Coolest Brands 2015: Lending Club
Peerless
Among peer-to-peer lenders, Lending Club has no peer.
Renaud Laplanche launched Lending Club in 2006 when he noticed the disparity between the interest he was paid on his savings account and what he was charged on his credit card. His company, now publicly traded under the ticker symbol LC, offers investors strong returns on their money in today’s interest-starved environment, and simultaneously provides funding to customers banks can’t or won’t fund.
Lending is, of course, a core competency of banks, so it might be understandable if the rise of Lending Club has banks a bit spooked. Generally, borrowers get money more quickly from Lending Club, see their terms and conditions more transparently, and can do the entire process online. Lending Club is not cheaper than banks — it charges borrowers higher rates, and its advanced tech stack allows it operate more efficiently and provide a better experience The kicker is that many of its borrowers would be refused bank loans anyway.
Today, it is the banks that are coming knocking to buy loans through Lending Club’s platform. The company now has a whole department devoted to working with FIs.
The term “peer-to-peer lending” has actually fallen out of fashion lately in favor of “marketplace lending.” This is because investors in Lending Club and the like are increasingly institutions such as hedge funds or mutual funds — not exactly “peers” of the average borrower consolidating his credit card debt. Who came up with the term “marketplace lending?” Renaud Laplanche tossed it out last year, naturally, on stage at an industry conference. Even in phraseology, Lending Club appears peerless.
