LendingClub Review: High-Value Personal Loans for Borrowers With “Fair” Credit

On the market for a personal loan? Then LendingClub is one lender to have on your radar. Offering competitive loans for borrowers with fair to excellent credit, LendingClub makes it easy to apply online for a personal loan, and receive customized offers within minutes.
Whether you’re looking for funds to go back to school, consolidate debts, or even fund your next home improvement project, an unsecured personal loan from LendingClub might just be the way to go. Here’s a personal loan review that covers everything you need to know before applying for a loan with LendingClub.

What is LendingClub?

LendingClub Bank, more commonly referred to as LendingClub, has been historically known as one of the largest peer-to-peer lending networks in the world, previously allowing both borrowers and investors a unique way to borrow and earn money.
Since the company began in 2006, they’ve helped over 60 million borrowers secure personal loans, with a near-perfect 4.82-star rating. One of the best features for borrowers interested in LendingClub is that they work with those who have lower credit scores, offering personal loans of up to $40,000 to borrowers with minimum credit scores of 660 or higher.
Unlike traditional lenders, LendingClub supplies loans to borrowers via its network of investors, and most recently, via its partnership with Radius Bank— which it acquired in 2020. Since this acquisition with Radius Bank, things have changed a bit at LendingClub. The biggest of these changes is that the company is no longer issuing notes to existing investors or accepting new investors. This change doesn’t affect borrowers so much as it does would-be investors. That being said, LendingClub is still a great choice for borrowers (especially those with less than excellent credit) who need to take out a personal loan. Here’s why.

How do LendingClub personal loans work?

LendingClub makes it easy for borrowers with less-than-excellent credit to be approved for a personal loan of up to $40,000. These loans can be used for anything including home improvement projects, debt consolidation, or even credit card debt consolidation.
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To be approved for a personal loan from LendingClub, you’ll need to start by completing their online application, which can be done in minutes. You’ll be asked a series of simple questions that include things like if you’re applying alone or with a co-signer, your annual income, and how much money you’d like to borrow.
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After these questions, you’ll be asked to provide some personal information like your name and date of birth.
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Once you complete their short online questionnaire, you'll receive several loans offers to review. After selecting one, you can opt to have your loan transferred to your bank account‚ and the money should be available in just a few days.
One important thing to note is that completing LendingClub’s initial loan application will not affect your credit score in any way. The company initially conducts a soft pull on your credit (which won’t lower your score), and will only complete a hard pull credit check later in the process, by contacting various credit bureaus. This will only happen after you review your loan offers and decide to move forward with the application.
Hard pulls are standard practice when it comes to applying for a loan, and most major lenders will use them at some point during the application process. Once you’ve selected a loan offer from LendingClub, you’ll likely be asked to provide more financial information like proof of income and assets, as well as details regarding your existing debts (credit card, car, etc.). This is so the company can gain a clear understanding of your debt-to-income ratio, which is one of the ways lenders assess risk when approving potential borrowers for new loans. At this point in the process, you might expect to see a small drop in your credit score as the company conducts a hard pull to verify your credit history and score.

How much do LendingClub personal loans cost?

Like any other personal loan, LendingClub personal loans come with a wide range of interest rates and loan fees, depending on your financial profile and your desired loan amount. All personal loans provided by the company come with fixed rates— meaning, your interest rate will stay the same throughout the life of the loan. Current interest rates for LendingClub personal loans range between 8.05% to 35.89% APR (annual percentage rate).
If you’re wondering what these interest rates look like when applied to monthly payments for various loan amounts, here are a few examples provided by LendingClub.
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LendingClub fees

The company has a fairly straightforward fee structure, which I’ll cover here. While LendingClub doesn’t charge a prepayment penalty (ie. a fee for paying off your loan early) or a broker or loan-application fee, they do charge a one-time loan origination fee, which is 3 to 6% of your loan amount. The exact amount you pay for your loan origination fee will be determined by your credit report.
As far as late payment fees, LendingClub offers all of its members a 15-day grace period for late payments, after which you may be charged a late payment fee. The company also reports late payments to credit bureaus, which may harm your credit score.

