Comments on: More on Lending Club’s Reduced Interest Rates

By: tom

tom — Fri, 26 Feb 2010 14:27:35 +0000

Is it just me or does the new lending club website look really tacky and cheaply thrown together? It’s more user friendly, but ugly.

By: Ben

Ben — Sat, 13 Feb 2010 04:16:13 +0000

I’ve recently opened a small lending club account to get my feet wet.. so far only 1/2 of my accounts have gone through payment status.. and 100% of them have been on tme.. I was actually quite pleased and surprised. .

I’ll keep my doubts in mind.. but hopefully it all works out..

Note.. I only have 25 notes.. 2 which were paid in full the first month..

By: Really?

Really? — Thu, 11 Feb 2010 02:10:50 +0000

Hmm, that’s sure sounds like “spin” – that the unsecured borrowers are defaulting less so LC decided to lower the rates. Doubtful. As others have said, it’s all supply and demand. There must be more lenders than borrowers so LC lowers the rates. Don’t forget, they make money off the quantity of loans.

And my test loan from last year, where the borrower stopped after two payments, is still “active”….

So maybe I’ve missed it, but show me the stat’s on delinquent loans as well as ones considered defaults, and show me how the rate of delinquencies is going down.

By: Vicky

Vicky — Wed, 10 Feb 2010 20:29:48 +0000

I took a look to see if this change would make it worthwhile to refinance my LendingClub loan, but really, unlike mortgage rates, half a percentage point doesn’t make a big difference: in my case about 74 cents per month.

By: SkiSpeaks

SkiSpeaks — Wed, 10 Feb 2010 18:24:30 +0000

@Wesley, don’t forget that lower rate will also reduce the number of people willing to lend.

@Nickel, I recently started lending on Lending Club (though I had experience with Prosper) and one of the things I look for is a reasonable monthly payment on the loan. Lower interest rates mean lower payments for the borrower, so they’re more likely to pay up. Of course, this isn’t my only criterion but I think it helps.

By: Wesley Barnett

Wesley Barnett — Tue, 09 Feb 2010 19:03:04 +0000

Well, they has stated that they had more investor dollars than borrowers needed, so the correct answer to that “problem” was to reduce rates, hopefully bringing in more borrowers.

Simple supply/demand!