According to sources in the financial sector, multinational banking and financial services company J.P. Morgan Chase & Co are set to acquire $1 billion worth of loans from peer to peer lending company LendingClub Corp.
Online personal loans market on the rise?
Lending Club, one of the leading peer to peer lending platforms in the US, is said to have amassed over $900 million in personal loans, comprising of loans made to consumers with an average FICO score of about 700, which has now been sold to J.P Morgan Chase & Co for a premium. Arrays of credit market experts kept an eye on this particular sale, and have stated since that it is a positive representation of the online personal loans market and other new banking systems.
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The loans were previously owned by Santander Consumer USA Holdings- a subprime auto lender, who acquired them as an agreement with Lending Club; these were then sold as Santander decided to scale back on its personal loan business. This scaling back led to concerns regarding the value of the loans, which led to further concern over fewer people paying back their loans than expected, therefore decreasing the value of the portfolio. However, this markdown has not affected the Lending Club loans, according to people familiar with the matter, which makes it highly likely that everyone will pay back their loans.