LendingClub helped pioneer online personal loans and peer-to-peer lending. The company matched borrowers to investors, which often meant a lower interest rate for borrowers of all credit types. Now, LendingClub operates like a traditional lender, but still offers reasonable rates and loan amounts to borrowers with fair, good, and excellent credit.
Best online experience
LendingClub was, at one time, a peer-to-peer lender. As such, it allowed investors to fund loans on a fractional basis and earn interest on their funds. Today, all LendingClub loans are made by LendingClub Bank, an FDIC-insured financial institution, though institutional investors can still purchase LendingClub loans.
Perhaps as a result of its original business model, the online experience with LendingClub is easy. Prequalification doesn't require a Social Security number (if you apply on the lender's site). And, according to internal Credible data, LendingClub has a good track record of approving applicants who prequalify for a loan. LendingClub also lets you take out a loan with a co-borrower. If you’re using the loan to pay debt, LendingClub can pay your creditors directly.
However, to qualify you'll need a credit score of at least 660, which means many fair-credit and all bad-credit applicants won't be approved. LendingClub also charges an origination fee of 3% to 8% of your loan amount, depending on your credit history.
Best online experience
LendingClub
4
Credible Rating
Est. APR
9.06 - 35.99%
Loan Amount
$1,000 to $40,000
Min. Credit Score
660
Pros and cons
More details
Learn More: How Do Personal Loans Affect Your Credit Score?
Debt consolidation loan
If you’re taking out a LendingClub personal loan to pay off credit cards or other debt, you may get a lower rate if you let LendingClub pay your creditors directly. The LendingClub balance transfer loan lets you pay off up to 12 different creditors, with any money left over deposited to your bank account.
More than two-thirds of LendingClub borrowers use their loans to refinance existing debt or to pay off their credit cards — a strategy that can boost your credit score.
The low rates available to borrowers with good credit can also make LendingClub personal loans a good choice for home improvement projects. Unlike a home equity loan, you don’t have to put your home up as collateral.
Learn More: What You Can Use a Personal Loan For
How to qualify
LendingClub makes loans for residents in all 50 states. To qualify, you must be at least 18 years old and either a U.S. citizen, a permanent resident, or an individual in the U.S. on a long-term visa. You’ll also need a verifiable bank account.
LendingClub considers your whole credit profile in evaluating your application, but the lender does require a minimum credit score of 660. However, you’ll get the best rate with a score of at least 670.
Here are some other factors LendingClub considers when evaluating your loan application:
- Debt-to-income ratio, or the percentage of your gross monthly income that goes toward debt payments
- Credit history, or how long you’ve had your oldest open account and the average age of all your open accounts
- Number of open accounts
- Usage and payment history on open accounts
- Recent credit activity, including new inquiries made within the past six months
Good to know
Strength in one factor can offset weakness in other factors as long as your letter grade is at least a D5. Applying with a joint applicant who has good credit can improve your chance of being approved.
Learn More: Personal Loan Requirements
Repayment
You can choose to repay your requested loan amount with a LendingClub personal loan over 2, 3, 4, or 5 years. As is the case with most lenders, you’ll be offered a lower rate on loans with a repayment term of three years. Spreading your payments out over five years will make your monthly payments more manageable, but you’ll pay more interest charges.
LendingClub accepts automatic payments or payment by check or phone. Borrowers are granted a 15-day grace period to make payments with no penalty.
Related:
How LendingClub compares to other lenders
Here’s how LendingClub compares to other similar Credible partner lenders:
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How to take out a personal loan with LendingClub
LendingClub can be a good match for borrowers with good credit who are interested in shopping around for the best rate.
You’ll need to have the following information and documentation handy when you apply:
- Name and contact information
- Social Security number
- Bank account information
- Proof of income and employment
What to consider before applying for a LendingClub personal loan
While LendingClub continues to be a major player in financial technology, you’ll want to consider the following before you apply for one of its loans:
- Funding can take a couple days: Many online lenders can now deliver loan funds as soon as the same or next business day. It usually takes LendingClub about two days to fund a loan.
- No loyalty discounts: Now that LendingClub is a bank, it could offer rate discounts to borrowers with a LendingClub checking or savings account. Many banks and credit unions offer discounts for being an existing customer.
- Charges an origination fee: Many lenders charge origination fees for processing a loan, but it’s possible to find lenders that don’t charge this fee.
LendingClub is a reputable lender backed by an FDIC-insured bank. But different borrowers have different needs, so it’s a good idea to request rates from several lenders to get a more complete picture of your options.
You can use Credible to request personalized rates from the best personal loan companies, including LendingClub. Credible’s process uses a soft credit inquiry that doesn’t affect your credit score when checking to see what rates you prequalify for, and you can see your rates in just minutes.
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Learn More: Personal Loans for Fair Credit
