What we like:
Credit score education resources
|Rates (APR)||6.85% – 35.89%|
|Loan Terms||3 – 5 years|
|Loan Amounts||$1,000 – $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 who began servicing loans via an online interface. This trend has become somewhat of 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.
In this review:
- Applying for a LendingClub Personal Loan
- LendingClub Loan Rates, Terms, Fees, and Limits
- Benefits of a LendingClub Personal Loan
- Downsides to a LendingClub Personal Loan
Applying for a LendingClub Personal Loan
As one of the largest peer-to-peer lenders, LendingClub offers a full listing of different personal loans. These loans cover all sorts of purposes, ranging from credit card debt consolidation and home improvements to medical expenses and more. 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.
The online application triggers a soft credit inquiry so it doesn’t affect your credit report. Once you’ve filled out some basic information and LendingClub has done that soft inquiry, 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. 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.
LendingClub Loan Rates, Terms, Fees, and Limits
Like many other personal loan companies, LendingClub offers a wide range of annual percentage rates (APRs). The interest rates on LendingClub personal loans are heavily dependent on the applicant’s credit score; low credit scores have higher interest rates, while high credit scores typically qualify for lower interest rates. The APR range starts at 6.95% and ends at 35.89%. All interest rates on personal loans from LendingClub are fixed and not variable.
>> Read More: Personal loan interest rates
LendingClub offers two repayment terms: three years (36 months) or five years (60 months). Choosing the longer loan term generally warrants a larger fixed interest rate on a personal loan.
There is an origination fee with each loan that is also defined with a range. Once again, each origination fee is dependent on the size of the loan as well as your credit score. Origination fees range between 1% and 6%.
There are also a few penalties outlined by LendingClub for poor loan performance. There is a $15 penalty for an unsuccessful payment. Another $15 fee is charged for making a late payment, which is applied after a 15-day grace period. 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.
A borrower looking for a personal loan through LendingClub can qualify for any dollar amount between $1,000 and $40,000, and these personal loans can be used for any of the previously stated reasons.
Benefits of a LendingClub Personal Loan
As a premier online lender, there are a lot of benefits to choosing a LendingClub personal loan, including a 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.
If a borrower decides to pay off their personal loan early, there is no need to worry about prepayment penalties at LendingClub. For those who do not know, a prepayment penalty is sometimes applied when a borrower pays off a loan before its repayment term ends. Some companies charge this fee to make some money back on lost interest. At any rate, these worries are not present with LendingClub personal loans.
LendingClub also provides several resources to help the average borrower learn more about personal loans as well as credit scores. An entire page on the LendingClub website is devoted to credit score education. It covers all the basics when it comes to the importance and impact of a credit score; additionally, it describes the factors that define credit scores.
Another resource found on the website helps users figure out how much personal loan to apply for. There is a calculator that takes into account different types of debt, including each account’s APR, balance, and monthly payment amounts. This helps a potential borrower decide how much they need to help pay off this debt.
Trustpilot gives LendingClub a 4.3 rating, with most customer reviews providing positive testimony about their experiences as both borrowers and investors.
Downsides to a LendingClub Personal Loan
As with any other lender, there are a few downsides to working with LendingClub. These may or may not be high on your priority list, but it’s good to know about them up front.
The origination fee LendingClub charges is a large part of how it makes its money since 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.
>> Read More: Compare the best personal loans
In order to get an investor to approve your loan, chances are you’ll need very 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. Depending on what you’re using the loan for, getting it could be rather costly over the long term.
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.
If you have a steady job, excellent credit, 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.
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 94105.3.27 LendingClub Personal Loans
Author: Jeanette Perez
Personal Loans Information
Personal Loan Reviews