1. Lender
1.1. Requirements
1.1.1. Can a business lend through our platform?
1.1.1.1. Yes
1.1.1.1.1. Private investment managers, hedge funds and money managers
1.1.2. Who can lend?
1.1.2.1. Investors are individuals and organizations that have the opportunity to buy our Notes.
1.1.2.1.1. Lenders population break down into multiple segments: we’re seeing a lot of people loading $200-$300 into their Lending Club account (but that might very well be people ""tryign it out""), quite a few $1,000 – $5,000 investments, and also a few larger investments from ""super-lenders"".
1.1.2.2. Investors must either:
1.1.2.2.1. have an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or
1.1.2.2.2. have a net worth (determined with the same exclusions) of at least $250,000.
1.1.2.3. From time to time, LendingClub itself funds member loans or portions of member loans.
1.2. Amount
1.2.1. Anything from $25
1.2.2. 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. Repayment
1.3.1. Member loans are unsecured obligations of individual borrowers with a fixed interest rate
1.3.2. Member loans have an amortizing, monthly repayment schedule and may be repaid in whole or in part at any time without prepayment penalty.
1.3.2.1. In the case of a partial prepayment, we automatically reduce the outstanding principal and the term of the loan is effectively reduced as the monthly payment is unchanged.
1.3.3. Turn your Notes into cash anytime: it takes less than 5 days to sell Notes on the secondary market.
1.4. Timeframe
1.4.1. 3 or 5 years
1.5. Interest Rate and Return
1.5.1. How should I decide on my rates?
1.6. Safety of Money
1.6.1. One basic affiliation listed for every borrower member is the borrower member’s home state, which is based on the borrower member’s verified address.
1.6.1.1. Borrower members may also choose to list an affiliation with a company, educational institution or association. We do not verify these additional stated affiliations, and borrower members are not required to list them.
1.6.2. We perform targeted income verification primarily
1.6.2.1. • if we believe there may be uncertainty about the borrower member’s employment or future income
1.6.2.2. • if we detect conflicting or unusual information in the loan request;
1.6.2.3. • if the loan amount is high;
1.6.2.4. • if the borrower member is highly leveraged;
1.6.2.5. • if we suspect the borrower member may have obligations not included in the borrower member’s pre-loan or post-loan debt level, such as wage garnishment collection accounts; or
1.6.2.6. • if we suspect a fraudulent loan request
1.6.3. We also conduct random testing. From time to time, we also randomly select listings to verify information for the purpose of testing our policies and for statistical analysis.
1.7. Avaliable information
1.7.1. Will I know who my borrowers are?
1.7.1.1. We do not verify or monitor a borrower member’s actual use of funds following the funding of a member loan. Investors have no ability to verify borrower member information and we do not verify a borrower’s income or employment solely at the request of an investor.
1.7.1.2. Loan requests appear under screen names, not actual names.
1.7.1.3. Investors are able to view:
1.7.1.3.1. the requested loan amount;
1.7.1.3.2. loan grade (determined using the process described above), interest rate and annual percentage rate for the member loan;
1.7.1.3.3. anonymized data from the borrower member’s credit report, including FICO score range, level of debt, current delinquencies, recent bankruptcies, collections, open tax liens, open accounts, credit inquiries, utilization of credit limit and length of credit history;
1.7.1.3.4. term, three or five year;
1.7.1.3.5. the borrower member’s self-reported income and employer and whether that income or employment has been verified by LendingClub;
1.7.1.3.6. total funding that has been committed to date to Notes that will be dependent on the loan;
1.7.1.3.7. the number of investors committed to funding Notes that will be dependent on the loan;
1.7.1.3.8. the borrower member’s self-reported intended use of funds.
1.8. Fees
1.8.1. Our service charge is equal to 1.00% of the payments for principal, interest and late fees received by us from borrower members in respect of each corresponding Member Loan (in each case excluding any payments due to us on account of portions of the corresponding Member Loan, if any, funded by us).
1.8.2. Beginning in March 2011, we began charging certificate investors in our two private investment funds monthly management fees that are based on the month-end balances of their partners’ capital accounts.
1.8.3. Our procedures generally involve the automatic debiting of borrower bank accounts by ACH transfer for the scheduled monthly principal and interest payments due on the Member Loan. If a borrower member chooses to make a loan payment by check, we impose a $15.00 check processing fee per payment, subject to applicable law. We retain 100% of any check processing and other processing fees we receive to cover our costs.
1.8.4. Examples
1.8.4.1. Assume that an investor purchases a $100.00 Note corresponding to a member loan bearing interest at 8.00%.
1.8.4.1.1. If the member loan is paid in full according to its terms over its full three year term, the investor will receive aggregate Note principal payments of $99.00, or $100.00 minus the 1.00% service charge, and aggregate Note interest payments of $12.62, or $12.75 minus the 1.00% service charge.
