Posts tagged: car loans

This Week in Car Buying: Top November deals; Ride the Jeep wave; Millennials …

More consumers approved for car loans

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  • Consumers are getting approved for car loans in larger numbers than ever since the recession, according to Experian Automotives most recent State of the Automotive Finance Market report.

    The group found that auto loans reached their highest levels, $968 billion, in the 3rd quarter of 2015, a growth of more than 53% since their low in 2010 and a $98 billion increase over the previous year.

    Continued growth in the automotive finance market is a clear sign of improved consumer confidence over the past few years, said Melinda Zabritski, Experians senior director of automotive finance, in a news release.

    Super prime consumers get a bump

    The largest increase in new auto loans went to those buyers with the best credit scores, so-called super prime consumers, increasing 8.3% over last year.

    If youre thinking of shopping for a car, first check your credit score for free at myBankrate.

    Do you have a thin credit file?

    There also was good news for consumers with below average credit scores. Those in the subprime and nonprime categories experienced increases of 7.8% and 7.7%, respectively, showing its getting easier to obtain car loans.

    Consumers who were late on their car payments also declined in the 3rd quarter of 2015. Delinquencies of 30 days dropped from 2.7% to 2.5% compared to the same time period a year earlier, while 60-day delinquencies dropped slightly from 0.74% to 0.73%.

    Before you buy, fix your credit before seeking a car loan.

    Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter  @SheDrives.

    Living: Car Financing Options For The Car Of Your Dreams

    Buying a new car is a huge investment and most of the time it is difficult for the average person to raise the full amount to buy the vehicle in cash. However, there are a couple of options for getting financing that you can choose from including:

    Taking out a personal loan

    Personal loans are one of the simplest ways to get financing to buy a car. The great thing about personal loans is that they take into account your personal income and financial status when coming up with the best loan terms. You can even spread your repayments into as many as seven years if you want to make smaller regular payments.

    The personal loan can be secured or unsecured depending on the type of loan it is. With secured loans, you need to give the lender collateral as a guarantee for the amount of money you borrow. Secured loans usually have lower interest rates than unsecured loans.

    Car loans

    Car loans are special types of personal loans where the vehicle that you are buying is the security for the loan. In case you fail to make your payments, the lender can repossess the vehicle and sell it off to clear the remaining loan amount. You can use car loans for as much as 100% financing to purchase the vehicle. There are some eligibility criteria for the vehicle that you are buying to be used as a security by the lender:

    • New cars are preferably expected to be brand new and purchased from a dealer. They usually attract a lower interest rate.
    • If you are buying a used car, it should be a certified pre-owned car.
    • You can also get a car loan for partial financing if you had saved up part of the total cost of the vehicle through secured loan minimums. This is referred to as borrowing a specific amount and not the vehicle purchase price.

    Credit cards

    You can also use your credit card to buy your vehicle on credit, especially when you want to borrow an amount lower than the loan minimums for most lenders. This is often the case when you need just a few extra bucks to pay off the vehicle but you do not want to get into a loan commitment.

    Car lease

    If you are not sure whether you want to keep the vehicle permanently or you only need to use it for a short period of time, then getting a car lease is the best option. A car lease is like renting the vehicle for a period and you have the option of buying it after the rental period is over.

    The great thing about leasing a car is you do not have to pay the full purchase price of the vehicle after the leasing duration is complete because the payments you have made will be taken to account.

    Car leasing is great for employees whose employers offer a salary package for getting a car through Novated leases. This also applies to businesses that do not want to tie up their capital in owning an asset that depreciates in value.

    For current news, sports, entertainment, politics and more please follow us at @TheInscriberMag and like us on Facebook: The Inscriber : Digital Magazine, and check out INSCMagazines new downloadble quarterly, #INSCMag at Magzter here!

    Uber signs $14 million car rental deal with South Africa’s WesBank

    JOHANNESBURG (Reuters) – Online taxi-hailing service Uber has agreed a 200 million rand ($14 million) deal with South African vehicle finance provider WesBank to rent cars to drivers who cant afford to buy them, the companies said on Tuesday.

