The marketplace lending giant's Financial Health Officer, Anuj Nayar, explores how it is aiming to promote more than just lending and borrowing.
I’m always eager for January to arrive. That’s easy for me to say from my office in San Francisco where we don’t suffer through snowstorms and blizzards all winter.
I look forward to January because it’s a proverbial clean slate—a chance to reflect on the highs and lows of the previous year and make plans for what I want to accomplish in the next 12 months.
Over the years, I have learned that if I don’t write down my goals and share them with a close friend or family member, they are almost guaranteed to go nowhere. And it’s not just me, studies have been done to prove the importance of sharing written goals with a trusted friend.
New Year, New You
The start of every new year brings loads of health and fitness advertising for discounted gym memberships, diet fads, and the like. Amidst this noise about improving your physical health, it can be easy to put your financial health on the back burner—especially when consumer debt spikes during the holidays.
Holiday season or not, LendingClub’s recent study found that 60% of Americans have revolving credit card debt and two-thirds of Americans have no consistent savings plan or have abandoned savings altogether. A recent CFSI study found 72% of Americans are considered financially unhealthy.
Data tells us this lack of financial control is less about having access to tools and resources, and more about a lack of motivation.
A New Kind of Club
Each day, more than 40,000 Americans come to LendingClub looking for help. That’s 15 million visitors per year. We primarily focus on consolidation loans to lower the burden of credit card debt.
That’s a good start, because credit card debt is among the least healthy forms of debt or, as we like to say, it is the “saturated fat” of debt. Along with consolidation loans, we offer the option to seamlessly pay down credit card debt as part of the borrowing process in exchange for a better rate.
Our joint application feature allows applications with a co-borrower and enables us to say “yes” to people who may have otherwise been declined.
Through our loan programs and committed partners, we have helped so many people transform unhealthy debt into healthy debt that provides a clear path to freedom from high-interest credit card debt and saves money while helping to build your credit.
So we’re already in the financial health business, and have been for more than 11 years. But our future will take us far beyond that into what we’re calling America’s Financial Health Club.
Because while escaping from unhealthy debt is a great first step, being financially healthy is about far more. A financially healthy life is a continuum, including spending, borrowing, saving, and planning. It is what you get when your day-to-day activities build resilience and put you on a path to success.
The Value of Membership
Our recent survey found that while most Americans want to improve their financial lives, doing so is mentally draining and therefore gets deferred.
What’s more, there is an element of secret shame around debt, especially when more of us are willing to share relationship issues than credit card debt concerns with each other. This type of shame is so common, and unique in comparison to, say, society’s expectations around weight and weight loss—aspects about ourselves that can be visually apparent. But a person can be financially unhealthy, and their family, friends, and social networks may be none-the-wiser.
To help combat these issues, we’ve built a Club membership to put you on a sustainable path to financial health.
The first step in joining is making a commitment. That can be taking the crucial first step to attacking high-interest credit card debt, or even just taking a good, honest look at your financial life starting with a financial health checkup. Because awareness is the first step to a healthy financial life.
Just as companies like Nike and Apple have partnered to optimise and digitise your fitness goals, we also partner with familiar names, like Intuit, so you can easily import your TurboTax data into your loan application to simplify the process. We also launched a pilot program with Credit Karma where you can see pre-approved offers from Lending Club and shop for credit with more certainty.
We’re all about providing the tools and encouragement to help our members build financial strength. And by strength, we mean credit. More than just that card in your pocket or that number on a report, we view credit as a muscle you can shape, strengthen, and flex when you need it.
Just like it takes willpower to get to the health club, it takes willpower and discipline to prioritise your financial health. So, while we can’t do all the work for you—any more than a health club can exercise for you—our mission is to support you every step of the way.
As a member, customers are joining a community of more than 2.5 million borrowers and our growing force of peer-to-peer investors, currently numbering more than 100,000, some of whom first came to us as borrowers.
By becoming LendingClub investors, they are promoting America’s financial health, even as they seek to further improve their own. We believe that with wise choices, your financial health can improve consistently throughout your life no matter where on the continuum you start.
Join AltFi at their fourth annual Australasia Summit to examine the future of lending in Australia. Where we present best practices across, technology, partnerships, open banking, governance, data access, consumer experience, capital markets & funding, the role of government and regulation.