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The Ultimate Guide To Lending Club Personal Loans

By: Heather Hanks Jan. 13, 2019

Lending Club is a well-known San Francisco-based lender that offers peer-to-peer personal loans. The company has been in business since 2007. Although they are not a bank, Lending Club allows you to borrow personal loans that range from $1,000 to $40,000 so that you can pay off your credit card debt, go on vacation, or finance a move across country. They offer unique features that include joint applications and an APR as low as 6.95% (if you have good credit). The company operates through a marketplace, so it might take up to seven business days for you to get your funds. Although this may seem a bit long, the good news is that you only need a FICO score of 600 to apply. Read on to learn more about Lending Club personal loans and whether or not they are right for you.

APR

6.95% to 35.89%

Loan Term

3 - 5 years

Loan amount range

$1,000 to $40,000

What is Lending Club?

According to their website, Lending Club advertises themselves as a technology company dedicated to delivering creative and better solutions to financial situations. Since 2007, they have been helping people take control of their debt, invest their finances and save money in the future, and grow their small businesses by offering personal loans and setting them up with lenders. They claim that they have helped more than two million customers borrow as much as $33 billion.

As a peer-to-peer lender, Lending Club connects borrowers to lenders instead of borrowing from a bank. They operate as a marketplace where borrowers get their funds from other consumers, businesses, and corporations. You can use a personal loan from Lending Club to refinance your credit card or student loan debt, make home improvements, or fund a vacation.

Lending Club is especially handy for debt consolidation. According to a 2007 survey, people who used Lending Club to consolidate their debt stated that their interest rate was 24% lower than the average rate on their outstanding credit cards or money owed.

In addition to lowering your interest rate, a personal loan can help turn several monthly payments into a one-time monthly fixed rate with a dedicated pay date. This means that you’ll never miss a payment again because all of your bills will be lumped into one flat rate fee that will never change, which makes it easier to remember to pay on time.

What Is A Lending Club Personal Loan?

Many different lenders offer personal loans, which are loans that you pay back over the course of several years at a monthly payment rate. They can be used for a variety of different reasons. For example, you can use a personal loan to consolidate your debt or pay off a large project. Lending Club is one of many lenders who can help you get a personal loan. It’s best suited for someone with good credit who doesn’t mind waiting up to a full week to get their money.

Lending Club requires that you have a minimum credit score of 600 to apply for their loan, which is substantially lower than most personal loan lenders. Research shows that the average borrower at Lending Club makes an average $76,000 yearly and has a credit score of around 700. These people have a debt-to-income ratio of 18%, not including their mortgage, and have 17 years of a credit history profile. The better your credit score is, the better your APR will be. Borrowers with excellent credit may qualify for an APR as low as 6.95%. Even if you don’t meet these requirements, it’s worth your time to look in to your options with Lending Club.

Furniture Financing companies

If you take out a loan with Lending Club, you’ll be able to pay your loan off early if you can. This will help you save on interest because there are no penalties for prepayments. Additionally, if you’re late on a payment, Lending Club will give you a 15 day grace period before charging you a late fee or penalizing your account. It’s best to allow Lending Club to automatically deduct your monthly payments from your bank account to avoid late fees. This is also a better option because Lending Club charges $7 for each check written to them. So you want to avoid writing checks for monthly payments and allow the company to automatically deduct from your account each month to avoid fees.

Lending Club also allows you to check your credit score without affecting it. This is beneficial for when you want to shop around for personal loans. Keep in mind that once you sign a contract with Lending Club, the company will do a hard credit check on you and this can affect your score. Lending Club will also report your credit history and experiences with you to the three major credit reporting agencies. This can help improve your credit score and chances of borrowing more money in the future. For this reason, you’ll want to make sure you pay on time every month as Lending Club will also report if you have missed payments and this can hurt your credit score.

Lending Club Personal Loan Key Highlights

If you have a good credit score, then Lending Club can help you qualify for a loan with a low-interest rate. Here are some key highlights of a Lending Club Personal loan

  • Loan amount ranges from $1,000 to $40,000
  • APR ranges from 6.95% to 35.89%, depending on your credit score
  • Late payment fee is applied after 15 day grace period in the amount of at least 5% of the monthly past due or $15, whichever is more
  • Origination fee ranges from 1% to 6%
  • There is a seven dollar check processing fee
  • There is no prepayment penalty fee, so you can pay your loan off earlier than your contract term if you would like
  • Returned payment/NSF fee of $15
  • Loan terms range from three to five years with monthly payments only
  • You have the option to make payments directly to creditors if you meet certain criteria (talk to your advisor at Lending Club about this option)
  • Required credit score is 600 but 640 or higher is recommended to apply
  • Turnaround time can be as quick as three days or as long as seven days
  • You can consolidate your loans or pay off a high interest debt
  • You’ll need a maximum debt-to-income ratio of 31% or lower
  • Online application

Lending Club doesn’t mention what type of loan history they are looking for, so be sure to inquire about this before you apply. Most lenders like to see that you have several years of a good credit history profile. If you don’t have a long credit history, then your next best bet is to have a good FICO score. You’ll want to have a FICO score of at least 600. The better your credit score, the more likely LendingClub will be to overlook a short credit history or penalize you for it by assigning your loan a high interest rate.