    WesBank, which is an arm of lender FirstRand, will rent cars to Uber drivers who do not qualify for traditional car loans due to a lack of credit history.

    Around half of car loan applications are declined in South Africa, WesBank chief executive Chris de Kock told a news conference.

    WesBank will recoup the loan from the fares Uber drivers collect from passengers, lowering default risk, de Kock said. The amount drivers repay will depend on the level of business they are doing.

    Uber Technologies Inc, currently valued at over $50 billion, uses a free GPS-enabled app to link drivers from private car companies to passengers at cheaper rates and promises a quicker response time – often within 10 minutes.

    San Francisco-based Uber was launched in South Africa in August 2013 and operates in over 60 countries. Uber clocked 2 million rides in South Africa in the first six months of 2015, Uber said.

    FirstRands enterprise development group Vumela will educate drivers on running their own business and also provide cash to WesBank if car loans are not paid. It will also finance 20 million rand for the first 1,000 cars, Uber said.

    (Reporting by Zandi Shabalala; Editing by Joe Brock)

    Dozens Of Democrats Are About To Vote For Racial Discrimination At Car Dealerships

    WASHINGTON — Dozens of House Democrats are expected to vote this week in favor of legislationthat would open the door to racial discrimination in auto lending. The bill would make it easier for car dealerships to overcharge people of color.

    The NAACP, the National Urban League, the National Council of La Raza and the US Public Interest Research Group have all issued statements opposing the legislation.

    The bill would eliminate regulatory instructions, issued by the Consumer Financial Protection Bureau in 2013, that were designed to combat a longstanding pattern of people of color paying more for car loans than white customers with similar credit histories.

    Consumers should not have to pay more for a car loan simply based on their race, Richard Cordray, director of the CFPB, said when the guidance was first issued.

    Banks allow car dealerships to issue car loans to their customers. A dealer sends a buyers credit information to the bank, and then the bank tells the dealer the appropriate interest rate for a borrower with that particular financial profile. But dealers are given the authority to charge higher rates at their own discretion — and the dealers themselves receive a cut of that higher lending price.

    This arrangement creates incentives for both the dealership and the bank to inflate interest rates. Lawsuits dating back to the 1990s have shown not only that customers of color are more likely to be charged additional interest rates, known as markups, but that their markup rates tend to be higher than those charged to white borrowers.

    Car dealers and lenders are attacking the guidance because they do not want the CFPB to enforce antidiscrimination laws in car lending, the nonprofit group Americans for Financial Reform wrote in a September letter to lawmakers. They have known for decades that car dealer markups lead to discriminatory lending, and they would prefer the CFPB ignore this particular injustice.

    Racial discrimination in consumer lending, though illegal, has long been widespread. Both auto dealers and banks resisted the CFPBs effort to crack down on racist lending practices, as higher interest rates mean greater profits for both types of business. Banks and car dealers are particularly powerful interest groups on Capitol Hill, as both have a strong presence in nearly every congressional district.

    The CFPBs guidance encourages banks to get rid of the markup interest rate system as a way of compensating dealerships for issuing car loans. The CFPB said that banks could continue the markup practice if they took steps to ensure that they would not regularly overcharge borrowers based on race or national origin.

    The legislation could receive a vote on the House floor as early as Tuesday.

    The Obama administration released a statement late Monday condemning the bill, saying it would create confusion about the existing protections in place to prevent discriminatory auto loan pricing, and effectively block CFPB from issuing related guidance in the near-term.

    But Republicans have had remarkable success in recent years attaching bank deregulation items to must-pass spending bills. In 2014, Republicans secured a measure to reinstate federal subsidies for derivatives trades — the risky contracts at the heart of the 2008 financial meltdown. They did so by slipping the measure into a must-pass government funding bill. GOP leaders defended the move on the grounds that many Democrats had supported the provision on the House floor. Critical spending bills will come up for a vote before the years end.

