Lending Club to Expand into Collateralized Loans
More than just Personal Loans
Ben Rogers of the Filene Research Institute looks ahead to the future of peer lending in his interview with Lending Club CEO Renaud Laplanche and sees more than just basic personal loans.
This doesn’t come as a surprise to many people. Peer lending started out in the most basic format, one person lending money to another with no collateral supporting the loan. As the industry starts to figure out the model, they’re looking to move into other types of loans.
Collateralized loans are an interesting development since they will provide some form of property to back up the loan. Theoretically, this should help to reduce the risk of lending since there is collateral to go after in the event of a loan default.
According to the article, this type of peer lending is on the way and we shouldn’t expect it to be limited to just Lending Club.
Look for Lending Club to move to collateralized loans within 12- to 18-months, Laplanche says. And if Lending Club is first, look for the other players to quickly follow suit.
It’s interesting and exciting to watch as the peer lending industy adapts and expands to offer more financial options for consumers.
Source: Filine CU Tomorrow: Lending Club taking over the loan world
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