LendingTree (ticker: TREE) and LendingClub (ticker: LC) have come across my radar as they are growing quite rapidly with what seems to be a good business model – they’re online marketplaces for P to P loans.

However, I will say that I am skeptical, as I have a friend who got one such loan via LendingClub for roughly $15,000, and her interest rate is something like 14%, which to me seems almost usurious.

Before I delve any further, I was just wondering if these companies have been discussed previously, or if anyone has any info on them at the ready.


Hi Bear

I participate in LC as an investor and have had really excellent returns over the past year. Be cautious in your understanding of the interest rates charged. Typically, in fact in the vast majority of cases, LC loans are made to people who are restructuring old loans or who are paying off credit card debt. In such cases they universally receive lower interest rates. If you do any research you will find that the rate you mention was generally for a C class loan. Categories with higher rates are D, E, F and G with some rates exceeding 24%.


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