The sixth-most-trafficked web site in the U.S. now has a personal lending element.
Facebook, the online social network, yesterday launched the person-to-person lending service managed by Lending Club. The service will allow users to borrow and lend money directly among each other. Borrowers can apply for loans of as much as $25,000, but they must have a credit score of at least 640 — essentially a prime borrower — to obtain credit.
Lending Club’s proprietary LendingMatch system helps lenders identify loans based on pre-set criteria, such as being Facebook friends or being in the same network, group or geography. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers, and collections.
The company generates revenue by collecting a one-time processing fee of 0.75% to 2% of the loan amount from borrowers and a processing fee of 1% of the installment amounts from lenders.
Lending Club is based in Sunnyvale, California.
According to an article in [the] New York Times, “Facebook, which is largely supported by advertising, has gained significant momentum over the last year. Since the site opened up to nonstudents eight months ago, its membership has doubled to 24 million, according to the research firm ComScore. Users now spend an average of 14 minutes on the site every time they visit, up from eight minutes last September, according to Hitwise, a traffic measuring service.”
But Facebook is stepping into an ever-more crowded space. Prosper.com, arguably the leading peer-to-peer online lender, has seen its traffic and usage soar in recent months. And just this month Virgin USA, the North American arm of the global conglomerate, agreed to purchase CircleLending, another P2P credit provider. Virgin’s specific plans for CircleLending are as yet undisclosed. Meanwhile, Zopa is the leading P2P lender in the United Kingdom.
Source: Banknet 360
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[…] MicroCapital Story, May 30, 2007, “Facebook Launches a Person-to-Person Lending Service,” https://www.microcapital.org/news-wire-facebook-launches-a-person-to-person-lending-service/ […]