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Lending por Mind Map: Lending

1. Investing

1.1. Eligibility

1.1.1. What are the requirements to become an investor? Both individuals and organizations can be investors. Individual investors must be at least 18 years old and have a valid social security number and successfully pass our identity verification mechanisms

1.1.2. Can I be both an investor and a borrower? Yes, if you are eligible and approved, you can be both, either consecutively or concurrently. Since your investor and borrower accounts are considered separate, you will need to use a different email address for each account you open. And for the protection of your account, you will need to go through the verification and authentication process each time you open a new account.

1.2. How It Works?

1.2.1. What’s the process? 1. Choose your account type. You can open an account online or by phone. We offer a broad selection of investing accounts and retirement accounts to meet your specific financial goals. 2. Build your portfolio. You can spread out your investment over tens or hundreds of Notes, and control the risk and return of your portfolio through the selections you make. You choose the type of Notes you invest in. Our portfolio building tool makes investing easy and quick, and our trading platform allows you to put your Notes up for sale at any time, giving your investment liquidity when needed. 3. Receive monthly payments. The repayments from borrowers are automatically credited to your account as they are received.

1.2.2. Is there a limit to how much I can invest? There is no set limit, but you may not purchase notes in excess of 10% of your net worth (exclusive of the value of your home, home furnishings and automobile).

1.3. Start Investing

1.3.1. Open an Account What is the minimum investment amount to open my account? There is a minimum investment of $25 required to open an investing account. Can I open more than one type of account? Yes. You may open any number of accounts, provided you meet the qualifications and eligibility requirements for each account you open. You will need a different email for each account. What is the process for opening an account? During registration, you will be asked to supply your bank account and routing number, and we will transfer a small amount (less than a dollar) from that account into your Lending Club account. When you see the transaction post to your bank account (usually within 2 to 4 days), sign into your Lending Club account to verify your account. The debit amount will automatically be returned to your bank account. At any point after registration, you will find an “Add a bank account” link in your account that will take you through the same process.

1.3.2. Funding Your Account How do I transfer money to or from my account? ACH (directly from your bank account) Wire Transfer Check PayPal

1.3.3. Account Types Individual account An account in your own name, under your total control. This is the “default” option—if you do not specify otherwise, your investing account will be opened as an individual account. Joint account An account in the name of two or more individuals holding joint interests Trust account An account in the name of a trust, with a trustee controlling the assets on behalf of a specified beneficiary. You can invest in Lending Club notes through your existing trust accounts or set up a new trust account through Investor Services. Corporate account An account opened in the name of a corporation or LLC. This type of account can be controlled by any designated representative of the corporation, providing flexibility. Custodial accounts You can also invest in Lending Club notes via accounts set up for minors

1.3.4. Build a Portfolio How do I select which loans I want to fund? Most investors spread their investment across hundreds of Notes, investing as little as $25 and as much as $5,000 into each Note. You can choose Notes to invest in using the automatic portfolio builder, which helps you instantly create a portfolio of Notes based on your desired interest rate and risk tolerance. Or you can build your own filters--search for notes based on criteria such as Credit Score, loan purpose, loan term (36 or 60 months), Debt-to-Income (DTI) ratio or even specific keywords in the loan description. Can I invest in a preset portfolio? Yes. As a convenience, we offer you the option of purchasing notes that have been pre-categorized to fit different investment strategies. You can select “Conservative,” “Moderate,” and “Aggressive” portfolios and tailor your risk and reward to your personal preferences. How do I receive my monthly repayments? Lending Club automatically withdraws payments each month from the borrower's bank account and then transfers your pro rata share of these payments, minus a 1% service charge, to your investor account. While in cash, your money will be insured by FDIC pass-through insurance.

2. General

2.1. About Lending Club

2.2. Fees

2.2.1. Service Fee How is the service fee charged? When distributing borrower payments to investors, Lending Club’s 1% service fee is applied. The impact of the 1% service charge on your Net Annualized Return is on average 0.45% on 5-year Notes or 0.71% on a 3-year Notes.

2.2.2. Origination Fee Borrowers pay an origination fee that ranges from 1.11% to 5.00% of the loan amount, depending on your loan grade (A1-G5), which is based on your credit rating. For example, if a borrower was offered a $5,000 loan at an interest rate of 6.03% with a 1.11% origination fee of $55.50, he would receive a loan amount of $4,944.50 and pay 36 monthly payments of $152.18 and a APR of 6.78%. The origination fee is deducted from the loan proceeds before they’re deposited in your bank account.

2.3. Rates

2.3.1. Net Annualized Return Net Annualized Return is based on funds actually received each month, net of our service charge of 1%. We make deductions to account for any defaulting loans. We refer to these deductions as "default status" amounts. As explained below, default status amounts are equal to the outstanding principal amount of any Note for which the corresponding member loan is 120 days or more delinquent. Assume, for example, that an investor purchases 50 Notes, each with an original principal amount of $200 and each bearing interest at 8.00%. Assume that all of the member loans corresponding to the 50 Notes fully perform for 12 months. The Net Annualized Return at the end of 12 months would be 7.83%. Now assume, for example, that an investor purchases 50 Notes, each for a principal amount of $200 and each bearing interest at 8.00%. In this example, assume that 45 of the member loans corresponding to the 50 Notes fully perform for 12 months. Assume that five member loans fully perform for the first two months they are outstanding, but in the third month, cease performing and enter default status in the seventh month. Because these five member loans have entered default status, we subtract the principal amounts of the five corresponding Notes in the monthly calculation for the seventh month. The result is a negative number, and the Net Annualized Return at end of 12 months would be -4.19%.

