LendingClub Review – High-Value Personal Loans
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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 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.
In this article
What is LendingClub?
LendingClub is one of the largest peer-to-peer lending networks in the world.
One of the best features for borrowers interested in LendingClub is that they work with those with 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 via its partnership with Radius Bank— which it acquired in 2021. Things have changed a bit since this acquisition with Radius Bank 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.
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- $0 origination fees
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- $0 prepayment penalties
- One simple form
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 credit card debt consolidation.
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, including if you’re applying alone or with a co-signer, your annual income, and how much money you’d like to borrow.
After these questions, you’ll be asked to provide personal information like your name and date of birth.
Once you complete their short online questionnaire, you'll receive several loan offers to review. After selecting one, you can transfer your loan 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. 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 by contacting various credit bureaus later in the process. This will only happen after you review your loan offers and decide to proceed with the application.
Hard pulls are standard practice when 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 and details regarding your existing debts (credit card, car, etc.). This is so the company can understand your debt-to-income ratio clearly, 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 a small drop in your credit score as the company conducts a hard pull to verify your credit history and score.
Related: Best Personal Loans for Bad Credit
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 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 8.98% to 35.99% APR (annual percentage rate).
LendingClub fees
The company has a fairly straightforward fee structure, which I’ll cover here. While LendingClub doesn’t charge a prepayment penalty (i.e., a fee for paying off your loan early) or a broker or loan application fee, they charge a one-time loan origination fee of 3.00% to 8.00% of your loan amount. Your credit report will determine the exact amount you pay for your loan origination fee.
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.
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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 unexpected expenses. They charge a one-time loan origination fee (3% to 8% of your loan amount) and may charge late payment fees if you fail to pay within 15 days of the due date. The company charges no prepayment, broker, or loan application fees.
Related: Best Peer-to-Peer Lenders
Who are LendingClub personal loans best for?
Those with “fair” credit
While many lenders exclude borrowers with less than good credit (i.e. 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, so it’s best for borrowers 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 and 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 8.98% to 35.99%. These are considered 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% and 8% 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 8.99% to 35.99%. Borrowers using Prosper may apply for amounts between $2,000 and $50,000. The main difference between the two companies is that Prosper lends to borrowers with even lower credit— including scores of 640 and higher.
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 rates as low as 8.99% after discounts. They also don’t charge loan origination, prepayment, or late fees.
Read a full review on SoFi loans.
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.
Is LendingClub legit and safe?
LendingClub is an online-only banking platform that’s safe and easy to use for borrowers interested in taking out personal loans.
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The bottom line
Although no longer considered an exclusively peer-to-peer lender, LendingClub offers 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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Writer
Larissa Runkle divides her time between a cabin in the San Juan Mountains and traveling in a converted van with her partner and pup. She writes for finance, real estate, and lifestyle publications, and is also at work on several fiction projects.
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