I tried to call and sent them emails numerous times( have the emails to prove it) to only get a voice mail and no response to my email’s!

Like ED, they later sent me an email stating my income could not be verified… One would think that a credit score of 720 with a great repayment history along with good income would drive a return call from Lending Club.

That’s just bad business…

I have few questions – firstly, if a loan defaults, do you lose all your money on it? secondly, if you invest $25 on a loan, can you bail out at any time? or do you need to stick to it until it is all paid off? thirdly, once you get the interest/principals, can you withdraw it anytime instead of reinvesting? thanks

I understood your complaint: you believed that you had the loan in hand (once it had been funded by lenders) but then it was taken away from you. You believe it is a waste of your time as well as the time needed for LC to process the loan.

I think you didn’t understand my comment. Your actions of applying for other loans (you said you turned down other options during the week period of LC) when trying to finalize a Lending Club loan may have made you look too risky to be a borrower and that could be why you were then told you no longer qualified. When buying a house or refinancing a mortgage, the advice is always the same: don’t make any big purchases or open any credit lines during the process. It sets off red flags to the lender. I’m not sure if this is the reason you were rejected after you had been ‘approved’ unless LC confirms this, but I don’t think it helps.

I’m sorry you had a bad experience, and I hope you’re able to find another alternative for your loan.

MG (Lending Club lender)

You may want to consider that you seeking and rejecting other offers for loans “in the past few days” as you state made you seem like a bad risk and that’s why you were then disqualified. If you have a mortgage or have ever refinanced, this is the same reason why the bank always says not to make any large financial moves before the paperwork has been processed. It makes your financial situation look in turmoil.

MG

I have received an explanation as to the mix up. Mr Kinney (Risk) had phoned me about a week ago in order to verify some information.
When I returned his call the next day, his computer was on the blink and we agreed I would call him back. When I did, I received a voice mail, at which time I left a message. Later that day, I called again, could not get a hold of him, but did speak to another rep. Mr Kinney’s system had apparently listed me as contacted and he didn’t attempt to contact me any further. The problem, as it turns out, was that he was attempting to verify my company in MA where I live, instead of RI where the business is located. When he could not find a business registered there… I was delisted. Stuff happens… We have since relisted and I’ve sent doc’s and taxes etc.

One thing I would point out is that there doesn’t seem to be a method for allowing lenders any insight into what has happened. It just looks like a relisted loan that perhaps wasn’t funded for negative reasons… I went in and posted a question to myself, as a way to explain the problem.

Hopefully alls well that ends well and the initial 47 lenders were not put off too much.

Ed

I am sorry to hear your experience was not superb.

I have asked the customer service and credit teams to look into your case and get in contact with you to resolve any open issues asap.

In general, loans are only removed when the borrower cancels the loan listing OR when our credit team cancels it following additional credit review (insufficient proof of income, credit quality, inability to verify employment, etc).

We strive to address these issues with the borrowers but see ourselves forced to de list the loan to protect the investors when they are not.

We’ll be delighted to reinstate your loan request for investors to fund it if we can work out the open questions.

Thanks for the feedback

Rob G from Lending Club

I’m new here and just read this other comment from one of your other pages:
by Will — Jun 10th 2009 @ 12:26 pm
Lending Club Historical Repayment Rates

I don’t want to leave the borrowers experiences out of the conversation. They are afterall, a necessary component.

Ed’s experience is wierd… I ‘ve been trying to find anything that lending club has ever said about borrower’s employers or self employed criteria. I’ve found nothing. I also couldn’t find anything about what methods the’re using to verify info… are they relying on transunions info solely & blindly? That would be a mistake in my opinion. That has been a real bank problem in trying to lower underwriting costs. I thought we were attempting to lend differently. Databases should be used as initial guidance systems, not security blankets. But if he is correct, there isn’t any info about his company / employer on TU anyway? So, why don’t they explain what occurred? Ed’s situation can work against lenders. Everyone needs to trust in the integrity of their system.

Business owners information is easily verified, but it sounds like noone’s really checking other than whatever sloppiness they’re seeing on Transunion, or LC is just not as transparent as they claim.

How about checking bank statements company and personal, or corporate filings… Thanks Tom

After 13 days on the list of loans they pulled the listing. They sent an email stating that I was declined and that my “employer didn’t fit their criteria”…?? Anyone ever heard of that? 47 people had funded the loan to that point. Everything looked good and then from nowhere… My Employer??? I am SELF EMPLOYED in coffee retail and wholesale for 8 years. Sales up every year. I have good income and ten employees, We are in good standing, no debt… ? No explanation. I have seen other self employed folks and other employed folks, get loans with a lot less than my stable background. Credit was good, no delinquents… whats that about employer? There is no transunion info on my company, so I’m out without the heralded transparency.

By the way they stated that the listing expired on the web page. In fact they pulled it early. As a potential lender I wouldn’t mind knowing if they’ve got thier own arbitrary system and criteria for “employers”.

I thought they were into transparency. There’s nothing wrong with explaining to members that criteria for employers has to be A,B,C…They never contacted me, never verified info with me, and my company info is all verifiable on state corporate databases…income statements, banks…

Thanks for waiting 13 days, holding up 47 people’s money, just to get it wrong. My employer does in fact fit their criteria, I know him well.

Somethings wrong with this picture.

1) The current data (data, not funds) act like a ponzi scheme in that a constant stream of new loan originations dilutes the weight of a single defaulted loan. Prosper has shown that loan performance degrades over time (at the very least, most loans make a few payments before they go bad.) Given that Lending Club is younger than Prosper and has stricter lending requirements, it doesn’t surprise me that the returns are as high as they are. But I don’t expect them to be sustainable.

2) There are significant structural changes that have occurred at Prosper. Therefore, the “overall” rate reflects a state of Prosper that no longer exists. If one assumes the changes are for the better, then one can expect *better* than reported returns. In fact, Prosper has sometimes reported “data since Feb 2007″ when significant credit reporting changes were made. However, that also skews the age average age of the platform down (younger) meaning that it needs more time to mature.

3) You simply can’t cash out your returns so they really do exist only on paper. At least with my securities accounts, I can cash out my funds for whatever they’re worth at the end of the business day and stick them in a stable value fund.

The bottom line is that the P2P market has some maturing to do before we fully understand the eventual returns.

Oh, one other thing. I sort of think there’s some selection bias in here, because both platforms use a three-year repayment, making the monthly nut on a decent size loan pretty high for the average American household. (ie, small balances I would put on my credit card, but a $25k loan over three years amounts to $800/mo, which is more than I care to commit to.)

My only concern is the current economy and whether these high-risk loans are more and more prone to defaults. I’ve seen an increase on defaults in my Prosper account, and it seems the current sentiment out there is that it’s happening accross the board.

All part of the risk-reward game, of course…it may still be a great investment for a sufficient reward.