Lending Club Can Be a Better Bank Than the Banks
Jared Sperli stashed this in economics
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None of that is exactly wrong, but here is a more accurate picture: 2
- You want a loan, fill out the form, etc.
- I open an account, think you look likely, etc.
- A bank gives you the loan.
- The bank sells the loan to Lending Club.
- Lending Club keeps the loan on its balance sheet.
- Lending Club creates an unsecured structured note referencing that loan.
- It sells that note to me.
- Then you make payments to Lending Club, and it makes payments on the note to me.
- You never owe me money: You owe Lending Club money, and Lending Club owes me money.