This new product is aimed at filling the demand for shorter, smaller sized term loans. This will provide a two year AA term loan for $10,000 or less (the minimum is $1000). It has a starting interest rate of 3.99% (4.97% APR). Lending Club has also launched a three or seven year AA term loan for $10,000 up to $50,000 with starting interest rates of 4.99% or 5.38% (5.70% APR or 5.99% APR). These loans are aimed at borrowers who need the money for larger projects, such as energy efficiency upgrades.
Renaud Laplanche, Lending Club's founder and CEO, commented:
"Our goal is to become more useful to more people over time, and expanding the parameters of our marketplace's core product to make it more appealing to the very top end of the credit spectrum allows us to do exactly that. Our marketplace model allows us to offer a wide range of loan products to borrowers at affordable rates."
Last week Lending Club launched a new product covering funding for early education and elective medical procedures. It will provide this service through its Spingstone subsidiary, which it acquired earlier this year. It offers interest free financing for a period of six, twelve, eighteen or twenty-four months, depending on the plan offered by the healthcare provider. The borrower is encouraged to pay off the loan within the promotional period but if they don’t repay in full during this period then interest is charged on the outstanding balance from that point forward.
Renaud Laplanche explained:
"We're really excited about this product launch. We were able to leverage Lending Club's resources and market insights to create a better more consumer-friendly product. Many consumer advocacy groups and the Consumer Financial Protection Bureau have raised questions about deferred-interest products in patient financing and we're proud to lead the way in delivering a more consumer-friendly alternative that we believe provides enhanced transparency for borrowers.”
These new product launches come while the spotlight is on Lending Club ahead of its much anticipated IPO. There have been rumours swirling that Lending Club is also considering selling to a private buyer. The valuation of the company is expected to be at around $5 billion. Since its launch in 2007 the platform has facilitated over $6 billion in loans, including nearly $1.2 billion in the third quarter in 2014.