    The bill to tear down the CFPBs regulatory efforts was written by a Republican, but 65 of its 166 co-sponsors are Democrats, and 13 of those Democrats are members of either the Congressional Black Caucus or the Congressional Hispanic Caucus.

    The legislations co-sponsors include Reps. Ed Perlmutter (D-Colo.), David Scott (D-Ga.), Brad Sherman (D-Calif.), Daniel T. Kildee (D-Mich.), Joyce Beatty (D-Ohio), Sanford Bishop Jr. (D-Ga.), Jim Cooper (D-Tenn.), Lois Frankel (D-Fla.), Ann Kuster (D-NH), Kyrsten Sinema (D-Ariz.), Kurt Schrader (D-Ore.), Tim Ryan (D-Ohio), Daniel Lipinski (D-Ill.), Tammy Duckworth (D-Ill.), Madeleine Bordallo (D-Guam), Patrick Murphy (D-Fla.), Brad Ashford (D-Neb.), Henry Cuellar (D-Texas), Frederica Wilson (D-Fla.), Gene Green (D-Fla.), Cheri Bustos (D-Ill.), Peter Welch (D-Vt.), Alcee Hastings (D-Fla.), Sheila Jackson Lee (D-Texas), Suzan DelBene (D-Wash.), Ruben Hinojosa (D-Texas), Steve Israel (D-NY), Eric Swalwell (D-Calif.), Ron Kind (D-Wis.), David Loebsack (D-Iowa), Loretta Sanchez (D-Calif.), Dina Titus (D-Nev.), Marc Veasay (D-Texas), Julia Brownley (D-Calif.), Juan Vargas (D-Calif.), Timothy Walz (D-Minn.), Filemon Vela (D-Texas), Michael Doyle (D-Pa.), Gerald Connolly (D-Va.), Bill Pascrell (D-NJ), Gwen Graham (D-Fla.), Derek Kilmer (D-Wash.), Kathleen Rice (D-NY), Robert Brady (D-Pa.), Joe Courtney (D-Conn.), Elizabeth Esty (D-Conn.), Tulsi Gabbard (D-Hawaii), Mark Takai (D- Hawaii), Jim Costa (D-Calif.), Collin Peterson (D-Minn.), Norma Torres (D-Calif.), Debbie Wasserman Schultz (D-Fla.), Mike Quigley (D-Ill.), Ted Lieu (D-Calif.), Beto ORourke (D-Texas), Ann Kirkpatrick (D-Ariz.), Jared Huffman (D-Calif.), Pete Aguilar (D-Calif.), Alan Grayson (D-Fla.), Kathy Castor (D-Fla.), Ablio Sires (D-NJ), Corrine Brown (D-Fla.), Donald Norcross (D-NJ), Sean Patrick Maloney (D-NY) and Sam Farr (D-Calif.).

    Zach Carter is The Huffington Posts senior political economy reporter and a co-host of the HuffPost Politics podcast So That Happened. Listen to the latest episode:

    Giving Veteran Entrepreneurs a Better Chance With Loans, Grants, and Good Advice

    By Steve Nicastro

    Opening your own business is always tough, but American veterans who become small-business owners have added challenges.

    Take Mark L. Rockefeller, who devoted nine years to serving his country. During this time, he moved every 18 months or so. Veterans often miss the credit stability and FICO benefit you get from having a lengthy mortgage that youve been paying off, says Rockefeller, the chief executive of Street Shares, a Virginia-based online lender that focuses on small-business loans for former service members.

    And veterans may not be able to lean on their spouses for financial support as they explore entrepreneurship.

    Oftentimes a spouse has to start his or her career over again each time they move. So they may not have established the same sort of spousal income that a [civilian] married couple might have, says James Schmeling, co-founder and managing director of Syracuse Universitys Institute for Veterans and Military Families.

