Member Payment Dependent Note

AAA

DEFINITION of 'Member Payment Dependent Note'

A note that is issued by Lending Club. The income from these notes is used to make loans to club members. Member Payment Dependent Notes, issued in 2008, had an initial maturity of just three years and four business days and accrued interest from the date of their issuance. Payments are made monthly, and the loans have no underwriters and therefore no discounts from underwriters.

INVESTOPEDIA EXPLAINS 'Member Payment Dependent Note'

Member Payment Dependent Notes are highly speculative in nature and should only be purchased by aggressive investors who can absorb the loss of their entire investment. However, these notes also pay a very high rate of interest, ranging from about 7% to nearly 20%, depending upon various factors. Because of the lack of market for these notes during 2009, many investors purchasing this note were expected to hold the note to maturity.

RELATED TERMS
  1. Net Borrower

    An entity that borrows more than it saves or lends out. A net ...
  2. Note

    A financial security that generally has a longer term than a ...
  3. Retail Lender

    A lender who lends money to individuals rather than institutions. ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Payment

    The transfer of one form of good, service or financial asset ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
RELATED FAQS
  1. How can I use the correlation coefficient to predict returns in the stock market?

    Simple interest is most commonly seen in short-term loans, such as those from payday lenders or pawn shops. You might see ... Read Full Answer >>
  2. What is the difference between secured and unsecured debt?

    The difference between secured and unsecured debt is the presence or absence of collateral backing. Secured Debt For a debt ... Read Full Answer >>
  3. What are some examples of debt instruments?

    Individuals, businesses and governments use common types of debt instruments, such as loans, bonds and debentures, to raise ... Read Full Answer >>
  4. Is the prime rate in the US different from the federal funds rate?

    Although the prime rate and the federal funds rate are closely tied to one another, their base rates differ based on market ... Read Full Answer >>
  5. What is the difference between compounding interest and simple interest?

    Interest is the cost of borrowing money, where the borrower pays a fee to the owner for using the owner's money. The interest ... Read Full Answer >>
  6. Does shopping for the best interest rate affect my credit score?

    Shopping for interest rates does not necessarily affect a person's credit score. When a borrower submits an application to ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Promissory Notes: Not Your Average IOU

    These may be a handy way to borrow money, but this convenience does not come without risk.
  2. Options & Futures

    Payday Loans Don't Pay

    Hold too tightly to this rescue line and you'll soon be drowning in debt.
  3. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  4. Credit & Loans

    What is an Unsecured Loan?

    An unsecured loan is based on the creditworthiness of the borrower, and has no collateral securing the loan.
  5. Retirement

    The Purpose Of Having A Social Security Number

    When (and why) it is necessary to use the nine-digit number the United States government issues to individuals and when you should avoid it.
  6. Retirement

    Steps To Replace Or Update Your Social Security ID

    Investopedia's step-by-step guide to filling out the form that gets you a new or replacement Social Security card.
  7. Credit & Loans

    The Pros & Cons Of Personal Loans vs. Credit Cards

    One is not like the other. We help you decide where to borrow money from.
  8. Entrepreneurship

    What Is Microlending And How Does It Work?

    Microlending can produce great return on investment for the lender while benefiting borrowers who wouldn't otherwise secure funding.
  9. Credit & Loans

    Borrowing From LendUp: Better Than A Payday Loan?

    A new alternative to conventional payday loans is being offered in 16 states. How much better for consumers is LendUp really? Read on for details.
  10. Savings

    Why Do Credit Cards Expire?

    Credit cards expire for more reasons than you could imagine – including, so you don't forget you have the card.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center