Lending Club® Launches on Facebook® Platform

May 24, 2007

Person-to-person lending application becomes first collaborative financial service to launch on a leading social network.

SAN FRANCISCO – Facebook f8 Event, May 24, 2007 – Lending Club announced today the launch of its collaborative, person-to-person lending service on the Facebook Platform. The service helps Facebook users borrow and lend money directly among each other, bypass the banks, and get better rates. By working together, Facebook users can borrow money more easily and at a better rate than they would get from a bank, or invest in loans at higher rates than those served by savings or money market accounts.

“Person-to-person lending helps both lenders and borrowers get better rates,” said Renaud Laplanche, Founder and CEO of Lending Club. “Banks support an expensive branch network and incur high costs to collect deposits from the public on one side and extend loans on the other side; Lending Club provides a shortcut.”

Using Lending Club, individual borrowers can apply for personal loans of $1,000 to $25,000 that get funded by one or more individual lenders. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers and collections.

Lending Club’s proprietary technology called LendingMatch™ helps lenders identify loans based on pre-set criteria such as being Facebook friends, or being in the same network, group or geography. LendingMatch™ then presents lenders with a diversified loan portfolio (composed of ten to thirty borrowers) reflecting these relationships as well as the lenders’ individual risk preferences.

“Person-to-person lending will gain broad adoption faster in an environment where people feel connected to each other,” said Laplanche. “Facebook is the perfect launch platform, with 24 million active users who communicate and share information through the social graph, or the network of connections and relationships between people.”

Facebook is the sixth-most trafficked website in the United States. More than 50 percent of Facebook users return to the site each day.

“Facebook Platform creates an ecosystem for developers to build applications that deeply integrate into Facebook and use its social graph,” said Mark Zuckerberg, Founder and CEO of Facebook. “By enabling developers to make applications within Facebook, we’re working together to create a better utility for millions of people.”

In addition to helping borrowers get better rates, Lending Club offers a more responsible method of borrowing. Instead of giving unsuspecting borrowers a revolving credit line with variable rates, Lending Club offers stability by facilitating fixed rate installment loans with no hidden charges or fees.

In an effort to protect its community and encourage responsible borrowing, Lending Club is available only to borrowers with credit scores at or above 640. Although Lending Club is exploring offerings for borrowers with lower credit scores, the company does not participate in sub-prime lending.

Lending Club generates revenue by collecting a one-time processing fee of 0.75% to 2% of the loan amount from borrowers and a processing fee of 1% of the installment amounts from lenders.

How much do you need?

$
Enter up to $40,000

To Read Next

4 min read

Your Essential Year-End Financial Checklist

Before you let the holidays take over completely, we’ve put together an essential year-end financial checklist to help you…

READ MORE
4 min read

What A (Trade) War Footing Might Mean for Marketplace Loans

The U.S.’ ongoing trade war with China has become more than background noise for investors and corporations. To recap…

READ MORE
4 min read

How to Opt Out of Black Friday Spending

If it seems like Black Friday promotions are suddenly everywhere, that’s because they are. Commercials and ads constantly push…

READ MORE