Direct Pay Loans enable borrowers to reduce existing outstanding debt at the same time they accept a loan through the LendingClub platform. The Direct Pay Loan pilot program was launched for a small new segment of borrowers who have debt-to-income ratios (DTI) of at least 30% but less than 35%.
The program enables certain borrowers to get a loan (a “Direct Pay Loan”) through LendingClub only if they use part of their loan proceeds to pay existing creditors directly. The “direct pay” feature requires a borrower to use up to 80% of their loan proceeds to pay off outstanding debt and may reduce the borrower’s DTI. Borrowers are still required to meet stringent credit criteria, including but not limited to strict credit score, income, DTI, credit history length and recent credit history standards.
If you are enrolled in Automated Investing, you can always customize your investment filters, including maximum DTI. For more information on how to update your Automated Investing filters, please click here. All investors can also browse loans listed on the LendingClub platform. Direct Pay Loans are identified by an asterisk next to DTI in the applicable loan listing. For API users, Direct Pay Loans will be categorized as “DIRECT_PAY” in the applicationType field of the Listed Loans API call.