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.

BREAKING DOWN '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. Investment Club

    A group of people who pool their money to make investments. Usually, ...
  2. Savings Club

    An account called a savings club requires regular deposits and ...
  3. Note

    A note is a financial security that generally has a longer term ...
  4. Loan Note

    An extended form of an IOU from one party to another that enables ...
  5. Anticipation Note

    A short-term obligation that is issued for temporary financing ...
  6. Equity Commitment Note - ECN

    A type of mandatory convertible bond issued by a bank or other ...
Related Articles
  1. Investing

    What You Learn at University Investment Clubs

    University investment clubs are where Wall Street and the classroom intersect.
  2. Investing

    The Benefits of an Investment Club

    Discover how investment clubs allow you to take control of your portfolio.
  3. Managing Wealth

    Finding the Right Yacht Club: A Quick Guide

    Everything you ever wanted to know about how to do a shipshape search for a yacht club.
  4. Tech

    Lending Club Announces Layoffs And More Founder Malpractices (LC)

    The fintech startup, which fired its founder earlier this year, announced layoffs due to lower loan volume and said that its former CEO and his family took out personal loans.
  5. Investing

    Lending Club to Announce Earnings Oct. 27 (LC, GS)

    Lending Club enters its second year as a publicly trading company, adjusting its risk management to stem losses.
  6. Investing

    Eyeing a Loan? Consider Skipping the Banks

    Peer-to-peer lending platforms, such as Lending Tree, Lending Club and Prosper, offer borrowers newfound leverage. Here's a look.
  7. Managing Wealth

    5 of the Best Yacht Clubs in San Francisco

    There are lots of avid sailors in the City by the Bay and plenty of clubs where they can gather, berth their yachts and participate in races.
  8. Investing

    4 of the Best Yacht Clubs in San Diego

    If you want to hang out with the man credited with boosting the profile of the America’s Cup, head to this California coastal city.
RELATED FAQS
  1. What does it mean to capitalize accrued interest?

    Understand what it means when a company capitalizes accrued interest. Learn what constitutes accrued interest and what constitutes ... Read Answer >>
Trading Center