Cost:$24,978

Loan would be paid off in

36 months

Loan would be

paid off in

40 months

Loan would be

paid off in

184 months

A survey of Lending Club customers who used their

personal loans to pay off credit cards showed they

saved an average of 29%. Using that number…

Source: Lending Club blog

Advantages for Lenders

and InvestorsLending Club investors can contribute as little as $25 towards a loan

being fulfilled.

Source: Lending Club

Lenders receive a portion of the interest rate from the loan based on

the loan’s letter grade. The riskier the loan, the higher interest a

customer pays. The more interest paid the more the lender’s profit.

In ConclusionLending Club has broken new ground by becoming

the first peer to peer lender to take their company

public.

By operating more efficiently, Lending Club is able

to offer lower interest rates than that of credit cards

and can help you to become debt free.

Investors can get better returns without all the

volatility of the market by contributing to personal

and business loans on the Lending Club platform.