Lending Club's CIO, Siddhartha Jajodia, sent a letter to investors on October 14 alerting them of an increase in interest rates; Lending Club says it will increase loan rates by a weighted average of 26 bps with rate changes mostly concentrated in the lower credit quality loan grades; the rate increase follows a previous weighted average interest rate increase of 135 basis points from November 2015 to June 2016; the rate increase is consistent with a lower credit quality trend observed from the platform’s borrowers as well as a higher trending rate environment in the US; additionally the firm also reported changes to credit policy standards and improvements to its collections efforts.
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Lend Academy recently highlighted the trends in interest rates at Lending Club in their recent article; Lending Club has changed interest rates five times since late 2015; the recent trend of increasing rates can be seen in the below chart taken from Lending Club's statistics page which tracks average interest rates across loan grades since 2008; higher risk loans have seen the most impact from recent changes in interest rates. Source
Blog post outlines platform performance and improving delinquency rates across most grades and terms; provides perspective on the economic backdrop and interest rates; the company has updated their loss forecasts; projected returns are similar to last quarter with small increases for grades F and G. Source