Lending Club Blog

More Information About Our “Verified Income” Filter

Recently we’ve been hearing from investors who tell us they’re finding it difficult to find income verified loans on our platform. This has led some to wonder whether loan originations have slowed at Lending Club or whether we’ve changed our standards for income verification.

In fact, neither is the case. Loan issuances are at historic highs: in April 2013 $140,118,275 in loans were facilitated through the Lending Club platform, up nearly 10% from March 2013 and our highest monthly loan issuance ever. In addition we haven’t changed our standards for verifying income; we continue to conduct income verification on over 60% of loans.

So why does it seem like there are “fewer” income verified loans on the platform?

This perception is simply due to extremely high investor demand causing loans to receive 100% investor funding before the borrower income verification process is complete. When a loan receives 100% funding, we remove the listing from the platform. Lending Club is still verifying income prior to issuing a loan – however, the loan is just no longer visible on our platform since it’s reached 100% funding from investors.

By analyzing our historical Download Loan Data file you’ll better understand how income verified loans perform compared to non-income verified loans, as well as gain more insight into what loan factors matter the most.

Please feel free to reach out to us if you have any additional questions, and thank you very much for your understanding and patience as Lending Club grows to meet both investor and borrower demand.

Friday, May 17th, 2013 at 2:45 pm

Comments (6)

  1. tim white:

    “we continue to conduct income verification on over 60% of loans.”
    Why only 60% of loans and not 100%? thanks tim white

    May 20th, 2013 at 2:13 am

  2. That would make perfect sense: if you are removing listings when
    they are fully subscribed, and they are being subscribed quickly,
    it would create an artificial appearance of there being less loans
    being listed. It’s interesting that demand is so high; I suspect
    with inflation being so high, banks giving a pitiful return on
    savings, and gold nose diving, this type of investment is one of
    the best going.

    May 20th, 2013 at 11:07 am

  3. Matt Campbell:

    After perusing the Loan Data file, it is astonishing the proportion
    of borrowers that are seeking to consolidate credit card-related
    debt. I wonder which category is more afraid of a flourish P2P
    consumer finance industry – credit cards or banks?

    May 23rd, 2013 at 8:58 pm

  4. Birthday SMS:

    The only problem is the understanding of policy. The anxiety of
    investors is quite understandable. By not finding the income
    verified loans one is justified in believing in the slowness of
    process of lending. However, the explanation seems to be quite
    rationale and when a loan is fully subscribed, there is no need to
    list the same. Nothing of the sort of any artificial appearance of
    less loans. The faithful funding activity certainly adds to the
    faith of investors and the client. However, on a special request
    the fully detail availability is also not so inconvenient. I think
    the Lending Club is doing well and the explanation offered is quite
    satisfactory.

    May 26th, 2013 at 4:53 pm

  5. Yair:

    is lending club planning to reduce interest rates to attract more
    borrowers? seems like the right thing to do when the market is not
    balanced (more buyers than sellers).

    May 27th, 2013 at 7:09 pm

  6. jerry bellarmino:

    I agree with Tim (above), “Why only 60% income verified”, when
    income is the primary basis for loan repayment? Further, I looked
    at the downloaded data and it seems to me that only about 34% of
    loans had income verified!

    May 28th, 2013 at 1:33 pm

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