Tax Day is almost here. While some are banking on a refund for that sweet island (or Disney) vacation, others are hoping they don't owe Uncle Sam too much.
As seen in data from Lending Club ($LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.
RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.
But over the past five years, we've seen a small, yet significant, change in the amount of money loaned out during March and April, right as it dawns on millions of taxpayers just how much they owe the IRS.
A similar trend applies to the number of loans loaned out on the platform. While also taking the summer of 2015 to early 2016 as an outlier — this was right before and during a massive change for the peer-to-peer lending industry — we see a sizable increase in the number of loans taken out during several weeks of March and April compared to other weeks of the calendar year.
Of course, with a bit of financial planning (or a windfall), one may be able to avoid being in the surge of people having to take out loans on the peer-to-peer lending service. However, given the average lendee for this service has a credit score below 700, it's unfair to assume that people are able to avoid this cycle of needing cash after a rough tax year.