Table 1. Variables used in the study.

Variable	Definition
Borrower Assessment
Grade	Lending Club categorizes borrowers into seven different loan grades from A down to G, A-grade being the safest
Subgrade	There are 35 loan subgrades in total for borrowers from A1 down to G5, A1-subgrade being the safest
Interest Rate	Interest rate on the loan
Loan Characteristics
Loan Purpose	14 loan purposes: wedding, credit card, car loan, major purchase, home improvement, debt consolidation, house, vacation, medical, moving, renewable energy, educational, small business, and other
Loan Amount	The listed amount of the loan applied for by the borrower
Borrower Characteristics
Annual Income	The annual income provided by the borrower during registration
Housing Situation	Own, rent and mortgage
Employment Length	The length of time (years) that workers have been with their current employer
Credit History
Credit History Length	Number of days of credit history considering the date when the borrower’s earliest reported credit line was opened
Delinquency 2 Years	The number of 30+ days past-due incidences of delinquency in the borrower's credit file for the past 2 years
Inquiries Last 6 Months	The number of inquiries by creditors during the past 6 months
Public Records	Number of derogatory public records
Revolving Utilization	Revolving line utilization rate, or the amount of credit the borrower is using relative to all available revolving credit.
Open Accounts	The number of open credit lines in the borrower's credit file
Months Since Last Delinquency	The number of months since the borrower’s last delinquency
Borrower Indebtedness
Loan Amount to Annual Income	Loan amount to annual income
Annual Instalment to Income	The annual payment owed by the borrower divided by the annual income provided by the borrower during registration
Debt to Income	Borrower's debt to income ratio. Monthly payments on the total debt obligations, excluding mortgage, divided by self-reported monthly income.