This peer-to-peer lender is an established source for loans up to $40,000.
finder.com’s rating: 3.8 / 5.0
LendingClub is a San Francisco-based peer-to-peer lender that offers personal loans. Finding out your potential rate won’t affect your credit, and you may be eligible for a large unsecured personal loan with competitive rates.
|Product Name||LendingClub Personal Loan|
|Min Loan Amount||$1,000|
|Max. Loan Amount||$40,000|
|Interest Rate Type||Fixed|
|Minimum Loan Term||3 years|
|Maximum Loan Term||5 years|
|Requirements||You must be over 18 years of age, a permanent resident of the US or an American citizen, have a verifiable bank account and have a steady source of income.|
- No prepayment penalties
- Flexible loan terms
- Fast and easy application
- Unavailable to Iowa residents
- Higher rates for poor credit borrowers
- Check processing fee of $7 per payment
- A United States citizen or permanent resident, or living in the U.S. on a valid, long-term visa.
- At least 18 years old.
- The holder of a verifiable bank account.
First, do I qualify?
In order to qualify for a loan from LendingClub, you’ll need to meet some basic eligibility requirements:
- Good to excellent credit
- Have a working bank account
- Be a US citizen or permanent resident
- Be at least 18 years old
Residents of Iowa and West Virginia are not eligible for a loan from LendingClub.
How does a personal loan through LendingClub work?
LendingClub is a peer-to-peer lender that connects borrowers to investors, rather than funding the loan itself. Investors can range from individuals to corporations.
When you apply, you can check your rate and eligibility through a quick preapproval application that won’t affect your credit. From here, you can submit a full application. If approved, all you need to do is wait for investors to provide you with funds. Once your loan is funded, LendingClub transfers the money to your bank account. The process usually takes around seven days.
You can use the money for almost anything — the only restrictions are that you can’t use it for anything related to education after high school or for anything illegal. Repayments are automatically deducted from your bank account monthly, but you can also pay by check.
Keep in mind there is a $7 fee for the check option. You can partially or fully prepay your loan at any time without penalty.
What are the benefits of a LendingClub personal loan?
LendingClub’s personal loan offer competitive features that include:
- Rate quotes before applying. Before submitting your application, you can request an interest rate quote that won’t affect your credit score.
- Fixed payments. LendingClub personal loans come with a fixed rate, which means you pay a consistent monthly payment for the term of the loan.
- Flexible uses for funds. Use the loan for a range of needs, from consolidating your credit cards to going on vacation or even renovating your home.
- Cosigners welcome. Not sure you can qualify for a competitive rate on your own? LendingClub is one of the few personal loan providers that allows you to apply with a creditworthy cosigner to strengthen your application.
- No prepayment penalties. You can partly or fully pay off your loan before the scheduled due date without paying a prepayment penalty.
- Rebuild your credit. LendingClub reports your payments to the major credit reporting bureaus, so you can build up your credit history by making your payments on time.
- Available in 48 states. LendingClub is available everywhere but West Virginia and Iowa.
- FDIC insured. Your account cash balance is deposited at Wells Fargo Bank, an FDIC-insured institution.
- SEC registered. LendingClub became registered with the US Securities and Exchange Commission in 2008.
What to watch out for
- Relatively long turnaround. It can take some time to get connected with investors: Up to 7 days. In comparison, some direct online lenders providing funds in as little as one business day.
- Not a student loan alternative. Most personal loan providers don’t allow you to use your funds for college or grad school. LendingClub is no exception. You might want to check out private student loans instead.
- Origination fee. LendingClub personal loans come with an origination fee of 1% to 6% of the loan amount. This amount is deducted from your loan before it’s transferred into your bank account.
- Poser scams. It’s possible that individuals could pose as lenders on LendingClub’s platform. Remember that legitimate loans don’t require an upfront payment.
- Late fees. If you miss a payment due date, you could be hit with a fee of 5% of the unpaid installment or $15, whichever is greater.
How much will I pay for a personal loan through LendingClub?
Before signing any contract, confirm the APR — the interest rate plus any fees you pay — you are offered to get an idea of the true cost of your loan. When calculating your interest rate, LendingClub considers your “Loan Grade,” which is based on the information you supply in your application.
LendingClub Loan Grades range from A to G. Depending on this grade, you will pay a loan origination fee ranging from 1–6% of the loan amount and an APR ranging from 6.16%–35.89% .
Other fees to watch out for include a $15 returned payment fee and a late payment fee of 5% or $15. If you’re paying my check, you will also pay a $7 check processing fee for this payment method.
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Is LendingClub legit?
Was LendingClub involved in a scam?Not exactly, but LendingClub hasn’t always followed the rules. There have been two major controversies surrounding LendingClub’s loans in the past few years.
The FTC complaint
In April 2018, the FTC filed a complaint against LendingClub over its “no hidden fee” promise, claiming that it had charged hidden upfront fees on several of its loans. LendingClub responded by pointing out that it clearly states that its loans come with origination fees multiple times, several places on its website and when borrowers apply for a loan.
