Last week, Lending Club unveiled its new financial offering, 5-year Notes, to our fast-growing financial network, rapidly capturing the attention and interest of investors. These represent 60-month loans made to creditworthy borrowers under the same stringent credit policy that has made our site an attractive investment.
In today's webcast, we have invited our own Rob Garcia, Sr. Director of Product Strategy, to share with us more about 5-year Notes and their benefits to investors:
More investment options,
Greater control, and
The opportunity to earn more interest while diversifying across terms.
Rob will also provide a quick introduction on how peer investing works, an update on Lending Club's growth and performance, and an overview of investor tools. You'll have the chance to ask questions online and learn about new Lending Club developments. This WebCast is offered at no cost to Lending Club Investors.
Earlier this week, ABC KABC-TV in Los Angeles, CA, aired this news story featuring a Lending Club borrower who took a personal loan to pay off her credit card debt and saved money in the process. They also interviewed one of our investors who has built a diversified portfolio, lending no more than $100 at a time, across more than 200 loans.
Ric Romero, a consumer specialist and reporter for ABC started the segment with: "If you're looking to borrow money to pay off bills or buy a new vehicle, you don't have to apply for a loan at a bank or credit union. Many people are asking and getting loans from strangers, and saving a ton of money"... read the whole story here.
As of this morning, Lending Club now offers 5-year personal loans to our growing financial network of investors and borrowers, in addition to our existing 3-year personal loans.
Borrowers can enjoy the benefits of a lower monthly payment, making budgeting and loan repayment easier.
Investors can now earn more interest by choosing 5-year Notes and receive 0.74% extra yield on B graded Notes and 1.86% extra yield on C through G graded Notes*, as compared to 3-year Notes. Investors also benefit from a lower annual impact of the service charge on their return: 0.45% on a 5-year Note vs. 0.71% on a 3-year Note on average.
We are thrilled to expand on our product offering that enables our borrowers to get great rates while investors earn better returns.
The S&P 500 has gained 36.96% over the last 12 months, bringing some much-needed comfort to investors. The loyalty of the buy-and-hold investor, however, has not been rewarded. As of April 30, 2010, the S&P 500 returned only 2.63% over the past 5 years, and showed a pitiful -0.19% over the last 10 years (including the recent big run-up).
On May 3, 2010 Barron's stated:
"Certain top investment strategists are telling clients that this year, 'Sell in May and go away' is an even better idea than usual."
Now may be the time to consider going away from the equity markets and diversifying your portfolio into alternative asset classes. Lending Club's net annualized return of over 9.5%* has shown to be an alternative investment option with less volatility and more consistent returns. To date, Lending Club Notes have a beta of nearly zero (-0.00104) when measured against the S&P 500.
This morning most news media outlets reported their reactions to remarks made earlier by Federal Reserve Chairman Ben Bernanke at a bankers conference in Chicago. Although reporters do not seem to agree on what it all means, two clear statements about bank lending came out of it:
Credit remains tight and banks are still not lending to sound borrowers.
Bank lending continues to shrink despite massive government efforts.
Perhaps Bernanke does not know yet about Lending Club, but the exact opposite is happening here: first, Lending Club rates are designed to reward creditworthy borrowers with better rates on personal loans; and second, our volume continues to grow at a 5-10% rate every single month to date: in April alone, Lending Club issued more than $9.5 mm in loans.
Here is a round-up of media coverage of Bernanke's remarks so you can make your own assessment:
"As an accountant, I am very conservative about money. My daughter's credit card jumped her interest rate... I found Lending Club and got a loan to pay off her credit card."
Upcoming WebCast: Introducing 5-year Notes
This morning most news media outlets reported their reactions to remarks made earlier by Federal Reserve Chairman Ben Bernanke at a bankers conference in Chicago. Although reporters do not seem to agree on what it all means, two clear statements about bank lending came out of it:
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