Borrowers are getting funded pretty easily these days at Lending Club. In fact over 98% of loans have funded at Lending Club this year according to Lendstats and in my conversations with management there they say the number is even higher than that. So one could argue that every day is a great day to borrow money at Lending Club. But some days are certainly better than others.
The average amount of time to fund a loan hasn’t reduced much in the last year. Including weekends (when no loans are issued) in April 2010 it took 8.0 days for a loan to be issued and in April 2011 it took 7.7 days. Not much difference there. But if look at loans issued towards the end of the month you will see something different. Loans issued in the last two or three days of the month issue much more quickly on average.
Loans Issued in 27 Hours
Let’s take last month as an example. Some loan applications entered into Lending Club’s system on April 28 (the second last working day of the month) issued the very next day. Take a look at this loan, a $4,000 three-year credit card refinancing loan at 15.99%. It was submitted on 4/28/11 at 9:03am. It was issued the very next day, 4/29/11 at 11:58am. Or this loan, a $5,000 three-year home improvement loan at 14.79%. It was submitted at 9:16am on 4/28/11 and issued at 12:28pm on 4/29/11.
Now, that is just two loans out of the 1,563 loans issued last month. And several loans submitted on 4/28/11 took the full two weeks to fund. But if you analyze the loans from the last week of April, you will see that 4/27/11 was the best day to apply for a loan last month if you wanted your money quickly. Loans funded in an average of 6.15 days with a whopping 20 of the 52 loans submitted on that day funding in just two days.
The Very Best Day to Apply for a Loan at Lending Club
So, does that mean the fourth last day of the month is the best day to apply for a loan? Not necessarily. In March the best day of the month as far as funding average goes was March 27 where loans funded in an average of 5.41 days. So which day is the very best? That will change from month to month, but if you apply for a loan some time in the last week of the month (but not the last day) you will likely get your money more quickly, and you may get it in just a day or two.
Now, I have discussed the reason for this phenomenon before. Lending Club gets a huge influx on investor funds from their institutional investors on the last day of month. Last month it was about $4 million according to my estimates. All this money gets invested into borrower loans on the last day of the month.
Of course, with over 98% of loans funding any day is in fact a good day to apply for a loan at Lending Club. If you can get approved for a loan then you will most likely get your funding.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.