P2P loan network Lending Club is expanding beyond its original Facebook member base to connect lenders and borrowers over the public Internet via a new Website, LendingClub.com.
The move out of the FaceBook community comes less than a month after the California-based start-up secured $10.26 million in a Series A funding round. Since its launch at the end of May, the Lending Club 15,000 Facebook users who have loaned and borrowed more than $1 million among themselves.
Using Lending Club, borrowers can apply for personal loans of $500 to $25,000 to be funded by one or many individual lenders. To date lenders have funded 90% of all approved loan requests. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers and collections.
The Lending Club system uses a proprietary affinity-matching technology that looks at factors such as where a person grew up, went to school or what they do for a living, and assigns credit scores to individual borrowers. The new site also includes 'Better Rates Together' a blog community that features expert advice on P2P lending and personal finance.
Renaud Laplanche, founder and CEO of Lending Club, states: "We promote responsible lending and borrowing with fixed-rate installment loans which allow borrowers to pay off 100% of their loan within 36 months. By cutting the banks out, both lenders and borrowers get a better deal and help each other."
By extending its reach beyond the Facebook community, Lending Club will enter direct competition with rival service Prosper which was launched in February 2006 and now claims more than 400,000 members who have made loans totaling in excess of $85 million.
The company recently released its first batch of monthly stats, which show steady year-on-year growth. Prosper said it had 30,623 new members in August vs. 12,825 new members in August 2006 and funded loans of $6.6 million in the month, against $3.9 million a year earlier.