Loanbase Welcomes Our New Team Members

Loanbase has been working hard to improve the fundamental aspects of the platform. We want to lower defaults, increase profits and improve the customer experience on our platform. We welcome two new team members that will be critical in that respect:

NewHires

Katerina Vetrushkova- Lead Risk Analyst

Katerina is going to head our risk management and credit scoring efforts. She has an impressive background as the Head of Risk Analytics and Reporting for Alpha Bank Bulgaria, and prior to that as the Senior Risk Analyst at United Bulgarian Bank. She has demonstrated an uncanny ability to crunch data, analyze risk and develop credit scoring models which perform extremely well. We kindly welcome her to the Loanbase team and we can’t wait to show you what she’s been working on!

Gergana Danailova- Customer Relations

Gergana is joining our Customer Relations team as a intern. We’re really excited to have her on board. We’re always working to improve the customer service experience, verification times and to provide you with the help needed in general. Gergana  will be helping us achieve that and those of you who contact support, or submit your verification documents will have the pleasure to talk with her.

We have some amazing things planned for the future of the platform. Make sure you stay tuned for more updates!

Best Regards,

Kiril Gantchev

CEO of Loanbase

Loanbase is officially here!

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I’m glad to announce that we have now officially rebranded BitLendingClub to Loanbase. This change is an exciting new chapter for our team, the community and, we hope, for the Bitcoin ecosystem as well. Our vision for the future is that borrowers and lenders should not be limited by Bitcoin, but empowered by it. The rebranding is part of our effort to bring the benefits of Bitcoin to the general public, without them needing to know anything about the technology.

What will happen with my account?
There is no change to our system whatsoever, the only thing we’re changing is the domain name and the company name. This means that your account, any data or bitcoin balances will be accessible from your Loanbase account, without any need for porting.

What about links to the old domain?
All of the links will be redirected to the corresponding pages in the new domain, including the referral links.

What will happen to BitLendingClub’s domain?
The bitlendingclub.com domain will automatically forward to loanbase.com. All of the links to bitlendingclub will redirect to the correct loanbase.com pages, including any referral links you have shared in the past. This will ensure the integrity of the platform and the functionality you’ve expected to see.

Will your API still work?
Our API will be available via both domains for the next 3 months. After that, we will shut off access to the API from the BitLendingClub domain and it will only be accessible from the Loanbase domain.

If you have any questions or concerns, then please feel free to contact our team via e-mail: support@loanbase.com
Best Regards,

Kiril GantchevCEO of Loanbase.com@kgantchev

Connect with us:Twitter: @LoanbaseInc
Facebook: https://www.facebook.com/loanbase

BitLendingClub will be rebranding to Loanbase

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BitLendingClub just turned 2-years-old and I couldn’t be more excited about the achievements we’ve had so far! In the past two years we went from an unlikely underdog in the uncertain world of Bitcoin, to being the largest P2P Bitcoin lending platform by volume. Our success comes with a renewed dedication to provide a more sustainable and secure platform for an ever-growing community.

When we first started BitLendingClub, we were in a time when Bitcoin was fighting to get into the mainstream. Having a Bitcoin related name was a testament to our enthusiasm about the protocol and our effort to grow the Bitcoin ecosystem. But Bitcoin has already secured its place in society and having the protocol engraved in our company name is a bit like the dot-com companies putting “web” or  “e” in front of their names (RIP to Webvan and eToys). We strongly believe that growing the Bitcoin ecosystem will not come from putting “Bit” into our company name or tattooing the Bitcoin symbol in our chest (although some might argue here), but from leveraging the block-chain protocol to solve some massive real-world problems. With that said, we’re excited to announce that, in a few days, we will be rebranding to Loanbase.

When will the rebranding take effect?
We will be officially switching to the loanbase.com domain on September 23, 2015.

What will change?
Aside from switching the domain name and replacing all the references to BitLendingClub, not much! There will be a minor update of the design, but there will not be any changes to the way the platform works.

What will happen to BitLendingClub’s domain?
The bitlendingclub.com domain will automatically forward to loanbase.com. All of the links to bitlendingclub will redirect to the correct loanbase.com pages, including any referral links you have shared in the past. This will ensure the integrity of the platform and the functionality you’ve expected to see.

Got more questions?
Send us an e-mail: support@bitlendingcub.com And yes, on September 23, 2015 we’ll be changing that e-mail too!

We’re looking forward to this new and exciting change! Please support us in this effort, but most of all: feel free to contact us if you have any concerns or questions. We’re always here to help and provide you with the best service!

