Lending Club Blog

Lending Club Adds Liquidity to P2P Lending

Person-to-person lending has been a real phenomenon and has allowed both borrowers and lenders to get advantageous rates. The only real downside for lenders was a lack of liquidity, an issue that was recently addressed with Lending Club’s $600 Million SEC registration.

Traditional P2P lending models arranged for borrowers to repay lenders over a fixed term, typically 36 months. While lenders were getting above-average rates of return, some of their money was tied up in the process. Although they received regular payments on a monthly basis, they couldn’t get at their invested money. By establishing a secondary market for the notes bought and sold on Lending Club, everyone wins.

Lenders Needing Cash

Imagine you lent $500 across 20 notes averaging 10% interest today. You could expect to receive $16.13 every month for the next 36 months. What would happen later if you suddenly had an unexpected expense or an event caused your risk tolerance to change? You might wish you could cash out your monthly $16.13 for a lump sum payment at that time. Lending Club’s new features allow you to do just that. The price you can get will depend on market conditions.

Lenders Looking For New Notes

Lenders seeking new notes benefit in a number of ways. First, the number of notes available for funding will increase with a secondary market. You will be able to fund not just active new notes, but also those offered on the secondary market. New investment strategies can also be employed to seize profit opportunities by helping out people in need of cash who are trading their notes.


Liquidity for lenders can benefit borrowers as well. The risk of having to hold a note for 36 months is reduced for lenders who participate in the secondary market. Lower risk for lenders means they’ll be more willing to lend, and borrowers may be more likely to receive funding as a result.

By adding liquidity to P2P lending, Lending Club has positively affected all of their users. Borrowers are more likely to receive funding and lenders have increased options for new and existing tradable notes. I am excited about this new feature and encourage prospective lenders to check it out.

Wednesday, November 12th, 2008 at 6:29 am

Comments (2)

  1. Jane:

    As a new lending member to Lending Club and limited at this point
    to only being able to purchase notes on the trading platform, I
    have a question. It seems to me that all of the notes that I have
    seen listed far are all 36 month or new loans. I even see some that
    have an origination date of today. Aren’t there any that are older?
    Is there a distinction between loans made before the SEC
    registration and those made since then? Jane

    November 12th, 2008 at 10:15 am

  2. Scott Reynolds:

    Yep – only notes issued after October 12 (when the SEC registration
    became effective) can be sold on the Trading Platform.

    November 12th, 2008 at 11:01 am


Welcome Home

Lending Club named #5 on Forbes’ Most Promising Companies List

Get ready for tax season with Lending Club’s Tax Form Guide

New Adjusted Return Metric

See more
Lending Club Awards
  • Archives z

Recent Posts

A Message to Investors from our President and Acting CEO

Today, our President and acting… Read More »
May 19, 2016

Lending Club Receives Tribeca Disruptive Innovation Award

Disruptive innovation comes in many… Read More »
April 29, 2016

Lending Club Business Financing Review

One of the biggest challenges of owning a small… Read More »
April 27, 2016

Lending Club partners with Funding Circle and Prosper to launch Marketplace Lending Association

Read More »
April 7, 2016

Lending Club Welcomes Maryland and North Dakota Investors!

We’re now open to retail… Read More »
February 23, 2016

What is Lending Club?

More than one million Americans have achieved their financial… Read More »
February 16, 2016

Get ready for tax season! Lending Club Now Offering TurboTax Integration for Form 1099s

Read More »
February 12, 2016

Lending Club Success: Surpassing $16 Billion in Loans

Founded in 2007, Lending Club’s… Read More »
February 11, 2016

Credit Performance Update

Summary: Credit performance of our standard program is coming… Read More »
February 7, 2016

Critical Small Business Financing Issues

A recent Harris Poll survey conducted on behalf of… Read More »
December 17, 2015


We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014
View All w