LendingClub ($LC) has a unique space in the lending industry: it offers Member Payment Dependent Notes, which is the technical term given by the SEC to describe its peer-to-peer lending service. Becauase of this distinction, all loans on the platform are made publicly available through the federal government. This allows us to gain some insight into who's taking out loans and for how much.
During the first two months of 2019 — the first two months Americans begin filing taxes — LendingClub borrowers took out 80,988 loans totalling $1.347 billion in max principal. When looking at the credit scores of those who received these loans, those with lower credit scores took out more loans than those with higher credit scores.
People with lower credit scores, on average, also took out more loans in terms of total principal.
This trend could be due to one of two factors: one is that first-time borrowers can be given a low score due to a lack of credit history, and the other, more unfortunate situation, is that those in debt and with bad credit scores are coming back to get more personal loans.
Is it also possible that people with lower credit scores turn to peer-to-peer lending? Possibly, but then again, the minimum credit score from this data was at 680, 10 points above what FICO describes as a "good" credit score. That also leaves out about 20% of Americans who have a "fair" credit score of 580-669, which can get subprime rates.
Who are taking out these loans?
So, people with lower credit scores are taking out more loans, but who are they?
This loan data is also tied to a debtors' career, if that person lists it on the document to help get said loan.
Those who identify as a "Teacher" with that exact taxonomy took out 1,546 loans for $26 million, which is more than any other specific career category, excluding the 13,904 loans totalling $212,545,150 from filers who did not specify a career.
| Job Title | Number of Loans (Jan/Feb) |
Max Principal (Sum)
|
|---|---|---|
| Teacher | 1,546 | $26,261,425 |
| Manager | 1,251 | $20,848,925 |
| Registered Nurse | 670 | $12,699,525 |
| Driver | 649 | $9,596,700 |
| Supervisor | 624 | $9,798,000 |
| Sales | 478 | $7,887,850 |
| RN | 456 | $8,526,750 |
| Office Manager | 426 | $6,892,325 |
| Project Manager | 413 | $7,803,375 |
| General Manager | 373 | $7,173,150 |
However, when specific job titles are all put into normalized groups, "Manager" employees took out more loans than "Teacher" employees. All applications with some form of Teacher jobs accounted for $37.125 million worth of loans, while applications for loans given to Managers totalled.
Here are a few more aggregated positions which covers a good cross-section of upper, middle, and lower class jobs (Note: overlapped positions, such as "Nurse Manager," are included):
| Job Type | Number of Loans (Jan/Feb) | Max Principal (Sum) |
|---|---|---|
| N/A | 13,904 | $212,545,150 |
| "Manager" | 11,176 | $200,766,000 |
| "Teacher" | 2,233 | $37,125,425 |
| "Driver" | 2,154 | $32,890,700 |
| "Nurse" | 1,744 | $31,885,625 |
| "Accountant" | 476 | $8,396,025 |
| "Professor" | 239 | $4,793,600 |
| "Secretary" | 246 | $3,497,725 |
| "Cook" | 163 | $1,985,900 |
| "Lawyer" | 18 | $392,900 |
There doesn't seem to be a specific divide in the type of people who are taking out loans, at least when looking at job title data. And that might be easier to explain; it's possible to have a strong career but horrible credit. It's also possible to be struggling and have bad credit, too, which might