Lending Club allows lenders to trade their investments
Lendingclub.com has introduced a secondary market for lenders. This is a major step, because one disadvantage for lenders in p2p lending was the lack of liquidity. Once the money was lend it was tied up (apart from repayments) until the end of the loan term (typically 36 months and more).
Through it’s secondary market - called Note Trading Platform Lendingclub allows lenders to offer their loans (or more precisely notes representing these loans) to other lenders.
Sellers list Notes that they would like to sell and enter an asking price. Buyers browse Notes that are available for sale, review payment history and the evolution of the borrower’s credit score, and buy Notes at the asking price. Buy orders received before 4pm Eastern time will generally settle same day, while buy orders received after 4pm Eastern time will settle next day.
Information about the Notes
Each listing contains the Note’s interest rate, issue date, outstanding principal, accrued interest, number of payments left, payment history to date, and the variation of the credit score of the underlying borrower since the issue date. Note, however, that the Notes are not “re-graded” over time, so you should not rely on grades assigned to Notes at the time they were issued to assess the current risk of a Note.
The Lending Club note trading platform is operated by FolioFn, a registered broker dealer. Foliofn charges to the seller a trading fee equal to 1% of the transaction amount. There is no fee charged to buyers.
Right now there are no notes offered for sale.
Tags: foliofn, Lendingclub, lendingclub.com, liquidity, note trading platform, notes, secondary market
October 15th, 2008 at 7:07 am
[...] day after the start of the secondary market (see: “Lending Club allows lenders to trade their investments“) of Lendingclub.com, today 3 loans are offered for sale. I doubt that these Lendingclub [...]
November 3rd, 2008 at 9:36 am
[...] this today. Someone using Lending Club’s new Note Trading Platform seems to speculated that a bulk buyer of notes might overlook the added zero in the [...]
December 22nd, 2008 at 9:36 am
[...] Veecus launces p2p microfinance; Lending club comes out of quiet period and introduces secondary market note trading platform; Prosper enters quiet period for SEC registration; Kiva wins grant; more than 685M US$ p2p lending [...]