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02-25-2017, 02:44 PM #1
- Join Date
- Nov 2014
Lending Club additional interest on late payments
Did anyone get this email from Lending Club? It says this will be applied on all payments going forward for all loans. That can't mean existing loans right?
Changes to Grace Period Interest Accrual
As you know, we continually revisit our processes and procedures to optimize the performance of our marketplace.
Starting today, Feb 24, 2017, we are eliminating the grace period interest waiver in order to better align borrower payment incentives as we seek to deliver solid returns to our investors. Please see details below and don't hesitate to let us know if you have any questions.
• Lending Club historically offered borrowers a 15-day "grace period" in which they could make payments after their due date without penalty. Historically, if borrowers made a payment within the first 15 days after their due date: 1) they would not accrue a late fee for paying their amount due late; and 2) any interest accrued during grace period would be waived.
• Under the new policy, if a borrower pays between 1-15 days past their due date, they will still receive the benefit of not accruing a late fee, but they will now have to pay the additional accrued interest as a result of their late payment. This will have the effect of additional interest being accrued over the life of the loan due to the incremental higher principal balance throughout the life of the loan. Any additional interest accrued over the life of the loan ultimately has the effect of increasing the loan maturity by one month.
• New policy will be applied on all payments going forward for all loans as of February 24, 2017.
We believe this policy is beneficial for both borrowers and investors.
As always, thank you for your business, and feel free to reach out to email@example.com or (888) 596-3159 M-F 7am-5pm PT with any questions.
The Lending Club Team