How Small Businesses Can Refinance Their Debt

When your business is in trouble, it's understandable that you'd do just about anything to save it. However, as things improve, you could be doing your business a disservice by not refinancing your high-interest debt and replacing it with a more reasonably-priced source of capital. That's why small business debt refinancing could be the best option for some entrepreneurs.

What Consumers Want (and Don't Want) in a Credit Card

Choosing the right credit card is as easy as it may seem. From interest rates and introductory offers to late fees and annual fees, what is that consumers are looking for in a primary card? And what do they want to avoid?

Money at 30: Is it Time to Deemphasize College?

Let me be clear that there is, without a doubt, value in higher education. That said, with the myriad of knowledge sources available to us and the student debt crisis still raging, perhaps it's time we rethink the extreme emphasis we place on college.

How Lending Club Works (Infographic)

How Lending Club Works (Infographic)

Marketplace lender Lending Club has been growing astronomically over the past several months, even hitting $16 billion in loans earlier his year. Still their platform is not quite what you’d consider mainstream at this point. In an effort to educate the public about their efficient and transparent lending model the company recently unveiled an infographic that helps to break down how the site works and how investors and borrowers can benefit.

First some background: Lending Club was founded in 2007 by CEO Renaud Laplanche. His idea was to create a more efficient way to lend money as he saw how much waste there was in the traditional banking system.

By operating on the internet his company was able to not only keep their costs low but also pass those savings onto borrowers. Originally starting as a Facebook application that only dealt in personal loans, Lending Club has now added small business loans and line of credits, financing for medical/dental/orthodontic procedures, and educational loans to their offerings.

In addition to the lower rates borrowers can obtain through Lending Club, the application process is notably fast and simple. Best of all applying for a loan on the platform does not trigger a “hard pull” of your credit and won’t impact your score. Once approved, loan requests are then listed on the Lending Club marketplace and fulfilled by investors. Borrowers receive their funds once loan’s notes are bought. All loans made on the platform are paid in monthly installments at fixed rates that will be discussed before you accept a loan offer.

So what’s in it for investors? The investment side of Lending Club is easy to use as well and can be a great way to earn some extra income. This is achieved by building a portfolio of loan notes. Investors are only required to put a minimum of $25 towards any given loan which allows them to diversify and manage their risk. As each loan in paid back the investors who helped fund it will receive their portion of the monthly payments. An impressive 99% of investors who hold over 100 notes on the Lending Club platform with no one loan making up more than 1% of their account see positive returns on their money.

Approximately 68% of Lending Club borrowers use their personal loans for debt consolidation. Additionally the average borrower reports that their Lending Club interest rate is one-third lower than what they were paying previously. Borrowers also love the fixed-rates that the company offers (meaning that your payments won’t increase) and that there are no prepayment penalties or hidden fees. This has led Lending Club to maintain an A with the Better Business Bureau and ┬áreceive many rave reviews from past borrowers.

Over the past nine years Lending Club has seen tremendous growth and many happy customers. With strong benefits for both borrowers and investors the company has now facilitated over $16 billion in loans. Whether you’re looking for a personal loan consolidate your debt, a small business loan to grow your company, or want to invest and help others at the same time, the Lending Club platform could be for you.

Comments

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

How Small Businesses Can Refinance Their Debt

When your business is in trouble, it's understandable that you'd do just about anything to save it. However, as things improve, you could be doing your business a disservice by... Read More

What Consumers Want (and Don't Want) in a Credit Card

Choosing the right credit card is as easy as it may seem. From interest rates and introductory offers to late fees and annual fees, what is that consumers are looking... Read More

Should You Be Paying Quarterly Estimated Taxes?

Perhaps the largest difference in being a "regular" employee and being self-employed is, in most cases, independent contractors, freelancers, and other self-employed individuals are expected to pay estimated taxes. How... Read More