    Despite the obstacles, about one in seven veterans is either self-employed or a small-business owner, according to a report by the IVMF. And vets do have something special to offer, notes Jim Salmon, vice president of business services at Navy Federal Credit Union and a Navy veteran. As entrepreneurs, they tend to come equipped with the ability to lead, think quickly and manage their time.

    If youre one of the many veterans who decide to start a business, youre in good company — and there are ways to make the process easier.

    4 tips to give veterans a leg up

    In honor of Veterans Day, here are four pointers veterans can use to get small-business funding and advice.

    Seek out guidance and training

    Start with the Veterans Business Outreach Center Program, which provides business training and mentoring at 15 locations throughout the country. You can also reach out to Score, a nonprofit association of volunteer business counselors who offer free business workshops and in-person appointments.

    In addition, the Institute for Veterans and Military Families at Syracuse University has education and training programs, including the Small Business Administrations Operation Boots to Business program, the Entrepreneurship Bootcamp for Veterans With Disabilities (EBV) and the Veteran Women Igniting the Spirit of Entrepreneurship program.

    Look for grants and contracts

    Street Shares rewards a $5,000 grant to a new veteran-owned small business each month. At the Department of Veterans Affairs VetBiz site, you can apply to become a certified veteran-owned small business, which makes you eligible to win federal contracts. Similarly, the Service-Disabled Veteran-Owned Small-Business Program can help you obtain sole-source government contracts of up to $5 million. Participants must own at least 51% of the business and have a service-connected disability. And the Veterans Entrepreneur Portal connects vets to federal, state and local financing programs, resources and opportunities.

    Improve your personal credit to boost your chances of getting a loan

    — Check for credit report errors: Request a free credit report from each of the three major credit bureaus — TransUnion, Equifax and Experian — once a year at AnnualCreditReport.com. If you find any errors, dispute them with the credit bureau.

    — Set up automatic bill pay: Set up automatic bill payments from your checks so that you pay off your most important bills — such as your mortgage, car loans and credit cards — first and on time, Rockefeller says.

    — Dont overuse credit: Try to keep your credit utilization ratio below 30%. In other words, the amount you owe on your credit cards should be 30% or less of your total available credit limit.

    Understand lender requirements

    Many lenders require collateral, a physical asset — such as real estate — that your lender can seize if you fail to repay your loan. Veterans often lack home equity to use as collateral for small-business loans, Rockefeller says. This makes it more difficult to obtain a loan at a low interest rate. Online lenders typically have looser restrictions than traditional banks, but their loans are often more expensive.

    Because of this, veterans looking for online financing should always research the lenders annual percentage rate, or the true cost of borrowing with fees and interest included. If a lender doesnt advertise it, ask for it. Also, be wary of merchant cash advances, which have APRs that typically range from 70% to 350%. Do your loan research. Youll be glad you did.

    Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

    Photo credit: iStock

    Is a refi for you? Low rates make refinancing mortgages popular

    Attractive rates and residential mortgage financing promotions helped to drive refinancing activity upward in 2015, but it might taper off in 2016 as fewer homeowners will want to take that financial option.

    While Wisconsin mortgage lending officials have yet to tally the results, local lenders say activity has been up this year.

    They attribute some of the activity to lower mortgage rates that have remained below 4 percent much of the year.

    For much of the year, the conventional 30-year, fixed mortgage rate has ranged from 3.65 percent in January to 3.75 percent. For qualified Veterans Affairs and Federal Housing Administration borrowers, rates can be even more attractive, say lenders.

    All of 2015 has been a strong year for refinancing, said Dee Dee Palmer, sales manager with Wintrust Mortgage.

    The advantages

    Who is most likely to refinance?

    Mostly the customers with higher interest rates or who have the opportunity to refinance for debt consolidation purposes, Palmer said.

    Many customers are taking this opportunity to combine a first and second mortgage into a new first mortgage with a lower rate and/or lower term. Some also take this opportunity to pay off credit card debt, pay off student loans, or home improvement.