LendingClub personal loan features

Personal loans for fair credit

If you have a credit score of 660 or higher, then you may qualify for a personal loan from LendingClub. While many lenders prefer to see higher credit scores, LendingClub allows even those borrowers with fair credit to obtain personal loans up to $40,000.

Easy online application

Applying online for a personal loan with LendingClub is easy. After completing their quick online questionnaire, you’ll receive several loan offers within minutes.

Minimal fees

The company’s fee structure is relatively straightforward, meaning you likely won’t be slammed by any unexpected expenses. They charge a one-time loan origination fee (3 to 6% of your loan amount) and may charge late payment fees if you fail to make a payment within 15 days of the due date. The company does not charge any sort of prepayment, broker, or loan application fees.

Who are LendingClub personal loans best for?

Those with “fair” credit

While many lenders exclude borrowers who have less than good credit (ie. a credit score between 670 - 739), LendingClub accepts borrowers with fair credit scores of 660 or higher.

Borrowers looking to consolidate debt

If you’re looking to borrow a personal loan to consolidate debt, LendingClub offers loans with competitive APRs that may help you get your debt payments back on track. The loan purpose doesn’t matter when borrowing with LendingClub, meaning you can use your loan for just about anything you’d like — from small business expenses to refinancing student loans or even consolidating credit card debt.

Those comfortable with online banking

Because LendingClub is an online-only lending platform, it’s best for borrowers who are comfortable with online banking. Who shouldn’t use LendingClub personal loans?

Borrowers who need loans greater than $40,000

If you’re looking to borrow a loan that amounts to more than $40,000, LendingClub isn’t the best option. Since the company specializes in loans up to this amount, those seeking larger loans are better off looking elsewhere.

Those with poor credit scores

If your credit score falls below 660, you likely won’t be approved for a loan with LendingClub. Since this is their minimum required credit score, you’re better off checking with other lenders if yours falls below 660.

Those who prefer brick-and-mortar banks

Because LendingClub is an online lender, it’s best for those who feel comfortable completing all of their transactions online and over the phone. If you prefer in-person banking experiences, LendingClub probably isn’t the lender for you.

Pros & cons

Pros
  • Quick & easy online application. The online LendingClub application is quick and easy to do and can be completed in a matter of minutes.
  • Fair credit scores accepted. Unlike other lenders, LendingClub accepts credit scores of 660 or higher.
  • Minimal fees. The company offers a straightforward fee structure, making it unlikely you’ll receive any unexpected fees.
  • Cosigners allowed. LendingClub loan terms allow for co-signers, which may help improve your loan offers.
Cons
  • High APR. The company doesn’t offer the lowest rates, with APRs between 8.05% to 35.89%. These are considered to be fairly high interest rates, and might even make repayment terms difficult for certain borrowers.
  • Fees. LendingClub charges a one-time loan origination fee between 3% - 6% of the value of your loan, and they also charge late payment fees.

LendingClub vs. competitors

Prosper

Prosper also offers personal loans on its peer-to-peer lending platform, with comparable interest rates of 6.95% to 35.99%. Borrowers using Prosper may apply for amounts between $2,000 and $40,000. The main difference between the two companies is that Prosper lends to borrowers with even lower credit— including scores of 640 and higher. They also charge more fees than LendingClub.

Sofi

If you’re looking for additional personal loan options, you might consider Sofi. This online lender offers personal loans up to $100,000 with lower rates that range from 6.11% to 18.85% APR. They also don’t charge any loan origination fees, prepayment fees, or late fees.

FAQs

Is LendingClub a good idea?
LendingClub is a great platform for borrowers with fair credit looking to take out personal loans up to $40,000.
Is LendingClub in trouble?
While LendingClub recently changed its investing protocol and transitioned from a fully peer-to-peer lending platform to a more traditional bank, the company is still going strong and providing personal loans to millions of borrowers.

The bottom line

Although no longer considered to be an exclusively peer-to-peer lender, LendingClub is still offering some great borrowing packages for those seeking high-value personal loans. While other lenders often have stricter minimum requirements and higher fees, LendingClub offers an easy way for even lower-credit borrowers to get the funding they need, with minimal fees and hassle.

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