Loanio CEO Michael Solomon has let us peek under the hood and we have some exclusive screen shots.
Loanio homepage
Borrow on Loanio - Unlike other p2p lending sites, Loanio allows partial funding. As seen on borrower page (below), "If enough bids equal 100% of your loan, it automatically gets originated. If the bids equal more than 35%, but less than 100% of your loan, you can accept less or try again."
Lending on Loanio - As seen below, lending on Loanio is similar to other p2p lending sites. At FINOVATE, Solomon told the audience, ""We believe that the use of co-borrowing and plantinum listings will provide a greater amount of security and confidence to lenders."
Co-borrow on Loanio - Borrowers have the option to add a co-borrower to their loan. Co-borrowers must have a credit score higher than the other borrower on the loan and must have at least a E credit grade.
Platinum verification - For a small fee, borrowers can improve their odds of funding through platinum verification. Platinum verified borrowers will have the following checked by Loanio - photo ID, income, bank account, employer, address, homeownership.
Loanio credit grades - To borrow on Loanio you must have a credit grade of E or higher. Loanio has established a credit grade system from A+ to F or no score (NC). An E credit grade is equivilant of Experian VantageScore 569-603. With a F or NC credit grade score you must have a co-borrower to use Loanio.
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8 comments:
I find it interesting that in estimating future defaults they "halved the Experian report's default odds." Seems that they wanted to be conservative on estimating potential defaults, but I wonder what data led them to decide half or whether that was an arbitrary guess.
Allowing borrowers to accept the proceeds of a partially funded loan is I think a very good feature. I am sure that borrowers on sites like Prosper were frustrated when their loans were cancelled because they did not draw the full 100%. It is good for lenders too because they don't have to take the time to find another loan to reallocate their funds.
Matt - good points. Not sure where the halving comes from. Perhaps they looked at stats from Prosper or Lending Club to build some history.
I also agree they partial loan funding is a good idea. It would be easy for Prosper or LC to add that feature in the future if they want.
I guess I always thought LendingClub always had the option for borrowers to accept a partially funded loan.
Check out Lending Club's FAQ on partial funding and relisting:
https://www.lendingclub.com/info/faq.action#b5
How odd - Platinum verification sounds like what "normal" verification should be! Great post - looking forward to Loanio opening up.
Eric--I think the difference on Loanio is that they intend to verify things like income, employment, photo id, notarized signatures--before the bids begin to give lenders more info, instead of randomly/maybe verifying this data only after the bids are tied and up and and funding is about to be made.
A couple of points:
(1) if you halve the odds of default, you have made the likelihood of default lower. let's assume they meant "double" the default risk:
"Loanio believes that the default odds for peer loans might not be as favorable as the odds for credit card holders in this study and therefore we have generously halved the Experian report's default odds"
(2) When did they post the "couple of weeks" notice? Has two weeks passed?
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