1.8.4.2. Assume that the member loan corresponding to the Note is fully prepaid
1.8.4.2.1. • If the member loan is prepaid one month after issuance, the investor will receive a Note principal payment of $99.00, or $100.00 minus the 1.00% service charge, and aggregate Note interest payments of $0.66, or $0.67 minus the 1.00% service charge.
1.8.4.2.2. • If the member loan is prepaid following the first 6 months of payment, the investor will receive aggregate Note principal payments of $99.00, or $100.00 minus the 1.00% service charge, and aggregate Note interest payments of $3.71, or $3.75 minus the 1.00% service charge.
1.8.4.2.3. • If the member loan is prepaid following the first 12 months of payment, the investor will receive aggregate Note principal payments of $99.00, or $100.00 minus the 1.00% service charge, and aggregate Note interest payments of $6.81, or $6.88 minus the 1.00% service charge.
1.8.4.2.4. • If the member loan is prepaid following the first 24 months of payment, the investor will receive aggregate Note principal payments of $99.00, or $100.00 minus the 1.00% service charge, and aggregate Note interest payments of $11.08, or $11.19 minus the 1.00% service charge.
1.9. Taxes
1.9.1. If your earnings (as computed in accordance with IRS rules) reach certain thresholds established by the IRS, Lending Club will provide you with one or more IRS Forms 1099 each year and also submit the Form to the IRS. In general, an IRS Form 1099-INT is issued with respect to Notes issued prior to April 7, 2008 and an IRS Form 1099-OID is issued with respect to Notes issued after October 12, 2008. In addition, late payment fees will be reported as interest on the appropriate IRS Form 1099.
1.10. Trustee account
1.11. Insurance
1.11.1. Your Lending Club account cash balance is covered by FDIC pass-through insurance, subject to any applicable limits. Lending Club holds these funds at Wells Fargo Bank. Your Notes, however, are not insured.
1.12. Asset Management
1.12.1. Can you manage my account for me?
1.12.1.1. Yes
1.13. Diversification
1.13.1. In making loan purchase commitments, as of June 30, 2012, approximately 20% of investors state that they use “Portfolio Tool,” our proprietary tool that creates a suggested portfolio of Notes based upon investor provided information such as a target weighted average interest rate or other investment criteria selected by the investor.
1.14. Trading platform
1.14.1. We offer a secondary market to provide liquidity. You can put some or all of your Notes up for sale on the Note Trading Platform operated by FOLIOfn
2. Company
2.1. History
2.2. Regulation
2.2.1. Lending Club has registered the offering of its Notes with the Securities and Exchange Commission and files annual, quarterly and other reports with the SEC.
2.3. How It Works?
2.3.1. Lending
2.3.1.1. 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.
2.3.1.2. 2. Build your portfolio. You can spread out your investment over tens or hundreds of Notes. 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.
2.3.1.3. 3. Receive monthly payments. The repayments from borrowers are automatically credited to your account as they are received.
2.3.2. Borrowing
2.4. Account
2.4.1. Can I be both an investor and a borrower?
2.4.1.1. 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.
3. Borrower
3.1. Amount
3.2. Timeframe
3.3. Prepayment
3.3.1. The LendingClub platform allows a borrower member to prepay a member loan at any time without penalty, and all prepayments are subject to our 1.00% charge. Prepayments will reduce or eliminate the interest payments you expect to receive on a Note.
3.4. Requirements
3.5. Interest Rates
3.5.1. How is the APR calculated?
3.5.1.1. The loan APRs (Annual Percentage Rates) posted on our site include the origination fees paid by borrowers and the net annualized return earned by investors are calculated net after service charges and defaults.
3.5.2. How are repayments calculated?
3.6. Credit Score
3.6.1. Calculation
3.6.2. Key things that can influence the end result
3.6.2.1. Loan grade (A-G) is based on your credit score, loan purpose, employment type, loan amount, loan term, and credit usage & history.
3.6.3. Impact on Your Overall Credit Score
3.7. Insurance
3.7.1. Do you offer payment protection insurance?
3.8. Loan application
3.8.1. How do I cancel my loan?
3.8.2. I've applied for a loan what happens now?
3.9. Default
3.9.1. Collection Agency
3.9.2. Contact us
3.10. Fees
3.10.1. Are there any hidden charges?
3.10.2. When a loan is issued, borrowers pay a one-time origination fee (for 36 or 60 month loans) that ranges from 1.11% to 5.00% of the loan amount, depending on your loan grade. The origination fee is deducted from the loan proceeds before they’re deposited in your bank account.
3.10.3. Examples
3.10.3.1. 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%.
3.10.3.2. In the case of a $15,000 60-month loan at an interest rate of 7.90% with a 3.00% origination fee of $450.00, you will receive a loan amount of $14,550.00 and will make 60 monthly payments of approximately $303.43 at a 9.20% APR