Lending Club is the world’s largest online P2P marketplace. P2P stands for Peer-to-Peer lending. It is the practice of lending money through online services that match lenders directly with borrowers.
Lending Club categorizes loans into 7 grades from A to G based on its risk level. A has the lowest risk level and G has the highest. Every new P2P investor has to answer the question, “What loan grades do I invest in?”

Understand the Risk: Who are My Borrowers?

Loan Grades and Home Ownership

The lower the grade, the more borrowers are renting their houses instead of mortgaging their houses.

Loan Grades and Work Experience

Work Experience doesn't vary much between different grades.

Loan Grades and Annual Income

Annual Income less than 50K has the lowest percentage rate in Grape A, which means that for Grade A loans, the borrowers are very like to have an annual income more than 50K.

Loan Grades and Loan Purpose

The loans with the purposes that are related to house, small business and unknown purpose are regarded as high risk loans. The loans related to credit card refinance are regarded as low risk loans.

Understand the Risk: What are the Purposes of the Loans?

Average Interest Rates and Average Loan Amount by Purpose