LendingClub Corp. said Tuesday it would raise interest rates for new loans by an average of 0.25% to match the Federal Reserve’s move earlier in December. The announcement means that people who borrow money through Lending Club, who often seek to pay back more expensive credit-card debt, will bear the cost of the Fed’s recent increase in the benchmark federal-funds rate. The...
Lending Club announced December that it will raise interest rates for new loans by an average of 0.25% to match the Federal Reserve's move earlier in yesterday. The Wall Street Journal suggests that the move “may indicate a shifting dynamic for peer-to-peer lenders, which have mostly been competing for new borrowers via direct mail and personal-finance websites, while enjoying a long queue of investors starved for yield by rock-bottom interest rates. Lending Club could have done nothing, essentially giving borrowers a free pass on the rising cost of credit, but Chief Executive Renaud Laplanche said that Lending Club's more effective marketing and targeting of borrowers mean that higher rates wouldn't slow down the platform's growth.