The CEO of LendingClub, Scott Sanborn, says that they are really looking to make membership in the club mean something and are working to take Lending Club and turn it into a ‘financial health club’ that will help people successfully manage expenses. He says that LendingClub helps by shining a spotlight on credit card debt which is the first step to doing something about it.
Scott Sanborn, LendingClub CEO, discussed the business with Investor’s Business Daily:
A Looming Crisis in People’s Overall Financial Health
We are seeing really an epidemic happening which is incomes have been stagnant for more than 20 years. All of people’s major expenses, healthcare, college, housing, is going up and it’s creating a real looming crisis in people’s overall financial health and it’s something that people just aren’t talking about. Close to half of Americans have credit card debts and they are more than twice as likely to talk about spousal infidelity than they are about the fact that they have credit card debt that they need to manage. We believe that by shining a spotlight on the problem it’s the first step to helping people do something about it.
The first core thing we’re doing is we help people who have credit card debts pay that off with a healthier form of debt. Credit cards are now at a record high-interest rate average of about 19 percent. We allow them to pay that off with a fixed rate, fixed payment installment loan that will be paid off in a defined period of time so that they’re not caught in the minimum payment trap. It’s healthier for their overall credit profile.
Turning Lending Club Into a Financial Health Club
As we’ve been working with consumers to solve this problem we’ve increasingly been finding ways to actually do it even better. We launched last year the ability as part of the loan application to directly pay off the credit cards through the process. Instead of giving you the money, asking you to turn around and take care of it, we do it directly. In exchange, if you elect to do that we’ll give you a lower rate, essentially incent you to do it and make it easy for you to do it.
The bigger picture in the course of time is we’re really looking to make membership in the club mean something and take Lending Club and turn it into really a financial health club and do more for people to help them manage these expenses.
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