Checking your rates at LendingClub only requires a soft pull, which means that your credit score won’t be affected. However, keep in mind that to complete your application, Lending Club will do a hard pull on your credit and this can affect your score. For this reason, it’s a good idea to shop around first and only put in an application if you’re serious about taking out a personal loan with Lending Club.

Lending Club Personal Loan

You can check your estimated rate for a Lending Club Personal loan on the company’s site by entering your name, date of birth, salary and other details

Lending Club PROS & CONS

  • You can consolidate all your loans into a fixed rate monthly fee with a lower interest rate
  • Lending Club provides a 15 day grace period for late payments
  • Peer to peer lending, which means that Lending Club sources individual investors to fund your loan as opposed to banks (this makes the rates more affordable)
  • You may be able to pay your loan directly to the lender
  • You need a FICO score of at least 600, which is lower than what most lending companies require of you
  • Loan terms range from three to five years
  • You have the option to pay your loan off sooner than your contact and you won’t be charged prepayment fees
  • You can use your personal loan to pay off credit card or student loan debt, fund a major investment, or cover home repairs
  • No credit history defined, which means that you might be able to score a lower interest rate if you have good credit despite not having a long credit history
  • Fixed monthly payments so you always know ahead of time what and when you’re paying
  • Joint applications are available
  • Co-signers and co-borrowers are allowed
  • It can take up to seven days to receive your money (most lenders get your money to you within a day or two)
  • You need a debt to income ratio of 31%

How To Apply Lending Club Personal Loans

Eligibility requirements for a Lending Club personal loan include the following:

Age

You must be at least 18 years old

US resident

You must be a United States citizen, a permanent resident, or have an eligible Visa

Credit score

You must have a credit score of at least 600

Income

You must have a debt to income ratio of 31% or lower

It costs nothing to check out the rates at Lending Club. Doing so will require a soft pull into your credit history, but this won’t affect your score. It’s a good idea to apply for a loan only after you’re sure you want to take out a personal loan as Lending Club will need to do a hard pull on you and this may affect your credit.

When you’re ready to fill out an application, you can do so online by visiting the Lending Club website. You can check your rate by entering your personal information into the website, such as your name, address, birth date, yearly income and email address. After you provide this information, you’ll see several different loan options pop up. These offers should include your monthly payment amount, the total loan amount, how many years you have to pay it off, your APR and your interest rate.

Then, once you select the loan you want, you’ll have to provide your social security number, employment status, bank account information, and phone number. You’ll have to agree to the loan terms. Once you do this, Lending Club will do a hard pull on your credit to see your standings. Keep in mind that this can affect your credit score, which is why you should only apply if you’re serious about the loan. The entire application process will take about a week to complete. Once the loan is fully funded, the money will appear in your bank account usually within seven business days. Plan ahead if you need this money by a certain date.

Comparing Lending Club To Its Competitors

Because of its peer to peer functioning, a Lending Club loan is different from other lenders. This is because your loan is being funded by several different investors instead of a traditional loan from a financial institution such as a bank. You may want to shop around and compare your rates at other lenders to determine if Lending Club is right for you. Here is a list of some of Lending Club’s competitors and how they stack up.

Lending club vs Marcus by Goldman Sachs

Marcus by Goldman Sachs offers a personal loan without fees. Your interest rates are the only thing you’ll pay when you sign up with them. Interest rates at Marcus by Goldman Sachs are on par with what you’ll find at Lending Club. They also offer funds within five days as opposed to seven. Like Lending Club, you can check your rates with a soft pull so that your credit score isn’t affected. They also have a better origination fee then Lending Club. However, they require a higher credit score to be considered for a loan.

  • Required credit score of 640
  • 36 or 60 month loan term (same as Lending Club)
  • 6.95% to 35.9% APR
  • Origination fee of 2.41% to 5.00%
Lending club vs PayOFF

A Payoff personal loan allows you to consolidate your student loan debt into one monthly payment with a fixed interest rate. Payoff is a credit union, not a bank. Because of this, they work with lenders to originate their loans. There are no fees associated with Payoff aside from the origination fee and funding is available within two days. However, you need a credit score of at least 640 to apply.

  • Required credit score of 640
  • 24 or 60 month loan term (same as Lending Club)
  • 5.99% to 25.99% APR
  • Origination fee of 0% to 5.00%
Lending club vs Prosper

Like Lending Club, Prosper is a peer to peer lending institution with similar rates. They allow you to check your credit with a soft pull at first and then require a hard pull to finalize your application. The website indicates that you’ll get your money within five business days, which is about two days sooner than Lending Club.

  • Required credit score of 640
  • 36 or 60 month loan term (same as Lending Club)
  • 6.95% to 35.99% APR
  • Origination fee of 2.41% to 5.00%

Disclaimer

CreditNervana promises to keep our information as accurate and up-to-date as possible. However, you should always consult a financial advisor for specific questions about personal or business finances and investment opportunities, especially if you are looking in your area. Working with a trained professional who is familiar with your case is a safe and guaranteed way to make the best investment decision possible. Please review our terms and conditions before making any decision based on the information we provide. Financial institutions are constantly changing. Because of this, it’s a good idea to cross check the information you read here with any company you are considering working with.

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