Borrowers can apply for loans for any purpose whatsoever, including borrowing money to travel …
Home CNNMoney said peer lending service (peer-to-peer Lending) are blooming in the US, the connection between those who have money to lend and those who need to borrow money for any purpose, from purchase to go Tourist.
On Thursday this week, Lending Club, a company in the field of peer lending service has issued shares of initial public offering (IPO) resounding success, with the share price soared more than 50% compared with originally expected. This release provides services to Lending Club amount of 870 million, with the share price 15 USD.
The success of Lending Club is considered as a positive signal for trend-peer lending in the United States in the context of its banks struggling to find a higher level of profitability amid record-low interest rates, and consumer Using it difficult to persuade banks to lend.
Operational model of Lending Club is quite simple: the borrower can apply for loans for any purpose whatsoever, including borrowing money to stay. Lending Club will connect them with an investor, who provide loans to be paid monthly interest.
Each loan will be attached “points” based on factors such as credit history and income of the borrower. Maximum loan amount of $ 35,000 for individuals and $ 100,000 for corporations.
Director of Lending Club activities Scott Sanborn said, the pattern of the company that investors can find funds to lend because understandable than investing in stocks.
“Basically, everyone understands the loan at a fixed rate. They feel comfortable and in control of this loan, “Sanborn said.
According to the website of Lending Club, the average interest rate for a loan to an “A” is 7.6%. The loan has the lowest score “G” interest rate of about 25%.
According to Lending Club, about $ 6 billion loan granted by the company since the company began operations in 2006 and has 596 million interest is paid.
Of course, peer lending is still a relatively new field and there are many issues unclear. Rising interest rates, bankruptcy and lawsuits are still happening. In a document submitted to the Committee of the US Securities and Exchange (SEC), Lending Club referring to “negative view of the public” to peer lending by many people still see it as a risk areas .
Lending Club with the participation of the veterans in the US financial world. Board of Directors of this company include former US Treasury Secretary Larry Summers Ministry and former Morgan Stanley CEO John Mack bank.
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