    Homeowners are taking this opportunity to lower the rate and or term, convert an adjustable rate mortgage into fixed financing and take cash out of the equity in the property for debt consolidation, home improvement and education expenses.

    Refinancing activity at North Shore Bank represents 47 percent of the banks lending portfolio, according to Michael Kellman, senior vice president of consumer lending.

    Attractive packages

    While mortgage rates have been low, some lenders have taken an extra step to design special packages that may be even more appealing. In some cases, lenders are designing packages that may include several different term options.

    Homeowners are refinancing for a variety of reasons, said Kellman. A homeowner may have gotten a raise and think they can pay a little more, so they may want to reduce the term of their mortgage and save some of the interest.

    He noted that others may make adjustments because they plan to start a family. Then there are those who want to take some of their equity to pay for renovations such as a new bathroom or kitchen.

    10-year, 2.99 percent

    Some of North Shores attraction has come from refinancing tools such as a 2.99 percent 10-year mortgage product. While not a new product, it has drawn the attention of homeowners. Kellman said well over 1,000 customers have taken it.

    Its been a hot property lately, he said.

    Kenoshas Gateway Mortgage, for example, has a refinancing option that offers a homeowner choices of a 10-year mortgage at a 2.875 percent rate, a 15-year mortgage at a 3.0 percent rate, as well as 20- and 25-year mortgage products at slightly higher rates.

    Nationally, lenders expect to report residential refinancing activity totaled more than $630 billion in 2015, $128 billion more than a year ago, reports the Washington-based Mortgage Bankers Association.

    Refinance agreements represented 37 percent of mortgage banking activity, according to the MBA.

    Many variables in decision

    Is refinancing right for every homeowner?

    While online financing companies such as Quicken Loans and Lending Tree have streamlined the application process, refinancing is not an easy decision because there can be so many variables, say financial experts.

    Even the most savvy person might need the advice of a professional financial planner or lending officer.

    Refinancing is not a one-size-fits-all, said Kevin Deaton, a vice president with Gateway Mortgage, 1202 60th St. Homeowners have to assess their situations and determine whether it really makes sense for them to refinance.

    Although a homeowner may be able to refinance at a lower mortgage rate, the difference between the current rate and the new lower rate may not be great enough to make a difference.

    Time is a consideration, say financing experts. A homeowner who only plans to stay in a house for a few more years may not want to refinance.

    They must ask themselves how many years do they plan to stay in the home? Thats important because there are costs associated with refinancing, Deaton said.

    Someone who plans to sell within a few years may find that it might not be cost effective to refinance because they may not be in the home long enough to recoup the closing cost. They may want to put off refinancing and and save the money to spend on their new home.

    The closing costs can vary depending upon the borrowers credit score and credit profile. Homeowners with a good payment record are more likely to pay less than those who have a record of late payments.

    Other considerations:

    You may not be able to significantly lower your payment unless you move into an adjustable rate mortgage. An adjustable rate mortgage may initially have a low rate, but even with a yearly rate increase cap, it can rise significantly over the years.

    Moving from a 5 percent, 30-year fixed rate to a 4.5 percent, 30-year-fixed rate mortgage would not be substantial enough.

    The long-term costs may be too high. A homeowner, several years into a 30-year mortgage, has already paid a lot of interest and little of the principal. Refinancing into a 15-year mortgage could increase the monthly payment to a level he may not be able to afford.

    Refinancing: Two scenarios

    Lower mortgage rates and increased advertising by online lenders have brought refinancing to top of mind for some homeowners.

    While some homeowners are enticed by the mortgage rates that have dipped below 4 percent, others are considering refinancing to reduce the terms, lower the number of payments or the number of years they will have to pay their mortgages.

    Refinancing can allow a homeowner to use some of the accumulated equity to finance a college education, make home repairs, or even reduce household debt. It also can allow a homeowner to save tens of thousands of dollars in interest payments.

    Local mortgage lenders have been busy helping homeowners refinance for a variety of reasons.

