The Lending Club is an online marketplace for loans. As a borrower, you can apply for a loan, and if accepted, your loan gets listed in the marketplace. As an investor, you can browse loans in the marketplace, and invest in individual loans at your discretion. This peer to peer model has many advantages over traditional banking counterparts, for example, lower overhead costs, lower cost of capital, etc.
But what excites me the most about peer to peer lending is the democratization of data. As an investor, you can see each and every rejected, completed, ongoing, and available loan. While loan data excludes personally identifiable information, it does include attributes like credit rating, location, college education level, lines of credit, and descriptions of why the applicant needs the loan.Read More