LendingClub.com Tighten Their Reins

LendingClub.com announced today that they will be raising interest rates, processing fee, and the minimum fico score requirement for borrowers.  

-Interest rates will be raised by .75%  ranging from 6.69% – 19.37%.

-Processing Fee will be raised by .75% for borrowers.

-Minimum fico score for borrowers is now 660. 

This change will not effect lenders and only create larger returns on the investment. Here’s the original announcement:

“Hope all is well.  There are a few changes becoming effective today that matter to you as a lender:

Minimum FICO score raised to 660

As the economy continues to slow down and create additional risks in the lower FICO bands, we are tightening our credit policy.  To ensure a higher quality of loan applications is available to you as a lender, we are raising the minimum FICO score to 660. Simultaneously, we are increasing our marketing spend on qualified lead generation channels to ensure a sustained flow of borrower applications with no decrease in the quantity of applications available on the site.

Interest rate increase by 0.75%, taking the average rate to 13.80%

In response to the same market conditions, we have increased our base rate by 0.75% for all grades other than A, by 0.25% for A4 and A5 grades and left it unchanged for A1-A3 loans. Interest rates, after deducting our service charge of 1%, now vary from 6.69% to 19.37% with an average of 13.80%. 

Note that we are also increasing the processing fees charged to borrowers by an average of 0.75%. The additional revenue will fuel continued investments in Website development, collections and loan servicing, and general operations.” LendingClub.com

E.M