MENU

Marketplace Lending in a Rising Rate Environment

December 5, 2018

In this issue of Marketplace Insights, we focus on potential impacts to marketplace loans in a rising interest rate environment.

The Impact of Rising Rates

As interest rates march steadily higher, investors are asking how marketplace loans might perform in a different rate environment. Because marketplace loans’ risk and return dynamics are different from those of more traditional fixed income assets, they can offer investors benefits in various environments. This is due to factors including:

  • Differentiation. Marketplace loans’ returns tend to be more affected by credit-specific factors and broader trends in consumer credit health, specifically, unemployment rates and recessions, than by prevailing interest rates.
  • Demand. Marketplace loans are an attractive alternative for borrowers in a variety of rate environments, given the generally higher rates on other consumer credit products.

Read the full Marketplace Insights piece here.

You May Also Like

Investing

December 2020 LendingClub Platform Update

As 2020 comes to a close and we look forward to the promise of a New Year, we also…

Read More
Investing

Q3 2020: Quarterly Investor Update

We remain committed to helping both sides of our marketplace navigate the current environment and have been providing frequent…

Read More
Investing

Investor Update: September 2020

We remain committed to helping both sides of our marketplace navigate the current environment, and have been providing frequent…

Read More
Change Your Money, Change Your Life
Join our monthly newsletter for tools, tips, and insights to improve your financial health.