As a Lending Club investor for around 18 months now, I still find it surprising that a small percentage of loan applicants fail to give even the most basic of information in their loan description.
To me, the P2P lending investor, it makes perfect sense to give as much information as possible (without compromising your personal identity to investors) to quickly attract as many new investors as possible by providing basic information, such as: job description, how long you have worked in your profession, your monthly budget, a brief explanation of what the loan will be used for (especially if it’s a business loan), etc., etc.
Granted, this isn’t a Lending Club requirement and many P2P lending investors will not care if this information is included on the application. But, in my humble opinion, going the extra mile is often something that makes the difference between getting your loan request fully funded versus partial funding.
Perhaps I’m too old school for my own good, or I like some semblance of a personal handshake, but I honestly feel more comfortable lending to those who actually take pride in completing their Lending Club loan application and make a proactive effort in the due diligence process without the investor having to grab hold of the proverbial “information rope” in order to pull as much basic information from the borrower as possible.
Case in point: this superb loan application from a borrower applying for a debt consolidation loan to refinance existing credit card debt at a lower interest rate.
As you can see, the borrower goes above and beyond in the loan description section by anticipating as many of the top Lending Club investor questions that were pertinent to his loan application.
Personally, as the Lending Club investor, such a loan application gives me more confidence in the borrower’s intent to fully repay his promissory note on time, every time. Of course, a borrower filling out a loan application to this degree does not mean that he or she will have a repayment metric of 100%, but I personally feel people who have a well thought plan, an organized budget, and takes the time to illuminate investors about their personal finances and/or financial goals, will have a lower rate of default than someone who throws up a loan application doing as little work as possible.
Disclosure: I did not invest in this Lending Club loan as it does not meet my typical Lending Club high yield investment strategy, but thought it deserved highlighting because it’s one of the best loan applications I’ve ever seen in the Lending Club platform. Also, I omitted the borrower’s employer to preserve the borrower’s anonymity to Lending Club investors only.