Base rate increases by 25 bps on Monday, January 21

Posted by Renaud Laplanche :: January 21, 2008 @ 8:40 pm

Free markets are characterized by prices that vary as a function of supply and demand, and Lending Club is no exception. Demand for loans within the Lending Club community has increased 3-fold in the last 30 days, soaring from 100 active listings in December to 300 active listings today. All loan requests are posted by members with at least a 640 FICO score, less than 30% debt-to-income ratio and no current delinquency.

As a result of the surge in loan requests, we are increasing the base rate today by another 25 bps, less than a month after the 50 bps announced on December 24. The Lending Club base rate increases by 25 bps across all loans grades, and rates now vary from 7.37% to 18.61%. See this page for more details on how we set interest rates, based on the risks associated with any given loan: http://www.lendingclub.com/info/how-we-set-interest-rates.action.

All Lending Club loans are fixed-rate, so the rate hike will only apply to new loan listings. As we continue to collect more data and refine our model, the rate-setting mechanism will become automatic, based on real-time supply and demand.

Better rates. Together.