What is LendingClub?
If you’ve ever looked for a loan on the internet, there’s a good chance you’ve heard of LendingClub. It is the largest online marketplace for loans. Since its launch in 2007, it has served over 2.5 million customers and helped them borrow over $42 billion. It offers personal loans, business loans, auto refinancing and financing for elective medical procedures.
LendingClub is based out of San Francisco. But it does not have any physical locations and handles everything online. What’s different about LendingClub is that it does not actually lend the money itself. Instead, it connects potential borrowers with others looking to make loans as an investment. This is known as peer-to-peer lending.
It’s type of lending has several advantages, but it’s not a great fit for everyone. Student Loan Hero has created this LendingClub loan review so that you can see the pros and cons of using its system.
LendingClub personal loan highlights
- Generates multiple lenders: If you qualify for a loan through LendingClub’s peer-to-peer platform, it will come up with multiple offers and the conditions: loan amount, term, APR, etc. You can pick your favorite one.
- Lower APRs from competition: The APRs for LendingClub loans range from 6.95% to 35.89%, which are decent APRs for personal loans. LendingClub claims that borrowers reduce their APR by 30% through using its platform over other lenders.
- Marketplace takes time to generate loans: It usually takes seven days to close a loan through the LendingClub platform, possibly longer if it needs to verify your documents. This is slower than companies that fund loans directly.
- No application or prepayment fees: LendingClub does not charge an application fee, so you can check offers without paying anything. If you pay off your LendingClub loan early, there is also no fee.
- Minimum credit requirement: 600
- Terms: 36 or 60 months
- Origination fee: 1.00% - 6.00%
LendingClub Personal Loan Details
LendingClub product details
LendingClub personal loans can be used for nearly every purpose. Some of its recommendations include for covering medical bills, home repairs, debt consolidation, paying for special events and making major purchases. For debt consolidation loans, LendingClub can pay off your existing debts. If there is any money left over, it’ll send the remainder to you.
There are only a few situations where it does not allow loans:
- Making an investment with the loan proceeds.
- Paying any type of educational expenses for after high school.
- Any type of illegal spending.
If you are worried about being able to qualify for LendingClub loans, it allows joint applications where another person agrees to co-borrow the amount. When you first apply, you need to pick a joint loan and enter the personal information of the other borrower.
Military service members and reservists who are called up to active duty could qualify for a reduced loan rate under the Servicemembers Civil Relief Act. If you took out a LendingClub personal loan and are called up to active duty, LendingClub will cap your loan APR at a maximum of 6%.
LendingClub’s strength is that it lets you compare multiple loans quickly and with no charge. But it is not the only way to shop around. Student Loan Hero also offers a personal loan marketplace. By comparing its quotes against LendingClub, you can make sure you get the best offer.
- Minimum credit score: 600
- Minimum credit history: Not listed. LendingClub states that to qualify for its best rates, applicants should have “a long history of credit with significant successful credit lines.”
- Maximum debt-to-income ratio: Ideally lower than 40%. This means less than 40% of your pretax income is going toward paying off other debts when you apply.
Besides credit history and debt-to-income ratio, LendingClub has a few more requirements for potential borrowers. First, it does not accept applicants who live in Iowa, Puerto Rico or Guam. You can apply from anywhere else in the United States.
You must be at least 18 to apply and have a verifiable bank account. Finally, you must be a U.S. citizen, a U.S. permanent resident or be living in the U.S. on a long-term visa.
While you do not have to be employed to qualify, LendingClub reviews your debt-to-income ratio to make a decision. You must have some type of income to meet this requirement.
Applying for a personal loan from LendingClub
Before officially applying for a personal loan from LendingClub, you can get a rate estimate online. You need to enter how much you’d like to borrow, the purpose of your loan, your income, your name and your date of birth. LendingClub will use this information to make a soft pull of your credit history, which will not impact your credit score.
With this information, LendingClub can determine whether you may qualify. If so, it will give you several offers from which to choose. If you accept one of the offers, LendingClub will then ask you to submit a loan application, with your Social Security number, work and contact information.
LendingClub will give you a to-do list to prepare for the loan, including asking for your email address and having you send documents to verify your identity, employment and/or income. It will also make a hard pull on your credit report, which can lower your score.
From there, LendingClub will search for investors to fill your loan offer. This can take time, which is why LendingClub typically takes seven days to fund a personal loan. After it finds the investors and completes the deal, LendingClub will transfer the funds to your bank account by direct deposit.
It will deduct the loan origination fee from your offer and you will receive whatever is left. For example, if you qualified for $10,000 and the origination fee is 2%, you will receive $9,800, and $200 will cover the fee.
Your first loan payment will be due within 30 days of you receiving the money. You can choose to make automatic payments from your bank account, send checks to LendingClub or make payments by phone after providing your bank account information.
Pros and Cons of a LendingClub Personal Loan
Who’s the best fit for a LendingClub personal loan?
If you are not in a rush to get your loan, LendingClub can help you track down a low rate. After you request a quote from LendingClub, it will give you several choices and you can pick the best one. Since LendingClub is completely online, it has lower costs than companies with physical branches. It claims to pass these savings onto customers and that borrowers can receive rates up to 30% lower than if they went elsewhere.
As you can imagine, the better your financial situation, the better your results will be with LendingClub. Its rates and fees are very competitive for borrowers with excellent credit as investors are eager to fund these high-quality loans. You can still qualify with a weaker score, as low as 600, though your APR and origination fee could be higher.
Now, this whole process takes time. LendingClub says it typically takes about seven days to finish everything, including funding. If you need money urgently, waiting for LendingClub to track down investors might take too long. Some companies that lend money directly can fund a loan within one to two business days.
If you have some time to spare though, it never hurts to get a quote through the LendingClub website. There’s no fee and no impact on your credit score, so why not see if it comes up with a good offer?
Alternative personal loan options
- APR: 16.05% – 35.99%
- Credit requirements: 0
- Terms: 24 to 60 months
- Origination fee: Varies
If you can’t qualify through LendingClub because of your credit score, you could try applying with OneMain Financial. It accepts applicants with lower credit scores and approves loans quickly. It can make a decision in 10 minutes and fund your loan by the next business day. But chances are you’ll pay a higher APR by borrowing with OneMain Financial. You also need to visit one of its branches in person to close the loan.
- APR: 5.99% – 29.99%
- Credit requirements: 600
- Terms: 36 or 60 months
- Origination fee: 1.00% - 5.00%
Peerform is another peer-to-peer lending platform, which connects you to investors looking to lend money. It can offer better rates than LendingClub for applicants with weaker credit scores. It can also fund loans as quickly as within a day. But if you have excellent credit, chances are you my get a better offer through LendingClub.
- APR: 9.95% – 35.99%
- Credit requirements: Varies
- Terms: 24 to 60 months
- Origination fee: Up to 4.75%
If you are in a hurry to get your loan funded, Avant could be a better option than LendingClub. Your loan proceeds can be sent out within a business day of your application. Avant’s personal loans go up to $35,000. It accepts borrowers with average credit, between 600 and 700. But its APRs can be higher than LendingClub, especially for borrowers with excellent credit scores. Avant branded credit products are issued by WebBank, member FDIC.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.75% – 16.24%1||$5,000 - $100,000|
|7.46% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|