LendingClub’s CEO resignation
In March and April of 2016, LendClub’s founder and former CEO Renaud Laplanche stepped down after internal reports found that there had been about $22 million in loans sold to a single investor and failure to disclose possible conflicts of interest.
Although this had a major impact on LendingClub’s credibility, the company itself took appropriate measures to prevent fraud and account for false revenue. Because LendingClub resolved the issue internally and continues to work at increasing the transparency of its policies, this was not a scam. Rather, it was a problem with a single individual that the company handled quickly.
What do customers say about LendingClub?
LendingClub gets mixed online reviews, though the majority are negative as of July 2018. It gets an A- rating from the Better Business Bureau (BBB), which it’s been accredited with since 20018. The BBB bases its ratings on factors like how a business handles customer complaints and advertising practices — not reviews.
Out of the 109 customer reviews on LendingClub’s BBB page, only 33 are positive. On top of this, 254 customers have filed a complaint against LendingClub with the BBB. It does even worse on Trustpilot, earning a low 3.4 out of 10 based on 12 reviews.
Several customers complained about a complicated application process, managing their loan online, and high interest rates. A few customers were also disappointed that they’d gotten a preapproval letter in the mail but were ultimately rejected. The handful of positive reviews were written by customers who said applying was simple and easy, however.
What do I need to apply?
To apply for a personal loan with LendingClub, you’ll need to meet general eligibility requirements.
- You must be a US citizen, a permanent resident or in the US on a valid long-term visa.
- You must be at least 18 years old.
- You must have a valid bank account.
Personal loans are not available to residents of Iowa or West Virginia.
You’ll need to gather the following information before applying:
- Your name, contact information and date of birth.
- How much you want to borrow and the purpose of the loan.
- Your credit score range.
- Your annual individual income.
What are the steps to apply?
Before using LendingClub’s service, first make sure that you meet its basic requirements. To begin the process click the green Go to site button on this page.
- Enter your loan amount, your loan’s purpose and your estimated credit score before clicking Check Your Rate.
- Select whether you are choosing to apply alone of with someone else, then click Next.
- Fill out the required fields with your home address and annual income, clicking Next after each.
- If you’re preapproved, LendingClub will give you multiple loan offers. Select the offer that best fits your needs to apply for that loan.
- Follow the directions to fill out the rest of your application and submit any required documents. At this point, LendingClub will do a hard credit inquiry that will cause your credit score to drop a few points.
- Review, sign and submit your application.
- Wait for investors to fund your loan.
Once your loan is funded, you’ll typically receive the money directly into your account within four days. Overall, the whole process can take a week from start to finish.
How to get preapproved step-by-step
I got a preapproval letter from LendingClub. What does it mean?
It’s not uncommon for lenders to send out promotional letters to customers they think might qualify. These include potential rates and terms, based on a soft credit pull that has no effect on your credit score. You might have gotten a letter from LendingClub that looks like this:
While it’s likely legit, there are also preapproval scams out there. Before you hand over your personal information, reach out to LendingClub to make sure it’s real. Didn’t get a letter? Follow steps below to get an estimate of your rates.
Cover your medical expenses with LendingClub Patient Solutions
In addition to offering personal loans you can use for just about any expense, LendingClub also offers specialized medical loans directly through healthcare providers. They’re designed to cover expenses that insurance usually doesn’t cover.
Through patient solutions, you have two options:
|Plan||Procedures it covers||Loan amount||APR||Terms|
|Extended plan||Weight loss, fertility, dental and hair restoration||$2,000 – $50,000||3.99% – 24.99%||24 – 48 months|
|True no-interest plan||Hair restoration and dental||$499 – $32,000||0% for the first 6 – 24 months, then 29.99%||Starting at 6 months|
There are no application, origination or prepayment penalties and you have a short grace period of three to seven weeks before your repayments start.
You can find a healthcare provider near you that offers LendingClub Patient Solutions on its website.
I got a personal loan from LendingClub. Now what?
Now it’s time to keep up on repayments. Luckily, LendingClub offers automatic prepayments on a fixed monthly schedule. This service eliminates the need worry about making the due date each month, just be sure you have money in your account. If your payment is not successfully completed, there is a $15 fee.
While you can pay by check, there is an additional fee of $7 per payment. If you would like to pay via your bank account, but not automatically, you can do so without incurring extra charges.
You have a 15-day grace period if you need to get your payment in a little late, but LendingClub encourages you to call or email as soon as you know you’re going to have trouble making a payment. If you do not complete a payment within the 15-day grace period, a fee of $15 or 5.00% of the installment amount will be assessed (whichever is greater).
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Compare LendingClub to its top competitors
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LendingClub could be a good fit for those with an established credit history who want an alternative to a bank loan. Keep in mind that you may still be faced with high APRs and that LendingClub doesn’t have the perfect record, so comparing your options is a must. However, with large loan amounts and good terms available, LendingClub is still a competitive option for borrowers.
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