SoFi vs. LendingClub: Which Has the Better Personal Loan?

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sofi vs. lendingclub: which has the better personal loan?
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As leaders in the personal loan space, SoFi and LendingClub offer competitive rates and easy online applications.

But when it comes to SoFi personal loans versus LendingClub personal loans, does one lender come out ahead of the other?

Well, it comes down to your personal needs, including how much you want to borrow and what repayment terms you’d like.

Let’s take a closer look at SoFi and LendingClub personal loans so that you can decide which lender would be better for you.

SoFi vs. LendingClub personal loans: The basics

SoFi and LendingClub are online companies that offer personal loans to borrowers with strong credit, but they do so in different ways.

SoFi is a direct lender, while LendingClub is a peer-to-peer lender. When it comes to peer-to-peer lending, individual investors decide whether they want to fulfill your loan request, and then they provide the funds.

That said, your experience as a borrower will be similar with both SoFi and LendingClub. But the various personal loans these companies offer have some key differences.

Check out this chart for the full details of SoFi versus LendingClub personal loans.

SoFi personal loans

LendingClub personal loans

Loan amount

$5,000 – $100,000

$1,000 – $40,000

APR range

6.28% – 14.87%

5.99% – 35.89%

Repayment terms

3, 5, 6, or 7 years

3 or 5 years

Rate type

Fixed or variable, depending on where you live

Fixed rate only

Origination fee

0%

1% – 6%

Allows joint applications

Yes

Yes

Instant pre-qualification

Yes

Yes

Residency requirements

Lends everywhere but Mississippi

Lends everywhere but Iowa, Guam, and Puerto Rico

Extra benefits

Unemployment protection

Changing your due date; natural disaster support

SoFi and LendingClub offer competitive rates and flexible terms, but other features of their personal loans differ. Read on for a closer look at who would benefit from a SoFi personal loan and who would be better off sticking with LendingClub.

Choose SoFi if you can qualify for the lowest rates

SoFi personal loans have one clear advantage over LendingClub ones: They could come with lower interest rates. But not everyone will qualify for a low APR. Here are four circumstances when a SoFi personal loan might be the better option.

1. You have strong credit and can qualify for low rates

SoFi could offer you lower rates on a personal loan than LendingClub. Even its maximum APR is less than half that of a LendingClub personal loan as of June 18, 2018.

But you must have strong credit to qualify for a low rate. Otherwise, you might end up on the higher end of the range, which could cost you a lot in interest over the life of your loan.

For example, let’s say you took out $10,000 on a three-year repayment term. With a 6.00% rate, you would pay $952 in total interest. But if you had a 12.00% rate, you’d pay $1,957 in interest.

SoFi could potentially save you money with a lower rate, as well as no origination fee, compared to LendingClub. But you’d have to qualify for the low rate in the first place, so make sure to do a pre-qualification rate check with both lenders before assuming SoFi is the cheaper option.

2. You need to borrow more than $40,000

SoFi has another potential advantage over LendingClub when it comes to borrowing limits. While LendingClub caps its personal loans at $40,000, SoFi lets you borrow up to $100,000.

This could be useful if you’re financing a big expense or consolidating a great deal of debt. Of course, anyone should think twice before taking on a lot of debt.

Before borrowing such a large personal loan, make sure you’ve planned out the details of repayment. You can estimate your monthly payments with our personal loan calculator. This tool also reveals how much interest you’ll pay over the life of your loan.

Crunching the numbers before you borrow will help you avoid taking on more debt than you can manage.

3. You want a repayment term longer than 5 years

Besides having higher borrowing amounts, SoFi also allows for a longer repayment term of up to seven years. With a longer repayment term, you can lower your monthly bills.

For example, that $10,000 personal loan at a 6.00% rate would cost you $304 a month on a three-year plan. But on a seven-year plan, your monthly bills would go down to $146.

But you’ll also be in debt for longer. If you can pay the debt back faster, you’ll save money on interest.

Since SoFi doesn’t have any prepayment penalties, you could pay off your debt ahead of schedule, even if you initially choose a long term.

