Before being listed on LendingWell, each and every platform has to meet our extensive list of assessment criteria. Also, as LendingWell allows you to spread your investments across multiple platforms, it provides the potential for diversification of your portfolio spreading both credit and operational risk

1) Operational Risk

Operational Risk evaluates a business through various measures – including both specific and pervasive factors – that gauge a level of business risk a lender might be taking by having their investment with a given platform partner. These include assessment of, amongst other factors, internal controls, risk frameworks, profitability, business model, key staff, cash handling, and a set of integration criteria to ensure LendingWell can confidently and efficiently monitor its lenders’ investments.

2) Credit Risk

Credit Risk is defined by the ability of the platform to competently and correctly grade credit risk for a lender. Lenders rely on platforms to assign interest rates and thus price the loans they are purchasing, taking into account factors such as probability of default, prepayment probabilities, loss given default, macro variables, etc. As LendingWell offers its clients passive purchasing selection and therefore essentially outsources the credit risk proposition to its platform partners, it is vital that it fully assesses their underwriting, recoveries and risk assessment processes.

3) Investment Risk

LendingWell offers model strategies to lenders and plays a vital role in increasing the transparency of the marketplace lending product proposition.  To this end the final competency considered is investment risk covering an assessment of areas such as underlying security, cash handling, liquidity, and other safeguards to ensure products being considered meet standards of risk and reward to give confidence in the returns offered to investors.