- LendingClub is a peer-to-peer (P2P) lending marketplace, so other individuals will fund your loan rather than a bank or financial institution.
- LendingClub does charge loan origination fees (since most of the interest goes to investors), but you may still be able to get a competitive rate on your loan.
- LendingClub is best for fair-credit borrowers. If you have good or bad credit, other options may be better.
What we like:
Credit score education resources
|Rates (APR)||6.95% – 35.89%|
|Loan Terms||3 – 5 years|
|Loan Amounts||Up to $40,000|
|Fees||Origination fee: 1% – 6%|
Prepayment penalty: None
Late fee: Greater of $15 or 5% of payment after 15-day grace period
LendingClub was founded in 2006 and is now headquartered in San Francisco, California.
It was launched as part of a trend of technology companies that began servicing loans via an online interface instead of local bank branches—a trend that has become a staple in today’s peer-to-peer lending marketplace.
Since then, LendingClub has blossomed into an industry leader in peer-to-peer lending, fundraising more than a billion dollars in 2014 and securing its spot as the largest personal loan marketplace in the nation. This LendingClub review will help you decide if it’s the right option for you.
In this review:
- LendingClub personal loans: At a glance
- Pros & cons of a LendingClub personal loan
- Applying for a LendingClub personal loan
- Where to find LendingClub alternatives
LendingClub personal loans: At a glance
|LendingClub personal loans|
|Loan amounts||lendingclub-perl-46-amountlow – lendingclub-perl-46-amounthigh|
|Rates||lendingclub-perl-46-fixlow% – lendingclub-perl-46-fixhigh%|
|Late payment fee||lendingclub-perl-46-latefee|
|LendEDU rating||2.79 / 5.00|
LendingClub is a peer-to-peer lending platform, meaning that other individuals will be funding your loan rather than LendingClub itself.
Here is a list of what a potential borrower can receive from LendingClub:
- Credit Card Refinancing
- Debt Consolidation
- Home Improvement
- Major Purchases
- Auto Purchase
- Starting a Business
- Going on vacation
- Medical Expenses
That list isn’t all-inclusive, of course. One of the biggest benefits of peer-to-peer lending is that if you can make a solid case to investors for why you need the funds and they choose to take on your loan, you can do whatever you like with the money.
Based on our research, LendingClub’s personal loans tend to work best for fair-credit borrowers. If you have good credit, there are stronger options out there, and if you have bad credit, you’ll have a hard time convincing an investor to fund your loan.
But if your credit is just middle-of-the-road fair, the range of rates, term lengths, and loan amounts offered by LendingClub should be competitive for you.
Pros & cons of a LendingClub personal loan
- Quick and simple loan application process. The homepage has three simple questions with drop-down bars that lead to projected interest rates. The entire process takes only a few minutes. In addition, accepted applications often lead to loan disbursement in just a few days, which is a fairly quick turnaround in the personal loan industry.
- Prepayment allowed. If a borrower decides to pay off their personal loan early, there is no need to worry about prepayment penalties at LendingClub. Some companies charge this fee to make some money back on lost interest.
- Educational resources. LendingClub also provides several resources to help the average borrower learn more about personal loans as well as credit scores. For example, an entire page on the LendingClub website is devoted to credit score education.
- Good customer reviews. Trustpilot gives LendingClub a 4.3 rating, with most customer reviews providing positive testimony about their experiences as both borrowers and investors.
- P2P lending. Some borrowers like the fact that they’re paying interest to another individual, rather than a large bank that already has billions in its coffers.
- Origination fees. The origination fee LendingClub charges is a large part of how it makes its money, since the P2P investors get most of the interest you’ll pay on your loan. The fact LendingClub does charge an origination fee, however, puts it a bit behind other online lenders and can cut into your loan proceeds.
- Late payment fees. There is a penalty of lendingclub-perl-46-latefee for a late or unsuccessful payment, although this isn’t applied until after a 15-day grace period.
- Credit requirements. In order to get an investor to approve your loan, chances are you’ll need good credit. Although you can get a loan from LendingClub with less-than-perfect credit, if you do get approved, you’ll pay much more in interest.
- Self-employed individuals may have problems. LendingClub is known for its flexibility and easy application process, but if you have irregular annual income, such as through self-employment, you may find that LendingClub isn’t nearly as easy to work with.
- Paper check fees. For those who do not sign up for online or automated payments from your bank account, there is a $7 fee for processing paper checks.
Applying for a LendingClub Personal Loan
You can apply on LendingClub’s website in a matter of minutes by providing some basic information, such as your name, address, how much you need, and how you plan to use the money.
The online application triggers a soft credit inquiry, so it doesn’t affect your credit report. After that, you’ll receive a number of loan offers to choose from. Each one will show the loan amount, term, APR, and how much you can expect to pay each month.
You pick the loan package that best meets your needs, and then you’ll fill out the full application and provide any additional documentation required, such as bank account info. At this point, LendingClub will conduct a full credit check.
Once your loan is put into LendingClub’s marketplace, one or more investors can choose to back your loan request with funds. From beginning to end, the entire LendingClub loan process typically takes about seven business days.
Where to find LendingClub alternatives
If you have a steady job, fair credit (at least), and easily documented financials, then LendingClub is an excellent option for a personal loan. You’ll get your money quickly and enjoy solid customer service.
If, however, you have a bit more complex financial situation or prefer to talk to a banker face-to-face while working through the loan process, you may want to check out a more traditional lender. Our guide to the best personal loans can help you compare your options.
Want to see how LendingClub stacks up against other lenders? Check out these other guides:
- LendingClub Competitors & Alternatives
- LendingClub vs. Prosper Personal Loans
- LendingClub vs. SoFi Personal Loans
- LendingClub vs. Best Egg Personal Loans
How we rated LendingClub’s personal loans
LendingClub’s personal loans received a 2.79 / 5.00 as a fair credit loan. LendEDU rates personal loans based on the weighted average of multiple data points, which vary by credit category. You can read more about our methodology here.
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 94105.2.79 LendingClub Personal Loans
Author: Jeanette Perez
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