Best Regards,Kiril GantchevCEO of Loanbase.com@kgantchev

Connect with us:Twitter: @LoanbaseInc
Facebook: https://www.facebook.com/loanbase

Increase Your Credit Limit By Leveraging Existing Trading/Merchant Platforms

You can now increase your credit limit by verifying your income with:

            

These options are a part of a larger set of improvements in the Verification Center:

What Are The Benefits?
Bitcoin has created a whole other financial sector, but this innovation comes with certain paint points: many of our borrowers have had a difficult time verifying their income. Borrowers are now able to leverage their existing trading activity on LocalBitcoins or their merchant activity on Coinbase and eBay. This will allow users to easily prove that they have sufficient income to take much larger loans.

What Are The Requirements?

In order to ensure that there is no abuse of the income verification process, we’ve implemented some very simple restrictions:
  • You must have more than 20 unique transactions in the past 2 months.
  • The transactions must have occurred with more than 20 unique customers.
  • Your account must be more than 3 months old.

Users that fulfill those requirements will be able to immediately verify their income. We automatically pull their transaction history and calculate the yearly income on which we’re going to base the credit limits. It’s a very simple process and it leverages your existing activity on these popular platforms.

 

BitLendingClub: Officially The Biggest Bitcoin Lending Marketplace!

How we reached $430K monthly loan volume and became the market leaders in the Bitcoin P2P lending space.

July brought in quite a bit of exciting news in the Bitcoin space and in particular for us at BitLendingClub. The Bitcoin price is reaching past the $270 mark and the media is touting Bitcoin as the next best thing for frustrated Greeks. At BitLendingClub, the biggest news came in after we closed the month of June: we managed to post higher lending volumes than any other platform in the space. We serviced $430K worth of loans last month, while BTCJam serviced $415K worth of loans. We’ve been working hard for the last few months become the leading platform, so this was a huge milestone for our team and our customers!

Market-Share

We have had a number of people ask us how we managed to take a lead. We’ve been making improvements in several areas:

  1. Lowered loss rates: this was a major effort which brought the loss rate down by more than 50% and we’ve kept it that low since March 2015. A loss rate of 7% is on par with the performance of the leading marketplace lenders like LendingClub and Prosper.
  2. Loan voting: users vote for loans which they like, so the good loans tend to bubble-up to the front page, where they get more visibility from lenders. In addition, each borrower has a strong incentive to share their listing on the social platforms (which increases our exposure).
  3. User referrals: we’ve come up with one of the best referral programs in the space. It allows us to spend virtually $0 on marketing, while utilizing the network effect in order to attract good borrowers. Referrals were responsible for 30% of new users and nearly 40% of new user loan volume last month! Each referrer brings us on average of about 4 new users.

However, the biggest thing that helped us take the lead is our team! We’ve come together under one philosophy: focus. Ever since we joined Boost VC, we learned that the biggest thing for the success of a startup is the focus. We focus on one task at a time, we put all of our effort into that task and we measure how that impacts our growth. We also listened to our customer’s feedback and on the occasions that we’ve made mistakes, we’ve always been able to take a step back and ensure we’re doing the best for our customers.

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We’ve become the largest Bitcoin lending marketplace, but our numbers are positioning us for a lot more than just providing loans in the Bitcoin ecosystem. In the past year we’ve serviced over $4.8 million USD worth of loans, which is on par with LendingClub’s first-year volume of $4.8 million USD. However, there is a massive opportunity in bringing affordable lending to countries where the banking system is failing them. We’re seeing the financial failures across the the Eurozone and South America. We’ve had many bumps in the road since 2009, some companies have failed, others have flourished! Despite the challenges, Bitcoin’s greatest success has been at the point where banks fail! Some people are doubting whether Bitcoin is the real deal and Bitcoin businesses are not only proving that it’s the real deal: they’re proving that we’re here to disrupt the status quo!

BitLendingClub Deep Insight Series: How P2P Lending Helps Mainstream Bitcoin Adoption

Bitcoin Powers Global Lending!

Many within the Bitcoin community are still wondering what will be the next killer app that’s going to bring Bitcoin to the mainstream. I can’t say that marketplace lending will be that killer app, but it certainly looks like it has the potential to help a lot of people. Over the past year we’ve observed the risks associated with lending Bitcoin and it’s been an uphill battle. The community went from lending on bitcointalk.org, then a handful of marketplace lenders came in to help the community. VCs have backed some of those marketplaces and a number of others have sprung up in the process. But lenders are still trying to shake off the troubles of the early days, when scams were abundant and risk was difficult to manage. We’re now seeing an extremely promising pattern within marketplace lending, which will make lending a critical part of Bitcoin’s mainstream adoption.

