Lending Club Debuts Five Year Notes

May 13, 2010

Lending Club has announced the creation of five year notes, adding a longer term peer to peer loan alternative that offers lower payments for borrowers and higher interest rates for lenders.

Borrowers can now select between three year or five year term loans when borrowing, enabling them to further slash the monthly payments they make.  This should make the Company’s debt consolidation and small business loan products even more attractive to new borrowers.

Investors look to be well compensated for the increased risk that is inherent in longer term notes.  Notes from borrowers with mid-range credit will yield an incremental 74 basis points, while lower quality notes will have their yield enhanced by 1.86%.  Lending Club’s service charge on five year notes is reduced by 26 basis points as well.

Both 36 and 60 month notes can be sold in Lending Club’s secondary market partnership with FolioFN.  No word yet on whether close competitor Prosper.com intends to match the option to originate a longer term note.

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