    Here are two examples of homeowners who have refinanced their mortgages over the past three weeks.

    Scenario No. 1

    A homeowner has just refinanced a $341,508, 30-year, fixed-rate mortgage that will have him paying $1,886.46 monthly $149.46 more than he had been paying.

    However, he will save $104,086.63 during the life of the new 15-year, fixed-rate mortgage, according to Kevin Deaton, a vice president with Gateway Mortgage, 1202 60th St.

    The homeowner lowered the mortgage rate from 4.875 percent to 3 percent and lowered the number of payments from 292 to 180.

    Scenario No. 2

    A young seasonal worker knew the winter months brought fewer hours and smaller paychecks than during the peak periods of the year. In addition to his monthly $1,163 payment on a 30-year, fixed-rate mortgage, he paid $775 monthly on car and motorcycle loans.

    With 51 payments remaining on the car and 30 payments left on the motorcycle for more than $29,300, he wanted to stabilize his budget and reduce the number of bills he had to make during the lean months.

    Three years after buying the house for $115,000, the value increased to $184,000 through a combination of a market increase and renovations he made on the house. The homeowner, according to Mark Kuyawa, a mortgage banker with Fairway Independent Mortgage Corp., 7520 39th Ave., had significantly improved the value of his house.

    He wanted to use some of the equity to reduce his overall debt. Therefore, he elected to refinance to another 30-year, fixed-rate mortgage at 4.37 percent, slightly higher than his previous 4 percent rate. The monthly payment increased to $1,423. However he was able to reduce the number of bills and save $515 monthly, or $6,180 yearly. The new loan is now $147,000.

    It was his idea. He borrowed a percentage of the value and was able to reduce his overall debt. We sent the checks to pay off the vehicles and then we walked off with $5,300, a little money he can use as a cushion for later, Kuyawa said.

    Tips on refinancing your mortgage

    Record low interest rates are pushing people to consider refinancing their home mortgages. There are several reasons to consider refinancing your home:

    Lower monthly payment. With decreasing interest rates, you can lower your monthly payment and the amount you pay in interest over time on the amount of your mortgage. Once you refinance, its easy to want to refinance every time the interest rates drop. However, by doing so, in the long run you will end up paying more in closing costs. Consider only financing when you can save 2 percent or more in interest.

    Get a different type of loan. Your current mortgage may no longer be suitable or financially viable. For instance, if you have an adjustable rate mortgage, or ARM, you may want to switch to a fixed rate mortgage to lock in low interest rates.

    Rid yourself of a balloon payment. If your current mortgage requires payment of a large balloon payment at the end of a specified period of time, you may want to refinance and negotiate a different type of loan so youre no longer required to pay a balloon payment.

    Consolidate debt. Refinancing can help you consolidate some of your other debt into a home loan with a lower interest. Other types of debt such as car loans, credit card bills and school tuitions, typically have higher interest rates than home mortgages. These, as well as other types of debt, can be rolled into your home mortgage, allowing you to take advantage of the lower interest rates than what these loans have.

    Cash in on home equity. You may want to refinance in order to get cash out of your home equity for large expenditures such as a childs college tuition, home remodeling projects or a new car purchase.

    Source: TopConsumerReviews.com, an independent research and review organization

    This Week in Car Buying: Top November deals; Ride the Jeep wave; Millennials …







    Car loans reach $1 trillion for the first time

    Car buyers now owe $1 trillion on their car loans, the first time theyve ever owed that much.

    The loan balances have been driven up by a combination of three factors — strong car sales, rising car prices and low interest rates.

    Interest rates are low. Borrowers with top credit scores can get loans for less than 3%.

    There are a lot of lending choices for consumers, a lot more competition, said Jason Laky, automotive business leader at credit agency TransUnion, which reported the record level of car loans. Thats made financing more widely available and very attractive.

    New car sales are up nearly 6% so far this year, according to sales tracker Autodata.

    Overall, the industry is in a position to sell a record number of cars to US consumers this year.