Measure Success

So exactly how viable is marketplace lending? If we’re going to answer that question, then we have to have a solid basis for comparison and what’s more solid than Lending Club? Lending Club came on the scene in 2007 and it certainly didn’t start out as successful as it is today, quite the contrary.

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Lending Club Since 2007

Vintage ROI Loss Loans Volume
2007 -3.44% 14.81% 603.00 $4,791,550.00
2008 -0.27% 11.83% 2,393.00 $19,975,025.00
2009 4.57% 7.40% 5,281.00 $51,814,750.00
2010 6.09% 5.86% 12,537.00 $126,351,175.00
2011 6.26% 6.65% 21,721.00 $257,363,650.00
2012 6.71% 7.40% 53,367.00 $717,942,625.00

BitLendingClub Since May 2014

Vintage ROI Loss Loans Volume
Last 12 Months -5.2% 15.68% 5840 $4,416,589.90
Last 3 Months -1.60% 7.07% 1455 $943,653.18

Data sources: https://www.nsrplatform.com/ and https://bitlendingclub.com/stats

It’s very important to note that we can be certain these statistics are accurate, because Bitcoin loans reach maturity a lot sooner than loans in the fiat marketplaces. The average term on a Bitcoin loan is 30 days, and all payments are due no later than 30 days after the loan is started. This means that each loan is guaranteed to reach first payment maturity within 30 days (even if it’s a 6 month loan). An estimated 80% of the loans have become delinquent on the first payment. Of the 20% that are have become delinquent after the first payment, about 60% are fully repaid eventually.

It took Lending Club over 3 years to bring down the default rate to 7%, to have over 5000 loans per year. Within the first year of operation, BitLendingClub was able to nearly match Lending Club’s first year volume and default rate. Within the last 3 months, we’ve been able to improve the loan performance to the same levels as Lending Club’s 3rd year. The above statistics point to three significant facts:

  1. Bitcoin makes it possible to service a larger number of loans in a shorter period of time.
  2. The increased number of loans provides more data points, which help bring down default rates quicker.
  3. The lack of obstructive regulation allows businesses to provide consumers, from over 120 countries, with the benefits of an efficient lending marketplace.

All of this has been happening, while the BitLenidngClub has grown from 35% market share to 40% market share. So there was no significant sacrifice of consumer safety or economic growth needed to achieve this success.

Prevention vs Collection

These statistics are significant, because the general view of marketplace lending amongst the incumbents is that it can only work if we have collection and reporting agencies to punish defaults. However, neither Lending Club, nor any of its competitors became successful, because they were able to collect on defaults. On the contrary, they became successful, because they were able to prevent defaults. Over 90% of the applicants that request a loan on Lending Club are actually rejected [1].

The marketplace lending space in Bitcoin works quite similarly. However, there are some differences: there are no credit rating agencies and with the borrowers coming from over 70 different countries, most of the data doesn’t even exist for them. The power of Bitcoin is that it allows the marketplace to become that credit rating agency. Borrowers are allowed to build up credit history over time and progressively get access to better credit opportunities.

Why Does it Matter?

A lot of people might be wondering why this matters and the most surprising reason is that despite what we’ve heard in the news, Bitcoin can offer more financial stability. Venezuela’s currency recently dropped in value by more than 50% [2], and in the face of such economic hardship, people from Venezuela are increasingly turning to Bitcoin. At BitLendingClub we’ve had first-hand experience with that fact: Venezuela is #5 by loan volume and it has one of the lowest default rates per any country[3]. The default rate, of 0.47%, is orders of magnitude lower than the average default rate of 7.07% on our platform. With over 373 loans totaling at $189,365.97 USD, the borrowers of Venezuela have shown that despite enduring harsh economic conditions within their country, they have managed to find resilience and economic stability through Bitocoin!

