7/27/2019 Lending Club's rules.pdf

1/4

Interest Rates and How We Set ThemLending Club's interest rates take into account credit risk and market conditions. The final interest rate for

each loan grade is the result of the following equation:Lending Club Base Rate + Adjustment for Risk & Volatility

The Adjustment for Risk & Volatility is designed to cover expected defaults and provide higher risk-adjusted returns for each loan grade increment from A1 to G5.

The loan grade is the result of a formula that takes into account not only the borrower's credit score, butalso a combination of several indicators of credit risk from the borrower's credit report. All loans haveeither a 36- or 60-month term, with fixed interest rates and equal payments.

Table 1. Loan Grades

Loan GradeSub-GradeLending Club Base RateAdjustment for Risk & VolatilityInterest Rate

A

1 5.05% 0.37% 5.42%2 5.05% 0.94% 5.99%

3 5.05% 1.94% 6.99%

4 5.05% 2.44% 7.49%

5 5.05% 3.44% 8.49%

B

1 5.05% 4.94% 9.99%

2 5.05% 5.54% 10.59%

3 5.05% 5.94% 10.99%

4 5.05% 6.44% 11.49%

5 5.05% 6.94% 11.99%

C

1 5.05% 7.94% 12.99%2 5.05% 8.44% 13.49%

3 5.05% 8.94% 13.99%

4 5.05% 9.74% 14.79%

5 5.05% 10.18% 15.23%

D

1 5.05% 10.57% 15.62%

2 5.05% 10.94% 15.99%

3 5.05% 11.44% 16.49%

4 5.05% 11.84% 16.89%

5 5.05% 12.44% 17.49%

E

1 5.05% 12.94% 17.99%

2 5.05% 13.34% 18.39%

3 5.05% 13.74% 18.79%

4 5.05% 14.24% 19.29%

5 5.05% 14.64% 19.69%

F

1 5.05% 15.20% 20.25%

2 5.05% 15.57% 20.62%

3 5.05% 15.94% 20.99%

4 5.05% 16.31% 21.36%

5 5.05% 16.69% 21.74%

7/27/2019 Lending Club's rules.pdf

2/4

G

1 5.05% 17.06% 22.11%

2 5.05% 17.43% 22.48%

3 5.05% 17.80% 22.85%

4 5.05% 18.17% 23.22%

5 5.05% 18.54% 23.59%

Loan Grades and Risk ModifiersUsing the credit score as the basis of historical credit performance, we first assign each loan into a basesub-grade. We then modify the sub-grade using the following credit risk indicators:

Requested loan amount

Number of recent credit inquiries

Credit history length

Total and currently open credit accounts

Revolving credit utilization

Loan maturity: 36 or 60 months

By adding the modifiers to the base sub-grade, we arrive at the final sub-grade.

Table 2. Initial Loan Sub-Grade Assignment

FICO ScoreLoan Grade770+ A1747-769 A2734-746 A3723-733 A4714-722 A5707-713 B1700-706 B2693-699 B3686-692 B4679-685 B5675-678 C1671-674 C2668-670 C3664-667 C4

660-663 C5

Table 3. Guidance Limits by Loan Grade

Loan GradeGuidance LimitA1 $25,000A2 $20,000

A3- A5 $15,000B $12,500C $10,000

7/27/2019 Lending Club's rules.pdf

3/4

Table 4. Loan Amount vs. Guidance Limit Risk Modifier

Loan Amount/Guidance Limit RatioRisk Modifier

0-24% 025-49% -150-74% -275-99% -3100-124% -4125-149% -5150-174% -6175%-199% -8200% or more -10

Table 5. Recent Inquiries Risk Modifier

# Inquiries in the Last 6 MonthsRisk Modifier0 A +1, B +2, C +31-3 04 -15 -26 -47 -68 -109 or more DeclineBorrowers with 4 or more credit inquiries in the last 6 months and a credit score below 740 will bedeclined.

Table 6. Credit History Length Risk ModifierCredit History Length (months) Risk Modifier60 or more 055-60 -149-54 -243-48 -337-42 -4

7/27/2019 Lending Club's rules.pdf

4/4

Table 8. Revolving Credit Utilization Risk Modifier

Utilization Risk Modifier