2.3.2. How does Lending Club set interest rates? Lending Club's interest rates take into account credit risk and market conditions. You can see current loan grades and interest rates at: https://www.lendingclub.com/public/how-we-set-interest-rates.action

2.4. Regulation and Compliance

2.5. Privacy and Security

2.5.1. How is my personal/financial information protected? The Lending Club website has a valid VeriSign SSL certificate, which means the site can secure your private information (information exchanged with any address beginning with https is encrypted using SSL before transmission). Our website is also certified by TRUSTe and a licensee of the TRUSTe Privacy Seal Program, which means the privacy statement and practices of Lending Club have been reviewed by TRUSTe for compliance with its strict privacy program requirements.

2.6. Terms of the loans

2.6.1. The loans have either 3-year or 5-year terms and are fully amortized over 36 or 60 monthly payments, respectively (each payment includes both interest and principal)

2.7. Payments

2.7.1. How do I receive borrower payments? Lending Club services the loan and collects payments from borrowers. All proceeds (principal and interest) are distributed, net of a service charge of 1%, to all investors who purchased notes associated with the loan payment

2.7.2. What to expect when a loan is late? Lending Club will make every effort to contact the borrower and bring the loan back to a current status

2.8. Taxes

2.8.1. Interest, debt forgiveness/cancellation, and other payments received from your Lending Club account are generally taxable. Lending Club does not provide tax advice

3. Borrowing

3.1. Eligibility

3.1.1. What are the basic requirements for borrowers? To borrow through Lending Club, you must be a US citizen or permanent resident and at least 18 years old with a valid bank account, a valid social security number and a FICO score of at least 660. Borrowers will need a debt-to-income ratio (excluding mortgage) below 35%. In addition, your credit history must show that you are a responsible borrower: with 2 or more revolving accounts with more than 36 months of credit history with less than 7 credit inquiries in the last 6 months

3.1.2. How do you verify that borrowers meet these criteria? We check your credit score and credit history through the major FICO reporting agencies; and in some cases we may require additional documentation during the review process to support the loan application.

3.2. How It Works

3.2.1. What’s the process? The borrower registration process includes several steps, during which we collect information to verify your identity and assess your creditworthiness. You will then be asked to complete a simple loan request. Once you pass the initial screening, we will show you several loans for which you qualify. After you select the loan option you prefer, we will list the loan. You will be asked to authenticate your bank account, which must occur before you can receive your loan funds. Your loan will be listed on our site for two weeks (or until you get fully funded, whichever happens first) during which time interested lenders will contribute portions of the amount you requested. We will let you know your loan has been funded, and you will be able to receive partial funding or relist your loan if you don't receive full funding.

3.2.2. Can investors see my personal information? No. This information is kept strictly confidential to protect everyone's privacy on the site. Borrowers and lenders are only known to each other by their chosen screen names.

3.3. Apply for a Loan

3.3.1. Can I apply for multiple loans? You may be able to apply for a second loan after 6 months of current payments in an existing Lending Club loan. You can only have a maximum of 2 loans in active repayment status on Lending Club. To apply for an additional loan, you will need to use a separate email address. The application process is the same.

3.3.2. How much can I apply for? You can apply for as little as $1,000 and as much as $35,000.

3.3.3. What if my loan does not get fully funded? Generally, if your loan request is at least 60% funded when your listing ends and the amount exceeds $1,000, it will issue unless you inform member support no later than the business day before the 14th day of your listing that you want to withdraw your loan request. I

3.3.4. What if my loan isn’t fully funded when my listing ends? If the loan is less than 60% funded when your listing ends, you have two choices if you wish to pursue funding. You can accept the partial funding amount that you have received toward the total you requested (if it exceeds $1,000); or you may relist your loan request for another 2 weeks. It is also possible to relist your loan, if you prefer

3.3.5. Do you have any tips for getting funded faster? How fast your loan funds depends on how complete your application is. You can accelerate the funding process by providing a detailed loan description, answering investor questions promptly, and sending any required additional information to Lending Club.

3.3.6. How do I verify my bank account? To verify your bank account, Lending Club will initiate a debit and a credit for the same amount (under a dollar) against your bank account. This activity will post to your bank account within 2-4 business days of you providing your bank account information. When you see this activity, please sign into your Lending Club Account Summary, click on the "Verify my bank account" on your "To Do List," and enter the transaction amount. Borrowers must verify a bank account in order to receive the loan proceeds.

3.3.7. How do I move funds to my bank account once the loan is funded? As long as you have verified your linked bank account and email with Lending Club, your funds will be automatically transfer by Lending Club within one business day and appear in your designated bank account within 2-4 business days, depending on your financial institution. Please note that 100% of the funded amount minus the origination fee will be transferred.

3.4. Repay for a Loan

3.4.1. Can I make additional loan payments? How? In addition to your regularly scheduled payment, we are always able to schedule extra payments for you.

3.4.2. Can I repay early with no penalties? Absolutely.

3.4.3. How do I make the loan payments? Can I pay online? Your loan payments are automatically withdrawn from the checking account that you registered and verified with Lending Club. Each month, we will send you a payment reminder several days before your monthly payment is withdrawn. If you need to make a loan payment by check, there is a $15.00 processing fee and that fee must be included with your payment. Payments by check must include the following information: your name, your address, and your loan number.

3.4.4. What if I’m late in making a payment? Borrowers have a 15-day grace period to make payments. If you have not paid by that time, we will charge a late fee. Depending on the lateness of your payment, we will report late borrowers to credit bureaus and work with collection agencies to recover the lenders' money.