LendingClub Personal Loans Review for 2024

LendingClub offers peer-to-peer lending, meaning your personal loan is funded by individual investors contributing to your loan amount rather than borrowing money directly from the lender.

There’s no guarantee that your loan will be funded even if you meet the basic qualifications, but you will find out within a few days of applying. Having been in business since 2007, it’s one of the original peer-to-peer loan providers in the United States and also the largest.

Since its inception, LendingClub has originated a total of $50 billion in loans with over 3 million customers. Although the average borrower has good credit scores, it does offer various loan terms based on all types of credit scores.

There’s also a good deal of flexibility in what you use your LendingClub loan funds for. An important point to note is that because of the investor matching process, the application and funding process could take up to a week to complete.

Key Features of LendingClub Personal Loans

LendingClub offers personal loans ranging from $1,000 to $40,000. Borrowers can choose repayment terms between three and five years, providing flexibility to suit different financial situations. This range allows borrowers to tailor their loan according to their specific needs, whether it’s for a minor expense or a significant investment.

Fixed Interest Rates for Predictable Repayments

A standout feature of LendingClub loans is the fixed interest rate. This means that your monthly payments remain unchanged for the duration of the loan. The interest rates vary depending on your creditworthiness, starting as low as 6.95% for those with excellent credit, and can go up to 35.89%.

Understanding Fees and APR

In addition to the interest rate, LendingClub charges an origination fee, which ranges from 1% to 6% of the loan amount. This fee is factored into the Annual Percentage Rate (APR), resulting in an APR range of 5.99% to 34.34%. The exact rate depends on the loan’s grade and your chosen repayment term, emphasizing the importance of a thorough financial assessment before committing to a loan.

Balance Transfer Loans for Credit Card Debt

LendingClub has introduced balance transfer loans, an innovative solution for managing credit card debt. This option allows borrowers to use their personal loan funds to pay off balances on up to 12 credit cards, potentially reducing the amount paid in interest.

These debt consolidation loans have the same rates and terms as LendingClub’s standard personal loans. Borrowers can use LendingClub’s loan calculator to estimate their savings and decide if this option is suitable for consolidating their credit card debt.

Who typically qualifies for LendingClub loans?

Compared to some newer online lenders, LendingClub takes a more traditional approach and largely focuses on borrowers’ credit score and income rather than education or employment. The company’s stated minimum credit score is 600, but the average borrower actually boasts a credit score of 699.

You must have at least three years of credit history, so LendingClub personal loans are not necessarily geared towards young borrowers. Incomes are also relatively high, with the average salary at $76,135.

Not surprisingly, the average borrower’s debt-to-income ratio is low, coming in at just over 18% without including individuals’ mortgages. A LendingClub loan isn’t out of the question if you don’t meet these qualifications, but it is helpful to know what they’re looking for.


LendingClub Application Process

Applying for a loan with LendingClub begins with a straightforward step: checking your rate. This involves submitting some basic personal information. The beauty here is that LendingClub performs a soft credit check, which means it won’t impact your credit score. This initial step gives you a sneak peek at potential loan terms without any commitment.

Understanding Your Loan Offer

Based on your initial information, LendingClub assigns you a loan grade. This grade, along with your interest rate, origination fee, and APR (Annual Percentage Rate), shapes the loan offers you receive. You’ll likely see a few options, each with different rates and terms. This is where you can weigh your choices, looking closely at the monthly payments and loan duration.

Making the Right Choice

Once you select a loan offer, keep in mind that this doesn’t mean instant approval. LendingClub operates on a peer-to-peer model, which is quite different from traditional bank loans. Your selected offer is essentially a proposal to potential investors.

How Peer-to-Peer Lending Works

Your loan now enters a unique phase. LendingClub lists your loan request on its platform, allowing investors to review and decide if they want to fund it. While your personal details remain confidential, these investors can view your credit information and the purpose of your loan. The funding process is a bit like crowdsourcing; various investors can contribute to your loan.

Final Steps to Approval

If your loan garners enough interest and hits the 60% funding mark, LendingClub starts verifying your submitted details. This involves checking your identity and financials, so be prepared to provide documents like pay stubs or bank statements. At this stage, LendingClub will conduct a hard credit pull, which does have a minor effect on your credit score.

Receiving Your Funds

Once your loan is fully funded and all verifications are complete, the loan amount is finalized. If it doesn’t reach full funding, LendingClub offers the option to accept the funded portion and reapply for the remainder. Generally, the loan funds are disbursed to your bank account within four business days after verification.

Once You’re Approved

The cost of your origination fee is folded into your loan amount, so make sure you take that into account before deciding on how much you need to borrow.

For example, if you borrow $10,000 with a 4% origination fee, you’ll only actually receive $9,600. Give yourself a buffer to cover the origination fee if you need the full loan amount.

LendingClub doesn’t charge a prepayment penalty, but they do charge a few other fees in certain situations. For example, there is a $15 charge for unsuccessful payments, like if your check bounces.

If you don’t pay within the 15-day grace period, you’ll be charged a late payment fee of 5% of the overdue balance or $15, whichever is greater. Finally, if you decide to pay via check, you’ll be charged a $7 processing fee each time. Your funds should arrive in your bank account in about a week.

Lending Club’s History

Lending Club has been in the online lending business for over ten years and actually started off as a Facebook app. It actually helped pave the way for newer online lenders by registering with the SEC in 2008. Today, it’s a public company offering that not only offers home improvement and debt consolidation loans, but also car loan refinancing, business loans, and mortgage loans as well.

Lending Club Reviews

When evaluating LendingClub, it’s crucial to consider third-party reviews. These reviews offer genuine insights from customers, helping you understand their experiences. LendingClub’s A rating with the Better Business Bureau (BBB) highlights its strong customer service record and responsiveness to customer issues.

Additionally, exploring various review platforms can provide a broader perspective, showcasing different customer experiences and opinions. This research is essential in forming an informed opinion about LendingClub’s services and determining if they align with your financial needs.

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Is a personal loan from LendingClub right for you?

Before you apply for a loan with LendingClub, do a quick check-in with yourself to make sure it’s right for you. Getting a personal loan is a big decision. Make sure you’re informed and financially prepared for everything that comes along with taking out a personal loan, whether it’s through LendingClub or any other lender.

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