The problem that LendingRobot has set out to solve is an interesting one, and shines a little light on the way P2P lending has already matured.
Using what it calls “high-speed automation software and machine-learning algorithms”, the service helps investors automate the lending process, based on pre-selected criteria, so that LendingRobot is able to select and invest in loans less than one second after they become available.
Why is this significant? As so-called professional lenders, including hedge funds, have stepped into the P2P lending space, competition amongst investors means that the most attractive loans (or “notes”) are snapped up incredibly quickly, making it time-consuming to manage your P2P lending portfolio or, worse still, meaning that you only have access to any leftover scraps.
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- The problem that LendingRobot has set out to solve is interesting, and in a way it shows how peer-to-peer lending has grown. The problem is that most loans are snatched up by hedge funds minutes after they are released, leaving the little guy investors with second-rate scraps to pick through. LendingRobot is the automated, super-fast tool that allows people to compete with Wall Street for the best loans.
- The LendingRobot team developed the basic idea to automate their own personal investments, taking inspiration from the ‘sniper’ software that enables automated last-minute bids on eBay.
- The software has numerous filtering options, including an ingenious ‘popularity’ criterion and a sophisticated machine-learning algorithm that automatically cherry picks the loan investments with the highest expected returns.
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