LendingClub Personal Loans Review: Options for Fair Credit and Better

LendingClub Personal Loans Review: Options for Fair Credit and Better article image.

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LendingClub is one of the first companies to use the peer-to-peer or marketplace approach to lending. Instead of originating loans itself, the company connects borrowers with investors who can fund their loans.

The company offers flexible loan amounts, but interest rates and fees may be too high for someone with good or excellent credit. Here's what to know before you consider applying for a loan with LendingClub.

May be available for some fair-credit borrowersCan take a while to get your money
Compare rate offers without hurting your creditHigh starting APR
Allows joint applicationsCharges an origination fee
LendingClub Customer Service 888-596-3157
LendingClub Corp.
Dept. 34268
P.O. Box 39000
San Francisco, CA 94139

Experian Review

LendingClub was launched in 2007 and was one of the pioneers of the peer-to-peer lending model. Borrowers can get between $1,000 and $40,000, which is funded by individual investors instead of the company itself.

You can choose between a 36-month and 60-month repayment term, which isn't as flexible as terms offered by other lenders but still offers plenty of time for payoff. If you get approved for a loan, the money will be deposited directly into your bank account as quickly as 44 hours later. With other lenders offering next-day or even same-day funding, this lag may not work for you if you need access to cash now.

There are some other features to consider as you compare LendingClub with other lenders, as well.

Convenient Debt Consolidation Options

LendingClub advertises loan options specifically for credit card debt consolidation and general debt consolidation. If that's your purpose for borrowing money, the lender may be able to make a payment directly to your existing creditors so you don't have to.

Depending on your credit profile, a debt consolidation loan may save you money by reducing your interest rate and making it easier to pay off your debt faster. The APR range offered on LendingClub loans is 8.30% - 36.00%, the lower end of which is smaller than the average credit card interest rate of about 16.6%.

But even if your interest rate on a new loan with LendingClub isn't significantly lower than what you're paying on your credit cards, the set repayment amounts and term can help give you more structure as you work to eliminate the balance.

How to Apply Online for a LendingClub Personal Loan

LendingClub offers quick approvals with an easy online application. To qualify, you must be a U.S. citizen or permanent resident, or be living in the U.S. on a valid long-term visa. You also need to be at least 18 years old with a verifiable bank account and live in any state or U.S. territory, with the exception of Washington, D.C.

You'll start with the prequalification process, which allows you to view and compare different offers based on a soft credit check. You'll provide the following information:

  • Full name
  • Date of birth
  • Address and contact information
  • Annual income

You'll then be able to view different rate offers based on a soft credit check, which won't impact your credit score.

If you don't prequalify, LendingClub may refer you to one of its partners, which may be able to match you with another lender.

Once you choose a loan offer from LendingClub, you may be asked to submit documents to prove your income, such as pay stubs, recent bank statements or a W-2 or 1099 form. You might also be asked to verify your address with a copy of your government-issued photo ID, lease agreement, utility bill or other accepted documents.

Depending on your financial situation and the source of your income, you may be asked for other documents to verify the information you've provided.

Who Is Eligible for a LendingClub Personal Loan?

To qualify for a personal loan with LendingClub, you'll need to meet several minimum borrower requirements, including:

  • Be a U.S. citizen, permanent resident or someone living in the U.S. on a valid, long-term visa
  • Be at least 18 years old
  • Have a verifiable bank account

The lender will also review other factors, including information on your application, your credit score and reports, and other details. Your best chance of scoring a low interest rate comes with a high credit score, a low debt-to-income ratio and a long history of successful credit lines.

If you can't get approved for a loan on your own or aren't happy with the interest rate you're offered, applying with a creditworthy joint applicant may improve your odds of getting approved with favorable terms.

Fixed Monthly Payments and Rates

LendingClub offers fixed interest rates and payments, so you don't have to worry about your monthly payment amount changing as market rates fluctuate. This is a contrast to personal loans with a variable interest rate that can change over time and possibly cause your monthly payment to rise or fall.

Because the risk of a variable rate is mostly shifted to the borrower—you pay more if interest rates go up—they typically start lower than fixed rates. However, if you're paying off a loan over three or five years, a fixed interest rate may be better because it provides more certainty over a long period.

Are There Any Added Fees?

LendingClub charges an origination fee that ranges from 3% to 6% of your loan amount. This fee is deducted from the amount you receive instead of being added to your loan amount, so you may need to borrow more than you actually need to account for it.

Your origination fee and annual percentage rate (APR) depend on your credit history and other information included in your application. The average LendingClub origination fee for the third quarter of 2019 was 4.86%.

LendingClub doesn't charge an application fee, brokerage fee or prepayment penalty. However, you may be charged a late fee of 5% of the payment amount ($15 minimum) if you're more than 15 days late on a loan payment.

Joint Loan Applications Available

Getting approved for a personal loan on your own can be challenging, especially if your credit score is close to a lender's minimum requirement.

With some other personal loan companies, it's not possible to apply with someone else if you can't get approved by yourself. But because LendingClub allows joint applicants, your joint applicant's good credit can help you gain approval or improve your offer.

Keep in mind, though, that a jointly held loan will be reflected on both parties' credit reports—including any missed payments. Also, your joint applicant will be responsible for making payments on the loan if you can't.

Additional Info

Loan amount: $1,000 - $40,000Origination fee: 3% - 6%
Estimated APR: 8.30% - 36.00%Late fee: 5% of the payment amount ($15 minimum)
Loan terms: 36 or 60 monthsPrepayment fee: None
Funds received: As little as 44 hours

Personal Loan Calculator

The information provided is for educational purposes only and should not be construed as financial advice. Experian cannot guarantee the accuracy of the results provided. Your lender may charge other fees which have not been factored in this calculation. These results, based on the information provided by you, represent an estimate and you should consult your own financial advisor regarding your particular needs.

Shop Around Before Picking a Personal Loan

LendingClub offers an easy online application process and may offer reasonable interest rates for people with qualifying credit. However, its starting interest rates are high compared with other lenders that market loans to borrowers with good credit or better.

Also, the lender's fastest funding time is 44 hours, compared with next-day or even same-day options with other personal loan companies. Finally, some personal lenders don't charge an origination fee, which can save you hundreds of dollars upfront over fees charged by LendingClub. Find out if you are matched to a LendingClub offer on Experian CreditMatchTM.

If you're considering a personal loan, especially if you have good or excellent credit, check your credit score and take time to research lenders based on where you stand. In addition to loan interest rates, also compare fees, funding times, customer satisfaction and other factors that matter most to you.