Tired of Dealing With the Banks for a Loan?

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Aug. 29 (Bloomberg) –- On today’s “Reganomix,” Lending Club CEO Renaud Laplanche discusses the potential of peer-to-peer loans and how to build a diversified lending portfolio. He speaks with Trish Regan and Adam Johnson on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

It has facilitated $173 million in loans.

The ceo, renaud laplanche, joins us now.

9.5% you can make by lending money to someone?

It is a marketplace with borrowers on one side and investors on the other.

We underwrite and we make an effort to borrowers and they can decide to take the offer or not.

If they do take it, investors can invest in these loans and the interest generated by them.

If i were trying to make a loan to adamant he had a really high credit score and i was trying-- a loan to adam and he had a high credit score, i i assume i would get the interest rate on the person with the lower interest and credit score?

That's right.

We have a risk-based pricing.

We depend on the risk factors.

It's really important to diversify.

You may want to diversify tens of hundreds of thousands of loans will make it there easy for investor to do so as low as $25 per each loan.

It would have a small impact on the others.

What is the average loan size?

$13,000 mostly by consumers with it in, andcome to pay off credit card debt which is very high in the 19% range and they want to get out of credit card debt and get their finances in order to refinance at the lowest rate.

Who do you see as your primary competition?

Credit card issuers.

A lot of consumers get a credit card thinking they will use it and they end up carrying a balance over and get hit i really high interest rates.

We are helping consumers understand that riddick cards are good payment instruments -- that credit cards are very good payment instruments.

You have some very good backing, john mack is on your board.

Larry summers is now being talked about as a potential candidate to take over from ben bernanke.

Certainly some very strong names behind you.

Are you running into issues where people are reluctant to borrow on your website because they just don't understand it or people are in to maybe finance these loans.

They are used to getting a bank loan.

It is very disrupt his.

-- it is very disruptive.

Mostly our customers, we now generate $175 million up to $200 million per month so there is an dave -- there is an introductory curve.

It's very different from what people are used to.

When we started six years ago, we started very slowly.

Now the curve is now coming in and there is so much satisfaction from existing investors and borrowers that the word is getting out and people are growing very quickly.

Banks have to answer to a whole host of regulators.

Who do you answer to?

The investor side is regulated by the sec.

There is a public offering of securities major retail investors every day and the risk that investors should be aware of.

And on the borrowers side, we have issuing bank partners for regulators.

What is the default rate like?

Are you seeing many people not paying back their loans?

They have been pretty protectable.

The service is not a way for people who could not get a loan from a bank to get one from us.

It is more for mainstream consumers to get something better.

This text has been automatically generated. It may not be 100% accurate.


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