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Lending Club, a P2P loans community on Facebook, has launched a new website to expand its model beyond the social network.

Lending Club

Lending Club's members borrow and lend money from each other, taking banks out of the equation and lowering costs.

It launched as a Facebook application in May and has since loaned out over $1m (£500k) to the social network's members.

Lenders decide on how much they are prepared to lend and the terms of the loan. Borrowers then choose a loan from the range of rates on offer.

With this model, the risk for lenders is reduced by the fact that loans over a certain amount are spread across several different lenders, and loan applicants are credit checked. 

Lending Club has added several new features to its site, allowing users from the same workplaces, towns etc to connect with each other, adding better search options and a greater range of loan options.

The social lending model is becoming more and more popular as an alternative to traditional methods. UK firm Zopa operates on a similar model and has around 150,000 members, around one third of which are lenders. Zopa recently launched its service in the US.

Related stories:
Internet social lending 'may threaten banks'

Graham Charlton

Published 14 September, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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