When looking for a loan, it can be hard to decide who to trust with your money — especially among the many online lenders out there.
LendingClub is a safe lending service founded in 2006. One the largest online peer-to-peer lenders, it connects borrowers to online personal loans and business loans.
LendingClub Personal Loan
LendingClub offers loans of up to $40,000 as alternative to bank loans. Rates from 5.98%–35.89% APR based on your credit score.
- Recommended Credit Score: 660 or higher
- Min. Loan Amount: $1,000
- Max. Loan Amount: $40,000
- Loan Term: 3 to 5 years
- Turnaround Time: Up to 7 days
- Total Costs: Depends on your credit score
- Consolidate loans or pay off high interest debt
- Confidential and secure online application
Is LendingClub legit?
Yes, LendingClub is a legitimate lender that’s introduced people to potential investors for more than 10 years. LendingClub is available in every state except for West Virginia and Iowa.
Is applying for a loan with LendingClub safe?
Yes. LendingClub has a safe website that guards your personal and financial information throughout the life of your loan.
- A+ BBB rating. BBB accredited since 2008, LendingClub now has an A+ rating.
- 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.
- SSL encryption. This lender’s website is encrypted with Secure Sockets Layer (SSL) protection to safeguard your personal and financial information.
What to look out for
- 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.
- Higher APRs for poor credit. While you could be approved for a loan with poor credit, APRs can soar to 35.89%.
- Available in 48 states. LendingClub is not available in West Virginia or Iowa.
- Origination fees. LendingClub charges origination fees that range from 1% to 6% of your total loan amount.
- Personal check fee. LendingClub charges $7 to accept check payments.
- 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.
What makes LendingClub unique?
To access a loan through LendingClub, a credit score of 600 or higher and at least three years of credit history is recommended. Here’s what makes LendingClub stand out:
- Low APRs. Borrowers with excellent credit could be approved for an APR as low as 5.98%.
- Low minimum. You can borrow as little as $1,000 or as much as $40,000.
- Flexible loan terms. Repay your loan over three to five years.
- Unsecured personal loans. You don’t need collateral for any personal loan through LendingClub.
- Fast turnaround. If approved, you’ll typically receive your money the same day.
Was LendingClub involved in a scam?
Not exactly, but LendingClub hasn’t always followed the rules. Specifically the Federal Trade Commission (FTC) recently filed a complaint against the lender and the former CEO was forced to resign.
The FTC complaint
In April 2018, the FTC filed a complaint against LendingClub mainly 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 else do I need to know?
Most LendingClub customers claim to walk away happy. Currently, LendingClub has an A+ rating from the BBB and good ratings from multiple consumer review sites online.
But take reviews on any lender’s website with a grain of salt — even those who leave scathing reviews still somehow give LendingClub five stars. Users outside of LendingClub’s website report that customer service is sometimes lacking. If you choose LendingClub, be sure to budget for timely payments to avoid problems with your account.
LendingClub could be a good fit for people with established credit history who an alternative to a bank loan. But before you make any decision regarding a loan, make sure to compare all of your options and read the fine print.