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Lending Club (NYSE: LC) going strong

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It is a known fact that borrowing money or in other words taking a loan from banks is not an easy task. There is a lot of paper work involved and not only that, there is still no guarantee that the person is eligible for a loan or whether he/she will result in a fraud.  After the economic crises, the banks have further tightened their screws on borrowers. Amidst all this a company has risen and at the moment has given out loads worth 3 billion during this year. The company is named Lending Club (NYSE: LC).

Lending Club (NYSE: LC) went public last month and since its listing has been a ragging success on at the New York Stock Exchange (NYSE) with an increase of 66% in just a few days. Lending Club (NYSE: LC) is based on an innovative idea that provides a platform for investors to lend money to people with the help of a bank. The peer to peer landing service seems to be the talk of the town these days.

Lending Club (NYSE: LC) has no hidden costs and provide easy loan solutions to its users. Currently Lending Club (NYSE: LC) is the market leader when it comes to peer to peer lending and at the moment has a market share of about 40%. Its closest competitor has a market share of 8%.

Lending Club (NYSE: LC) makes money from every transaction made. It charges a very nominal transaction fee on every transaction. Majority of the Lending Club (NYSE: LC) money is made from the origination fee. In fact it accounts to 88% of the revenue generated by Lending Club (NYSE: LC).

A number of people believe that people who are rejected by banks decide to seek loans from companies like Lending Club (NYSE: LC). However, this is a gross misconception. According to recent surveys and reviews, majority of the customers of Lending Club (NYSE: LC) are looking for a better rate. The bank charges are way more than that of Lending Club (NYSE: LC) and when there are better options in the market, it is always better to go for the best option available. Lending Club (NYSE: LC) was also rated 4 out of 5 on an online survey that had 1,398 reviews.

On an average, a borrower on Lending Club (NYSE: LC) has a credit score of 699, 15.8 years of credit history and a 16.9% debt to equity ratio. Lending Club (NYSE: LC) also maintains quality by approving only 10% of the applications after properly analyzing them.

Lending Club (NYSE: LC) accounts for only 0.09% of the total consumer outstanding debt of USA. This means that still there is so much potential for companies like Lending Club (NYSE: LC) and with every passing month, their business will only increase.

Lending Club (NYSE: LC) in future has the potential to become the largest company providing loans to individuals. It seems as if we are all going to witness a new revelation in loan industry and banks will have a tough time competing.

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