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Lending Club Review: What You Need to Know About Lending Club in 2011
Posted by: | CommentsAlthough the Federal Reserve has made borrowing incredibly cheap, lending companies are still hesitant to make many types of loans, including unsecured personal loans to individual borrowers and loans to small businesses. Many banks have tightened their lending criteria so that only a small fraction of borrowers can actually get loans. Fortunately for borrowers and small business owners, there’s opportunity in the realm of peer to peer lending to borrow money at reasonable rates. One of the firms, Lending Club, is now setting up more than $10 million in peer to peer loans each month. Here’s our Lending Club Review for 2011.
About the Company:
Lending Club was founded in 2006 and currently has 48 employees. Renaud Laplanche is the company’s founder and Chief Executive Officer and the firm has originated more than $200 million in loans to date. The other man behind Lending Club is Rob Garcia who has been responsible for product strategy and social media marketing. Lending Club was originally based out of Sunnyvale, CA, but moved to Redwood City, CA in early 2010. The company has received several rounds of venture capital and has seen an explosion in their business in 2010 with over $2 billion in loan demand.
How The Peer-to-Peer Lending Process Works
If a borrower wants to get a loan from Lending Club’s investors, they simply go through Lending Club’s online application process and then Lending Club will provide instant approval and state an interest rate that the borrower can get a loan at. After the borrower completes their loan application, the loan will go into a 2 week funding period where individual investors can opt to partially fund part of the loan. After the loan is fully funded, the borrower will receive the funds and repay the loan across 36 or 60 equal payments. Lending Club takes care of the payment processing and distributes the borrower’s payments back to the participating lenders.
Lending Club Review from a Lenders Perspective
Start out with a small loan portfolio and be ready for some trial and error before figuring out a good mix of loans to invest in. Lending Club publishes the platform average net annualized return in real time, which in 2010 was consistently over 9.5%. Although it’s hard to pin down a magic number for an initial investment, it appears that investors who invest in 100 loans or more ($2,500 minimum investment) experience more stable portfolio returns (diversification is key).
Lending Club provides a great way to diversify one’s investment portfolio outside of stocks, bonds and real estate. Before you begin investing, make sure to understand how the process works and understand the risks involved. Start out with a small loan portfolio and be ready for some trial and error before figuring out a good mix of loans to invest in.
Here’s how to get started investing:
1. Open an account online—it’s easy and it’s free. (Open an account from this link, and you’ll receive a $25.00 deposit bonus for signing up through our Lending Club Review)
2. Deposit funds (via ACH, wire, check or PayPal).
3. Easily build a portfolio of loans based on your criteria.
4. Receive monthly payments of principle and interest. There are no maintenance fees.
Lending Club Review From a Borrowers Perspective
If you’re interested in getting a personal loan between $1,000 and $25,000, Lending Club might be an excellent way for you to get an unsecured loan with interest rates much lower than you would be charged if you simply borrowed on your credit card or got an unsecured loan from a bank. Lending Club loans amortize fully over a period of 3 years or five years (depending on what you choose). You will pay an interest rate between 5.42% and 21.14% depending upon your employment history and your credit score. There is also an origination fee (service fee to issue the loan) that ranges from 2% to 5% of the loan amount.
Here’s how to get started as a borrower:
1. Apply online—it’s free and takes just a few minutes
2. Get quick approval on a fixed-rate, 3-year loan from $1,000 to $25,000
3. Once approved, most loans fund in less than 2 weeks
4. Pay interest and principal monthly automatically from your bank account
Our Verdict
There’s a lot of opportunity for investors to put money into Lending Club loans, but remember that it’s an alternative investment and should not make up the bulk of your investment plan. If you’re a borrower in 2011, Lending Club is an excellent way to get an unsecured loan, but make sure that you can repay the loan before taking it out.
This article (Lending Club Review: What You Need to Know About Lending Club in 2011) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
They may not be the number one bank in assets, but in terms of CEO compensation, JPMorgan Chase (JPM) can say they’re number one.
After posting a $17.4 billion profit for 2010, JPMorgan Chase & Co. awarded Chief Executive Jamie Dimon restricted stock and options that could be worth $17 million.
The award is a large part of overall compensation for Dimon, who runs the second-largest U.S. bank by assets. It includes a grant of about $12 million worth of restricted stock, plus options worth about $5 million based on a commonly used valuation method.
