Editor's choice: LendingClub personal loans
- Less strict eligibility requirements
- Quick turnaround time
- High Trustpilot rating
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LendingClub is one of the largest peer-to-peer (P2P) lending marketplaces in the world. Its interest rates are low, and you’ll be funded by a variety of investors rather than just one lender. But there have been problems in the past, and you’ll still have to pay a high origination fee when you borrow.
LendingClub offers four types of loans:
The total cost of your loan will depend on both your interest rate and origination fee. These two factors make up your loan’s APR and are determined by your credit history, debt-to-income ratio, how much you borrow and the term you choose.
LendingClub’s origination fee can be anywhere from 1% to 6% for personal loans and 1.99% to 8.99% for business loans. This is deducted from your loan amount before you receive your funds. So if you borrow $10,000 with a 5% origination fee, you’ll only receive a loan of $9,500.
You won’t be on the hook for an application fee, brokerage fee or prepayment penalties. However, if you’re more than 15 days late on a payment, you may have to pay a fee of 5% of the amount due or $15 — whichever is greater. There’s also a check processing fee of $7 if you choose to pay by check rather than an automatic payment from your bank account.
After you find out what rates and terms you might qualify for, you can use our personal loan calculator to estimate the potential cost of your loan. Since LendingClub loans come with fixed interest rates, you won’t have to worry about your monthly payments changing over the life of your loan.
LendingClub doesn’t have the best reviews as of January 2019. While it’s been accredited with the Better Business Bureau (BBB) since 2008, it has a B rating due to government action being taken against the company. Over 280 people have left complaints about LendingClub, and it only earns 2 out of 5 stars based on nearly 150 BBB reviews.
It only has a handful of reviews on Trustpilot, with borrowers rating it either “Excellent” or “Bad” — not much in between. The only recent 5-star review complimented LendingClub for its efficiency. However, they also stated that they weren’t informed when the loan was finalized and instead had to rely on a manual check of their bank account.
Negative reviews revolve around LendingClub being misleading about what terms borrowers are eligible for, problems with account maintenance and high interest rates. One investor even stated their borrowers defaulted frequently and that the return on investment was bad.
Yes, LendingClub has been involved in couple of incidents over the past few years. These include a complaint against the company by the Federal Trade Commission (FTC) and the resignation of its cofounder and former CEO.
LendingClub responded by pointing out that it discloses its origination fees clearly on its website and chalking up the other two accusations to errors that affected a very small portion of the customer base and have since been corrected.
LendingClub’s founder and former CEO Renaud Laplanche was forced to step down in 2016 after it was discovered that he’d failed to disclose he’d invested in a fund that was purchasing LendingClub loans, a conflict of interest. After leaving LendingClub, Laplanche went on to cofound online lender Upgrade. LendingClub also sold $22 million in loans to an investment bank with documents containing falsified information (the loans didn’t meet some of the bank’s specifications).
The company took care of the issue itself and has been working to improve its transparency policies.
The application process varies by loan type, but here are general steps to apply:
If necessary, you may have to submit extra information about yourself in order to finalize your loan request. LendingClub will then work with its investors to find one or more that can fund your loan, which could take up to seven days. Once your loan is funded, you’ll be able to use it for whatever purpose you outlined in your application — and start working on paying it back.
To bring extra convenience to your loan, LendingClub allows you to take pictures of your documents from your cellphone. Start by making sure all documents are current and not expired, then follow these steps:
To apply for a LendingClub loan, you’ll need to meet some basic criteria:
For business loans and auto loan refinancing, you may be required to meet slightly different criteria — check our reviews to learn more.
LendingClub was founded in 2006 and has been in the forefront of peer-to-peer lending ever since. Despite a few bumps along the road — namely the recent resignation of its cofounder and CEO — it continues to lead the industry in P2P loans. And it’s even received multiple awards along the way:
LendingClub is a leader in the P2P industry and may be able to help you find a business loan, personal loan or medical loan as well as refinance your current auto loan. But with some scandals in its past and a relatively slow turnaround, you may want to consider your other options before moving forward.
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