    But the amount owed is up 11%, a sign of the increase in the size of car loans due to rising prices.

    The average amount borrowed is about $21,700, and buyers owe nearly $18,000 on average. The average new car purchase price now stands at $32,529, according to sales tracker TrueCar. The average car loan balance is rising faster than it is for mortgage loans, according to TransUnion.

    Laky said low interest rates and longer loan terms have kept the average payment little changed over the past five years. It now stands at just under $400 a month, and car buyers are able to handle their payments.

    Only about $9 billion of loans are 60 or more days past due; that is less than 1% of the loan volume. Such a low delinquency rate is better than the delinquency rates for mortgages and credit cards.

    Most car buyers have pretty good credit, and subprime loans make up only 15% of the loan volume.

    Falling unemployment and strong job growth in the past year are other factors helping to push car loan balances higher, Laky said.

    When Americans have jobs, theyre going to go out and purchase cars with confidence, he said.

    LendingClub Corp: All Good Things Come To Those Who Wait

    LendingClub Corp (NYSE:LC) is the worlds leading online market place connecting investors and borrowers. The entity is transforming the financial system to make investing more rewarding and credit more affordable. It operates at a lower cost than conventional bank lending programs and forwards the savings on to investors in the form of robust returns, and to borrowers by means of lower interest rates.

    Lending club matches borrowers in need for personal loans ranging from as low as $1,000. Additionally, the business has started to cater to small business loans and going forward, it wants to provide finances for mortgages and car loans.

    Business Finance News believes that ever since the debut of Lending Club, online lending has expanded at an substantial rate. The analysts are mainly bullish on the stock, as the corporation is well-positioned to take benefit of future opportunities. Out of a total of 19 analysts polled by Bloomberg, nine rated Lending Club stock as a Buy, eight recommend a Hold, while only two suggest a Sell. The 12-month consensus target price stands at $19.28, representing a return potential of about 51% over its last quoted price.

    On a separate note, after the announcement of Lending Clubs financial and operating results for the third-quarter of fiscal year 2015 (3QFY15), Pacific Crest analysts Josh Beck has reiterated an Overweight rating, along with the price objective of $23.

    In the earnings report, Lending club posted earnings per share (EPS) of $0.04, topping the analysts expectations of $0.02. Moreover, revenue came in at $116.28 million, surpassing the consensus estimate of $108 million.

    Lending Club made a blockbusting entry on the New York Stock Exchange (NYSE) with its Initial Public Offering (IPO) of 66.7 million shares at a price of $15. The company stock surged more than 56% in its first day of trading. However, the stock has lost approximately 50% of its value year-to-date (YTD), over fears of overvaluation and competition, whereas, Samp;P 500 Index has increased more than 2% over the same period.

    During the last 12 months, the companys enterprise value stood at $8,322.7, Net Debt of 3,516.4 million, and change in investing activities of $(2252.5). One can conclude from these figures that the stocks intrinsic value comes in at $6.78. This means that the stock trading in the market is currently over valued at its Fridays closing price of $12.72.

    Moreover, Relative Strength Index (RSI), which stands at 35.67, denotes that the stock is trading close to the over-sold region. A rank greater than 70 is considered to indicate over-bought, whereas, below 30 symbolizes over-sold.

    According to Reuters, US retail sales were below economists expectations in October. Economists on the Street forecasted sales to surge 0.3%, however, it increased by only 0.1% last month after remaining same in both August and September.

    On November 6, the Bureau of Labor Statistics broadcasted employment figures. The data recommended that an excess of 271,000 jobs were added in the national market, demonstrating a drop in unemployment. It is expected that the Federal Reserve will be increasing interest rates in December.

    Business Finance News believes that even if the rates go up, it is likely to be a small increment and will gradually increase. The increasing of the rates represent a growing economy. Moreover, as the retail data will move in an upward trajectory, Lending Club will be able to post outstanding results as it is well-positioned to take advantage of forthcoming opportunities.