Dimon’s total compensation package for 2010 will likely be higher than that of most of his banking peers.
By comparison (source, Reuters):
• Goldman Sachs Group (GS) chief Lloyd Blankfein was awarded $12.6 million of restricted stock. His salary more than tripled to $2 million.
• Morgan Stanley (MS) chief James Gorman received stock and option awards that could reach $7.4 million.
• BlackRock (BLK) Chief Executive Laurence Fink got $13 million of restricted stock
• Bank of America Corp. (BAC) said Brian Moynihan was awarded restricted stock units worth up to $9.1 million.
• Citigroup (C) Chief Executive Vikram Pandit’s salary will rise to $1.75 million from $1. Other elements of Pandit’s compensation have not yet been disclosed.
The details of his stock and option awards were released in a Thursday regulatory filing with the Securities and Exchange Commission.
Full details on his pay, including salary, any cash bonus and perks, will be released in a proxy filing later this year.
Just two years ago, Dimon and his counterparts were keeping a low profile as news of large pay packages was unwelcome news to a taxpaying public that saw billions of dollars sent to banks such as JPMorgan Chase – a move largely seen as a “bailout” against the complex transactions, such as derivatives, that were a key factor in what turned into a global economic pandemic.
While some of the popular anger has died down, taxpayers have not forgotten the hundreds of billions of dollars that the U.S. government used to prop up the financial sector.
JPMorgan has repaid the $25 billion of bailout funds it took from the U.S. Treasury, and is widely considered to have weathered the crisis better than most other major U.S. banks.
However, earlier this month, at their investor days, Dimon and other JPMorgan executives confirmed a slowdown in trading revenue, litigation tied to mortgages and foreclosure activity, and a $6.4 billion lawsuit over its ties to imprisoned Ponzi schemer Bernard Madoff.
Dimon was awarded 251,415 units of restricted stock, half of which vest Jan. 13, 2013, and half a year later, according to the filing.
He was also awarded 367,377 stock appreciation rights with a strike price of $47.73. These rights have a 10-year term and vest in five equal installments, beginning Jan. 19, 2012.
Dimon could lose some of his award, or vesting could be delayed, if he were to be fired, hide important risks or hurt the bank’s reputation, or if JPMorgan’s financial performance were to suffer, the filing shows.
This article (JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon Could Receive Up to $17 Million in Compensation) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
ReadyForZero Partners with Lending Club, a Peer to Peer Lending Firm.
Posted by: | CommentsA new Y-Combinator-backed start-up, ReadyForZero, hopes to help people get out of their credit card debt one month at a time. The company makes use of a debtor’s credit report data, cash flow, spending habits and helps consumers develop a plan to pay off its debt. The company has also established strategic partnerships, such as with Lending Club, to maximize the services that it can offer to borrowers.
Lending Club has a similar relationship with Mint.com, where Mint.com suggests to its users that are in debt that they could save on the amount of interest that they pay with a loan from Lending Club. ReadyForZero has also partnered with Lending Club to help borrowers refinance their debt with lower interest loans.
“After the credit crisis our country went through, deleveraging is top of mind for millions of Americans and getting rid of credit card debt has rightfully become a top priority for many—over 60% of loans issued through Lending Club have been used to help consumers pay off their high interest debt,” said Rob Garcia, Senior Director of Product Strategy at Lending Club and ReadyForZero Advisory Board Member, in a prepared statement to the press.
“ReadyForZero has built a simple and straight-forward solution that will help guide consumers through every step of the debt resolution process. I believe ReadyForZero is uniquely positioned to empower consumers to better assess their creditworthiness and manage their debt responsibly. This team is onto something disruptive.”
About Lending Club
Lending Club is an online platform that enables the issuance of and investment in consumer loans. Lending Club brings together investors and creditworthy borrowers — eliminating the cost and complexity of traditional bank lending — to offer borrowers better rates and investors better returns. Lending Club was recently recognized as one of the 20 “Breakthrough Ideas for 2009″ by Harvard Business Review, has been nominated for “Top 100 Innovators” by The Industry Standard, is on the JMP Hot 100 list, and the Always On Global 250 Top Private Companies list. In addition Lending Club won the Webby Award in 2008 for the “Best Banking Website”. Founded in 2006, Lending Club is headquartered in Redwood City, CA. More information is available at: http://www.lendingclub.com.
This article (ReadyForZero Partners with Lending Club, a Peer to Peer Lending Firm.) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.