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Signing up with Lending Club is a simple process. Here is a quick 6-step guide:

1. If you are not a member already, please take a minute or two to join Facebook (https://register.facebook.com/r.php). If you have not already done so, make sure to add yourself to appropriate networks, including alma mater, company, and regional networks using the Network tab in Facebook or using this link directly: (http://www.facebook.com/editaccount.php?network)

2. Now that you are registered and a member of one or more networks, it is time to add the Lending Club application. For simplicity, go directly to the Facebook Lending Club application using this link: http://www.facebook.com/apps/application.php?id=2360494761

3. Click on the “Add Application” button on the upper right side of your browser window

4. Add Lending Club to your Facebook account by clicking on the “Add Lending Club” button on the bottom of this screen

5. Now that you have the Lending Club application installed on your Facebook profile, you can click on it to get to this page (http://apps.facebook.com/lending-club/)

6. From there, click on either the “Borrow” or the “Lend” button to borrow or lend money with Lending Club.

We are actively monitoring all your comments, concerns, and questions you post. Our team has noticed there seems to be a more active pursuit of lending money. This makes us here at Lending Club quite happy. Thirty One loans out of the gate currently after only less then a week online is a great start for a new company.

The other item that really makes our assessment to go live with Facebook f8 launch is the fact that all we are saying so far is coming true. Where else could you observe a group of people that has pitched in more money to loan their friends and associates? This comes as not a big surprise, as we chose this method of going “live” on a solid platform user base. We saw Facebook as opportunity, and the future has spoken.

What are they saying? We are hearing that everyone (that is capable) desires to be a banker. It is not only being a banker that is compelling to them, but they want to pitch in their money to be of assistance to others. This is building a stronger community piece by piece. Lending Club encourages and is pleased to see such an out pouring of social networking spirit. The community is what is going to dictate our next steps.

We have a strategy in place, but we are listening to the “bankers” and the “clientele” that are out there. It’s been too many years now where you didn’t have a choice on how to allocate where your money goes. Now you have an alternative via Facebook.

We're not the bank, you are. At Lending Club, we get the banks out of the way and let you be the lender. That makes you the bank. Congrats!

To find out more, please refer to the page: How It Works.

Lending Club is really very different from a bank. Financial comparisons between Lending Club’s operating model and bank’s models are tough. Comparing us to a bank as a whole is meaningless– banks have such a diversified mix of business that there is very little use in overall comparables – it would be like comparing us to a car company. This is interesting, but not useful. Instead of an entire bank, we find it useful to use a line of business within a bank as the basis for comparison. A line of business is something like a credit card division or a consumer lending division. They typically have one or more related products.

If you can see them, financial results from banks’ line of business areas often look better than reality because SG&A (Selling, General & Administrative) costs are not explicitly allocated to them on their internal income statements – the SG&A is of course generally applied to the bank wide results for financial accounting. These SG&A costs include the cost of the branch leases, the salaries of the bankers and tellers and management, and other expenses incurred in the operation of the bank. When a proportionate amount of SG&A is added back into the income statements for the lines of business, then the comparisons become much more meaningful.

Financial analysts use a bevy of ratios and metrics to measure banks’ financial performance. Here is how banks are supposed to make money:

ROA:
1. Return On Assets – a measure of how well banks use the assets on their balance sheets.
2. Lending Club has no performing asset base, so comparing us to banks is unfair – we have nearly infinite ROA

ROE:
1. Return On Equity – a measure of how well banks use the equity on their balance sheets.
2. ROE is very positively skewed for Lending Club given the current valuation of the shares (ours measures out to be well over 100%)

Yield:
1. In credit businesses, Yield is used to measure the return on the outstanding debt portfolio (whether that is loans, credit cards, or whatever).
2. Either: (1) our Yield is 0% because we do not charge interest, or (2) If we assume all of our revenue is interest income (ask the accountants), then the yield is slightly lower than banks – we charge a LOT less than they do

Losses:
1. In credit businesses, Losses measure the % or $ of the lending portfolio that has gone bad and cannot be collected
2. Lending Club has no financial exposure to losses – we use industry standard vendors to assist our lenders in pursuing any loans that go into collections.

Cost of Funds:
1. In credit businesses, this is the cost of capital for the lender.
2. Lending Club has no cost of funds because we are not lending our money.

Spread:
1. Spread = (Yield – Losses – cost of funds)
2. Lending club’s spread is either 0% (0 – 0 – 0) = 0, or it is high because we have no losses and no cost of capital

If those measures do not apply to Lending Club, then how do we make money?
• We charge an origination fee to defray the costs of processing loans
• We charge a servicing fee to defray the costs of servicing loans

That’s it. It is that simple.

Patrick of Lending Club

Privacy is something that everyone wants, but we all know that privacy is how you employ your security measures. We talked about security by using a bit of humor, but we do take it very seriously. Privacy and security go hand in hand, but let’s take the time to go over how we protect your privacy.

From the very beginning of starting the process with Lending Club you will be logging into a SSL (secure sockets layer) server. This uses 128-bit encryption which banks use. According to this article on 40-bit encryption vs. 128-bit encryption, the standard should be good for internet browser security for at least another 10 years. We will of course keep an eye on this, and make sure we are up to date on security issues. This all goes hand in hand with keeping your data and your privacy all private.

Safeguarding your personal information and privacy is of the utmost importance to us. Borrowers and lenders remain anonymous on the site and are identified only by their chosen screen names. Lending Club employs strict procedures for protecting the financial data and other sensitive information we collect from members.

As a borrower, you can share as much or as little information about yourself as you deem necessary to secure funding. Regarding the information we do request, we always tell you which information is required and which information is optional, which information will be displayed publicly on the site and which will remain private. There are no guessing games, and there is no fine print. When information is displayed publicly, it is only tied in to your screen name and not your actual identity, unless yourself decide to make your identity publicly available (by choosing your full name as a screen name for example).

Lending Club will never sell, rent or otherwise distribute your information to other parties for marketing purposes. We only share information about you to credit bureaus for the purpose of obtaining your credit file and reporting payments back to the bureaus and, when necessary, collection agencies.. Read more about privacy here: privacy policy.

What is DTI? Is it the Department of Trade and Industry? No. What about Diffusion Tensor Imaging? Nope. It’s none of these. When it comes to Lending Club, DTI stands for Debt-to-Income ratio. This goes for the entire lending business. DTI is something that must be taken into account when making loans.

So what exactly is Debt-to-Income ratio? It is the percentage of a consumer's monthly gross income that goes toward paying debts (excluding household debt). When DTI is displayed, it’s usually listed as a percentage, such as 8%: it means that 8% of the consumer’s monthly gross income goes toward paying debts. In general, a consumer with a DTI above 20% would be carrying a high debt load (relative to their income) while a consumer with a DTI below 10% would be carrying a relatively low debt load.

Lending Club uses DTI as part of its “risk modifiers” that help calculate a “loan grade” ranging from A1 to G5. The loan grade is mostly based on a consumer’s FICO score, but is modified to take into account the DTI and the loan amount. For example a Lending Club borrower with a 710 FICO score starts with a B1 loan grade. If that borrower has a 5% DTI, their loan grade will remain a B1. If they have a 15% DTI, their loan grade will become a B4, and they would pay a slightly higher interest rate as a result.

We do the best we can for our customers, borrowers and lenders. To read more about DTI please go right here.