Lending Club is the leader in peer to peer lending. They recently had a successful IPO resulting in a total valuation of $9 billion. In this review of Lending Club we discuss their history, how it works and potential advantages over traditional banks. We also analyze why investors should consider Lending Club as well as the potential savings that borrowers and expect.

1. Lending Club Review
From Idea to IPO

2. 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.

3. “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

4. 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.

5. 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

6. Advantages of Borrowing
with Lending Club
Since 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%.

7. 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: $18,715
Total 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

8. Advantages for Lenders
and Investors
Lending 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.

9. In Conclusion
Lending 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.