Assignment 6

This is an individual assignment. The document should be 2 to 3 pages long.

Assignment 6: Lending Club Case

Answer the following questions:

  1. How did the idea of P2P lending come up in general? Why do credit cards have to charge high rates for short term loans? How do you compare P2P marketplace lenders to commercial banks?
  2. What is Lending Club’s business model? Comparing with other P2P players, what are the similarities and differences?
  3. According to Lending Club’s Interest Rate Model, what is the interest rate on a$12,500 loan if the borrower has a FICO score of 671 and a debt income ratio of 20%? What is the interest rate on a $10,000 loan?
  4. What are the key risks associated with the P2P lending system?
  5. Why did Lending Club bring in WebBank? How this change Lending Club’s business model?
  6. Should Lending Club invite SEC regulation? What is the difference for the security model? What are the pros and cons?

Course Info

As Taught In
Spring 2018
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