Personal Loan Performance Drives Lending Club to Decrease Starting APR to 6.78% - Nearly Half the Average Starting Credit Card APR of 13.15% Available to Similar Borrowers

Oct 19, 2010, 09:00 ET from Lending Club

REDWOOD CITY, Calif., Oct. 19 /PRNewswire/ -- Today, Lending Club (, the world's leading platform for investing in personal loans, announced that interest rates for all new borrowers will be reduced. The starting Annual Percentage Rate (APR) for Lending Club borrowers will be reduced from 7.93 % to 6.78 % for 36-month term loans(1).  

The rate decrease reflects the underlying credit quality of the borrowers getting personal loans of up to $25,000 at to do things like refinance their debt, make major purchases, cover medical expenses or re-invest in their small business. The new starting APR of 6.78 % on 36-month term loans at is nearly half the average starting APR of 13.15% offered on credit cards to similar borrowers(2).

"Interest rates on credit cards have reached a nine-year high, while overall interest rates on everything from mortgages to treasuries are at all-time record lows," said Renaud Laplanche, Chief Executive Officer of Lending Club. "The new rates reflect the marketplace dynamic, the excellent performance of loans to date, and our desire to pass the savings directly on to credit-worthy consumers."

Laplanche continued, "By reducing APRs on all unsecured personal loans, we're providing better value for new borrowers and satisfying investor demand for high-quality consumer debt."  

Here is how Lending Club works:

  • Prime borrowers come to Lending Club searching for low personal loan rates on loans up to $25,000.
  • Applications are reviewed and approved based upon bank underwriting criteria. Lending Club assigns a borrower's grade, interest rate and APR. Once a loan is assigned a grade based upon the credit policy, the loans are listed on the website as available for investor funding.
  • Investors indirectly fund small fractions of hundreds of these loan requests.
  • As consumers pay back the loans, investors collect the principal and interest and they have the option to reinvest their returns.

Additional Information

(1) 36 month loan of $1,000 to the highest rated borrower (Grade A1), $20 origination fee, 5.42% interest rate, $980 net proceeds, 36 payments of $30.16 at a 6.78% APR.  Actual APR depends upon credit score, loan amount, loan term, and credit usage & history.

(2) Source for average starting credit card APR for consumers with "Good to Excellent Credit" calculated using headline rates on Credit Cards offered to borrowers with "Good to Excellent Credit" at as of 9/30/10

About Lending Club

Lending Club is an online platform that enables the issuance of and investment in consumer loans.  Lending Club brings together investors and creditworthy borrowers -- eliminating the cost and complexity of traditional bank lending -- to offer borrowers better rates and investors better returns.  Lending Club was recently recognized as one of the 20 "Breakthrough Ideas for 2009" by Harvard Business Review, has been nominated for "Top 100 Innovators" by The Industry Standard, is on the JMP Hot 100 list, and the Always On Global 250 Top Private Companies list.  In addition Lending Club won the Webby Award in 2008 for the "Best Banking Website". Founded in 2006, Lending Club is headquartered in Redwood City, CA. More information is available at:

Loans are not issued in IA, ID, IN, ME, MS, NC, ND, NE, or TN. Loans are issued by WebBank, an FDIC insured Utah chartered industrial bank located in Salt Lake City, Utah. Borrowers must be US citizens or permanent residents and at least 18 years old. Valid bank account and social security numbers are required. All loans are subject to credit approval.

Additional information about Lending Club is available in the prospectus for Lending Club's notes, which can be obtained on Lending Club's website at

SOURCE Lending Club