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Peer to Peer Lending News Roundup – October 25, 2014

by Peter Renton on October 25, 2014

During the week I share the latest p2p lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here.

This was one of the busiest weeks of p2p lending news for quite some time. We had the Lending Club, Orchard and CommonBond news that I covered earlier this week. In addition to that we had the announcement that the former CEO of Pimco, Mohamed El-Erian, has invested n a new p2p lending startup called Payoff (yet to launch); one of the UK’s largest banks is starting a p2p lending platform and a new partnership was announced between Funding Circle and PwC.

Mohamed El-Erian backs peer-to-peer lender Payoff from the Financial Times – Tracy Alloway gives us another important scoop for the industry.

Royal Bank of Scotland to enter P2P lending market from the Financial Times – RBS is the first major bank to take on the p2p lending platforms directly.

PWC & Funding Circle form UK Partnership from Crowdfund Insider – PwC (formerly PricewaterhouseCoopers), one of the Big Four accounting firms, has signed an agreement with Funding Circle that will funnel small business clients to them.

Consumer Credit Trends Q3 2014 – LendingClub Edition from Orchard – Digging in to the Lending Club loan book Orchard discovers that the new loan vintages, from 2013 and Q1 2014, are performing better than all previous years.

Prosper president sees marketplace lenders one day offering insurance from San Francisco Business Times – While it does not seem to be on Prosper’s near term agenda, president Ron Suber sees insurance as a potential future product for p2p lending platforms.

GUESS WHO’S INVESTING IN P2P LENDING from PYMNTS.com – More on the Mohamed El-Erian story.

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CommonBond logo

Student lender CommonBond (profiled here last year) has created a first in the p2p lending industry: an adjustable rate loan. Adapting the popular adjustable rate mortgage loan from the real estate industry their new 10-year loan product has both a fixed and a variable component.

The CommonBond Hybrid Loan

CommonBond is calling it a “Hybrid Loan” because for the first five years the loan has a fixed interest rate and for the second five years it is variable. I caught up with CEO and Co-Founder David Klein earlier this week to discuss this new product and more.

“The new ‘Hybrid Loan’ was designed to provide borrowers with more options to help them better match their student loan payment goals with their personal financial situation,” said Klein. “It was created based on borrower feedback”.

The lowest interest rate on a 10-year fixed interest rate loan at CommonBond is 4.74%. On the hybrid loan the lowest fixed interest rate is 4.14% but that rate only remains fixed for the first five years. After that time the loan’s rate is pegged to the one-month London interbank offered rate (LIBOR). The interest rate could rise to as high as 10.99% over the last five years of the loan.

So the borrower is certainly taking a risk here given that it is highly likely in five years time that interest rates will be higher than they are now. When I asked Klein about this risk to the borrowers he pointed out that the typical borrower at CommonBond pays off their loan in six to seven years.

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Orchard Lands a $12 Million Investment from Some of the Industry’s Biggest Names

October 21, 2014

When I profiled Orchard back in February, the company was just a few months old and fresh off a $2.7 million funding round. But that wasn’t your typical seed round—Orchard attracted the likes of Vikram Pandit, the former CEO of Citigroup and Tom Glocer, the former CEO of Reuters as investors in that round. While [...]

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Lending Club Reserving Shares in their IPO for Retail Investors

October 20, 2014

Today, Lending Club released an updated S-1 filing for its upcoming IPO. In this document is the long awaited confirmation that Lending Club will be reserving shares in their IPO for retail investors. This is something that has been hinted about before and when I interviewed Lending Club CEO Renaud Laplanche recently on the Lend [...]

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Peer to Peer Lending News Roundup – October 18, 2014

October 18, 2014

During the week I share the latest p2p lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here. Short Term Small Business Lending: The Sweet Spot for Investors? from AltFi – I love small business and I also think [...]

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SolarCity Launches SolarBonds Offering Investors a 4% Return

October 16, 2014

SolarCity is the largest installer of solar panels for residential homes. According to their press release yesterday they provide one out of every three solar systems installed in the U.S. To date they have installed around $5 billion worth of solar panels in 15 states and the money for this has been raised from large [...]

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Update on LendIt Europe in London

October 14, 2014

We are now just over a month away from the LendIt Europe conference in London on November 17 and I want to give everyone an update. This is our first European event that builds on the success of the first two LendIt conferences in New York and San Francisco. Registrations are continuing to come in strong. We [...]

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Peer to Peer Lending News Roundup – October 11, 2014

October 11, 2014

During the week I share the latest p2p lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here. Wall Street’s siren song lures P2P lenders into treacherous seas from the Financial Times – This journalist thinks that p2p lending [...]

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SoFi Tops $1 Billion, Expands into Home Mortgages and Announces an IPO

October 8, 2014

This week SoFi announced they have crossed $1 billion in total loans issued, a milestone they achieved in just over two years after issuing their first loan. This makes SoFi the fastest marketplace lending platform to achieve that milestone. While that is a significant achievement, what is more impressive is the fact they have done [...]

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LAP25: Jared Hecht and Brayden McCarthy of Fundera on the Small Business Lending Problem

October 7, 2014

Jared Hecht and Brayden McCarthy are two of the smartest young minds in our industry. They are both executives at Fundera; Jared is the CEO and Co-Founder and Brayden is the Head of Strategy and Policy. Fundera is a platform that helps small business owners evaluate different loan options by providing easy access to these options [...]

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