4. You want to be protected in case you lose your job

One unique benefit SoFi offers to borrowers is unemployment protection. If you lose your income, SoFi will pause your payments.

You can pause payments in three-month increments for up to a year. To qualify for this benefit, you must show that you applied for unemployment compensation.

You’ll also be expected to work with SoFi’s career coaching team to find a new position. This benefit could be a huge help if you run into financial hardship.

If you’re already worried about losing your job, you might want to avoid borrowing a personal loan until your income is more stable.

Visit SoFi

Choose LendingClub if you need a small personal loan and have a stable income

Although SoFi is useful for those looking to borrow a large personal loan, it doesn’t offer personal loans for less than $5,000. That’s why LendingClub would be better if you’re looking for a small loan. Here are three main reasons LendingClub might be best for you.

1. You want to borrow between $1,000 and $40,000

LendingClub lets you borrow a personal loan as small as $1,000 and as big as $40,000. This could be useful if you’re using a personal loan to pay for moving or a small home renovation.

Although LendingClub charges an origination fee, this charge might be minor if you’re not borrowing much. For instance, a 1% origination fee on a personal loan of $1,000 would only add $10 to your balance.

Since LendingClub is a peer-to-peer lender, you’ll likely see a variety of offers if you get approved. You’ll get funding in a few days after you select an offer.

2. You don’t need longer than 5 years to pay back your loan

A maximum repayment term of five years is typical for many personal loan lenders, and LendingClub is no different.

You can’t choose a longer term, but you can pay your loan off ahead of schedule with no penalty.

If you don’t need a term longer than five years, LendingClub could be a good option. If you’re borrowing a small loan, chances are you won’t need to extend your terms past five years anyway.

3. You’re not worried about losing your job

Unlike SoFi, LendingClub doesn’t offer forbearance if you lose your income. It does allow you to temporarily or permanently change your payment due date, but you’ll only be able to move it to a different day of the month.

LendingClub will also help if you’ve experienced a natural disaster. In this case, it will hold off on late-payment fees for at least 30 days. The lender will also notify the credit bureaus of your situation, so your credit shouldn’t be affected if you fall behind on your loan.

Apart from this support, LendingClub doesn’t offer protections for unemployment. Before choosing a LendingClub loan, consider whether you have a reliable source of income for paying it back.

Visit LendingClub

What to know before choosing a personal loan company

Although SoFi and LendingClub are great options for taking out a personal loan, they’re not the only lenders that could meet your needs. Before choosing one or the other, make sure to shop around and compare your rates.

Other companies, such as Upstart and Avant, also let you check your personal loan rates with no impact on your credit score. That way, you can compare your pre-qualification offers to see which has the lowest costs of borrowing.

Besides interest rates, watch out for any extra fees or eligibility requirements. You should also check out customer reviews to learn about firsthand experiences with the lender.

Finally, search for benefits, such as SoFi’s unemployment protection. These extra perks might be the deciding factor when it comes to choosing one lender over another.

SoFi vs. LendingClub personal loans: Which one is right for you?

In the contest between SoFi and LendingClub, there’s no clear winner. Both offer competitive rates to borrowers with strong credit. Plus, both let you apply with a co-borrower, which could boost your chances of qualifying if your credit is subpar.

Because SoFi and LendingClub are both good choices, choosing one comes down to your needs as a borrower.

If you’re looking to borrow a large personal loan with the option of a long payoff term, SoFi might be the right decision. But if you need less than $5,000, LendingClub could be the better option.

Your state of residency might also be a factor, as SoFi doesn’t lend in Mississippi, while LendingClub doesn’t operate in Iowa.

Either way, you should check your rates with both lenders and compare preliminary offers. Once you find the right one, you can submit a full application to get your loan.

Then you’ll be well on your way to using the best personal loans for meeting your financial goals, whether you’re looking to consolidate debt or finally start that renovation project to complete your dream home.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.58% APR to 14.87% APR (with AutoPay). Variable rates from 6.275% APR to 12.575% APR (with AutoPay). SoFi rate ranges are current as of July 16, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.275% APR assumes current 1-month LIBOR rate of 2.10% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.28% – 14.87%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.