Lending Club Presentation1
LENDING CLUB
NYSE: LC
Monday, 02 February 2015
INTRODUCTION

Lending Club Presentation2
Average U.S. total household debt is $107,7001
Median U.S. household income of $51,939
Avg Debt 207% of income
LENDINGINAMERICA
1. WSJ
Overview
Household Debt
Average US household credit card debt is 15,950$
Or 14.8% of total debt
Average interest rate on CC debt is 17%
Credit Card Debt

Lending Club Presentation3
Average U.S. total household debt is $107,7001
Median U.S. household income of $51,939
Avg Debt 207% of income
LENDINGINAMERICA
1. WSJ
Overview
Household Debt
Average US household credit card debt is 15,950$
Or 14.8% of total debt
Average interest rate on CC debt is 17%
Credit Card Debt
0% 50% 100% 150% 200% 250%
U.S. Household
Greece
Italy
Spain
Debt/GDP

Lending Club Presentation4
Average U.S. total household debt is $107,7001
Median U.S. household income of $51,939
Avg Debt 207% of income
LENDINGINAMERICA
1. WSJ
Overview
Household Debt
Average US household credit card debt is 15,950$
Or 14.8% of total debt
Average interest rate on CC debt is 17%
Credit Card Debt
0% 50% 100% 150% 200% 250%
U.S. Household
Greece
Italy
Spain
Debt/GDP
0.00% 10.00% 20.00%
Greek 3yr Bond Yield pre-Syriza
U.S. Credit Card Debt
Greek 3yr Bond Yield post-
Syriza
Interest on Debt

Lending Club Presentation5
233 Months
156 Months
119 Months
97 Months
£10,000.00
£11,000.00
£12,000.00
£13,000.00
£14,000.00
£15,000.00
£16,000.00
£17,000.00
£18,000.00
£19,000.00
£20,000.00
1% 2% 3% 4% 5% 6%
Totalamountpaid
Percent paid each month
LENDINGINAMERICA
1. Navy Federal Credit Union
Credit Card Debt
Paying off £10,000 in credit card debt at 17% APR

Lending Club Presentation6
17% return on investment is ridiculous
More than compensates for defaults.
Many people would loan money for much less than 17%, but:
Adverse selection and high individual risks for smaller lenders make this difficult
LENDINGINAMERICA
Competing with big lenders
Competition to
lenders

Lending Club Presentation7
17% return on investment is ridiculous
More than compensates for defaults.
Many people would loan money for much less than 17%, but:
Adverse selection and high individual risks for smaller lenders make this difficult
LENDINGINAMERICA
Competing with big lenders
Competition to
lenders
In the U.S., your FICO score and credit report can be accessed by anyone lending to you
FICO is an algorithm that measures credit worthiness
Takes into account total debt, payment history, type of credit, income/debt ratio
Gives a score between 300 and 850
<650 is subprime (now nonprime)
650 is acceptable
720 is good
>780 is excellent
FICO
&
Credit Reports

Lending Club Presentation8
17% return on investment is ridiculous
More than compensates for defaults.
Many people would loan money for much less than 17%, but:
Adverse selection and high individual risks for smaller lenders make this difficult
LENDINGINAMERICA
Competing with big lenders
Competition to
lenders
In the U.S., your FICO score and credit report can be accessed by anyone lending to you
FICO is an algorithm that measures credit worthiness
Takes into account total debt, payment history, type of credit, income/debt ratio
Gives a score between 300 and 850
<650 is subprime (now nonprime)
650 is acceptable
720 is good
>780 is excellent
FICO
&
Credit Reports
Packaged Debt
Mortgage backed securities were created to reduce
individual risk by pooling large numbers of mortgages
together
Not to be confused with Collateralized Debt
Obligations, which were used to alchemize junk-
grade subprime mortgages into investment-grades
by creating a tower with varying payment priorities.
By buying $10,000 of an MBS, you own a tiny piece of every loan contained within the MBS
One individual defaulting will have a minimal impact on the value of an MBS

Lending Club Presentation9
LendingClub
Lending Club
1. Lending Club
Peer to peer lending company
Seeks to lure borrowers away from larger lenders by providing loans with lower interest rates
Does not loan money itself, instead takes 1% a cut on interest paid by borrowers to lenders
Purpose

Lending Club Presentation10
Has access to the same information as credit card companies
Takes FICO score (>650 only), credit report (income, existing debt, payment history), the purpose of the
loan and “other information” into account and assigns a loan grade. Accepts about 10% of applicants.
Slices each loan into smaller pieces that are sold individually.
Lenders can select each pieces individually or automatically based on assigned criteria
LendingClub
Lending Club
Method
1. Lending Club
Peer to peer lending company
Seeks to lure borrowers away from larger lenders by providing loans with lower interest rates
Does not loan money itself, instead takes 1% a cut on interest paid by borrowers to lenders
Purpose

Lending Club Presentation11
Has access to the same information as credit card companies
Takes FICO score (>650 only), credit report (income, existing debt, payment history), the purpose of the
loan and “other information” into account and assigns a loan grade. Accepts about 10% of applicants.
Slices each loan into smaller pieces that are sold individually.
Lenders can select each pieces individually or automatically based on assigned criteria
LendingClub
Lending Club
Method
1. Lending Club
Peer to peer lending company
Seeks to lure borrowers away from larger lenders by providing loans with lower interest rates
Does not loan money itself, instead takes 1% a cut on interest paid by borrowers to lenders
Purpose
699 FICO score
16.9% debt-to-income ratio (excluding mortgage)
15.8 years of credit history
$73,157 personal income (top 10% of US population)
Average Loan Size: $14,182
Average
Borrowers1

Lending Club Presentation12
LendingClub
Notes & Grades
1. Lending Club
Effectively subprimeLikely between 650-700Likely 700+

Lending Club Presentation13
LendingClub
Example Portfolio
1. Lending Club
A
7.62%
B
11.85%
C
15%
D
17.67%
A
7.62%
A
7.62%
A
7.62%
D
17.67%
D
17.67%
D
17.67%
D
17.67%
D
17.67%
D
17.67%
D
17.67%
C
15%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
B
11.85%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
C
15%
Portfolio
4.68% 6.82% 7.86% 7.89%
C
15%
NR

Lending Club Presentation14
LendingClub
Lending
1. Lending Club
Activity1 Last Quarter Average Interest Rate1
36-month: 12.07%
60-month: 16.92%
All Loan Terms: 14.09%
Investor Performance1