Is LendingClub legit or a scam? What you need to know | finder.com

Is LendingClub legit or a scam?

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 Personal Loan

LendingClub offers loans of up to $40,000 as alternative to bank loans. Rates from 5.99%–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.

    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 5.99%.
    • 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.

    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.

    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.

    Was LendingClub involved in a scam?

    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. Currently, LendingClub has an A+ rating from the BBB and good ratings from multiple consumer review sites online.

    What else do I need to know?

    Most LendingClub customers claim to walk away happy, 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.

    Bottom line

    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.

    Common questions about LendingClub

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    4 Responses

    1. Default Gravatar
      raySeptember 2, 2017

      what happens if the borrower is late or does not pay?

      • Default Gravatar
        SethSeptember 28, 2017

        I was qualified for 8000 I was told to buy itunes gift cards to verify income? I think I got scammed

      • Staff
        JhezelynOctober 1, 2017Staff

        Hi Seth,

        Thank you for your comment.

        Common scams run with the aim of getting access to your personal information. To protect yourself from scams, you must look for information and reviews online and be wary of unsolicited phone calls. You might find this page helpful on how to report a scam and who to report it to.

        Regards,
        Jhezelyn

      • Staff
        MariaSeptember 2, 2017Staff

        Hey Ray,

        In general, missed payments are recorded in your credit history and will lower your credit score while hurting your chances of obtaining new credit.

        If remain unpaid and overdue over 60 days, it can potentially become a “default”. The credit provider will find ways to contact you based on all the information you’ve provided and if you’re unreachable for 6 months and the debt is more than a certain amount, it will become a serious credit infringement. It’s possible that you’d be summoned to court to settle the debt and once a court judgement has been reached, it would be best to comply as a refusal can lead to the court issuing a warrant for your arrest.

        Also, all these listings can remain on your credit file for several years.

        You can read more about this on these pages:
        Credit Repair – How to Remove Black Marks and Defaults Against Your Name
        Guide to The Debt Collection Process
        Payday Loan Default Consequences

        I hope this helps.

        Cheers!
        Maria

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