The Big Picture

While looking at the data is helpful, it’s also important to keep the big picture in mind. Yes, marketplace lending is quite small today, but we’ve been able to match and outperform the first-year achievements of the market leader in the space, Lending Club. There were $8.8 billion USD in loans originated in online platforms within the last year, but the global market opportunity is over $1 trillion. And while Bitcoin is the currency that allows us to facilitate these loans, we’re not just restricted to Bitcoin loans, so that $1 trillion dollar market is wide open for us. The borrowers can already request loans in over 10 different fiat currencies, not just Bitcoin. Indeed, future of Bitcoin-powered marketplace lending is a lot more mainstream, than just servicing the needs of the Bitcoin community. Bitcoin allows us to service any loan, in any country and in any currency which is publicly tradable for Bitcoin. This allows marketplaces to reach global mainstream users by using Bitcoin as the value transfer protocol, and providing a seamless experience for lenders from all over the world!

[1] “Rejected Loans on LendingClub – The Post-IPO Edition” http://www.orchardplatform.com/blog/rejected-loans-on-lendingclub-the-post-ipo-edition/

[2] “Currency tumbles as worried Venezuelans look to swap bolivars for dollars on black market” http://www.foxnews.com/world/2015/05/22/currency-tumbles-as-worried-venezuelans-look-to-swap-bolivars-for-dollars-on/

[3] “BitLendingClub Deep Insight Series: Defaults By Country” https://blog.bitlendingclub.com/bitlendingclub-deep-insight-series-defaults-by-country/

Best Practices for Borrowers

Being a good borrower is not that easy. There are a lot of variables that define your personal credit worthiness.

In this line of thought we recently launched our credit scoring model. Your score is like your financial reputation, and can give lenders an idea of how responsible and reliable you are with money. Having a low score indicates you are not responsible with credit or you are just new to the system and may be a risky bet for a lender (you may default on the loan or quit making payments). As a result, you’ll likely be hit with a higher interest rate. Having a high credit score provides a great reason for lenders to believe in your ability to handle your money and loans in your name. You’re likely to be granted a lower interest rate, since you are seen as likely to repay the loan.

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Don’t give up if your credit score is less than great at the beginning. As with most things, knowledge is power, and understanding what lenders are looking for will help you get your loan funded and you credit score high. Here are some advices that may help you to improve your credit-worthiness:

Verify your actual income

If you can’t give lenders adequate, legitimate information that shows proof of income and assets that can be used to pay back the loan, the lender may decide not to venture with your listing at all. That is why we strongly recommend to keep the income information in your account up to date. All the documents you submit pass through a detailed inspection by our verification specialists and remain securely in our database.

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Verify your identity with Lenddo

We’re working together with Lenddo in order to provide our borrowers with another easy way to verify their identity and demonstrate their creditworthiness. The only thing you need to do is to give Lenddo a permission to review your personal email information. Connecting Lenddo would take only 2 minuses but it may also cause a great impact on your credit score!

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Link all your social and trusted connections

Most of the lenders take into account social media presence when determining a loan applicant’s eligibility, so make sure that you share as much information as you can.

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We use social and trusted connections to get more information on borrowers while calculating their credit score as well. It would be good if your accounts are properly filled and all the personal information is correct. For example, adding education or marital status on Facebook or updating your professional experience on LinkedIn could have a good influence on your score.

Do not undervalue the description box

Writing is a great way to present your idea to our investors. The funding of your loan request depends on how well you present yourself and your financial needs to the lender. Be as clear and explicit as possible why you need the money. Explaining specifically what the funds will be used for and why they are needed will help our investors to decide whether they want to invest in this loan or not. Investors will also look for relevant information regarding your financial status or any other details that would expose your ability to repay the loan.

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Reduce the amount of debt you owe

Having a lot of outstanding debt could indicate a greater risk of default and bring down your score. We advise to take one loan at a time and not to max your credit limits all the time.

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Do not break your commitments

Possibly the most important step in building a trust is to not break your commitments. Make sure you chose the right term and payment cycle for your loan. Even if you are late with your payment by a few hours only, it could destroy the trust our investors have in you. It will affect your credit score as well.

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Even a single late payment could have a bad influence on your credit score, but rather than worrying about it, be sure you cover all your due payments on time from now on. A one-time two or three days late payment will probably not drastically affect your credit score, but repeated late payments will definitely have a more significant effect, even if you are late by only a few hours each time. A pattern of lateness is worse than a one-time mistake.

Be honest

If you truly cannot meet the promised deadline, be decent enough to explain your investors the situation you are in. Telling the truth even when the truth isn’t perfectly pleasant will help you to become much more trustworthy.

Being mindful of what is takes to get debt today and attending to details related to your borrower profile can make the process of funding your loan easier. We hope you will find our advices as a good start for your future borrowing!