LendingClub Personal Loans Review: Top Pick for Joint Loans, Low APRs

LendingClub is one of the most experienced non-bank personal lenders in the market. In fact, LendingClub has lent more than $44 billion to over 2.5 million customers since 2007. In this LendingClub personal loans review, we’ll see if they make sense for you.

Top perks

Soft credit pull: LendingClub allows potential borrowers to check their interest rate and loan terms without a hard credit pull, so it won’t affect your credit score to pre-qualify.

Loan amounts: LendingClub makes personal loans in amounts ranging from $1,000 to $40,000. This isn’t the widest range in the industry, especially on the top end, but a $1,000 personal loan can be difficult to find elsewhere.

Rates for borrowers with strong credit: With APRs starting at 6.95%, LendingClub could be a relatively inexpensive borrowing option for people with strong credit, especially if the loan is being used to consolidate high-interest credit card debt.

No prepayment penalty: LendingClub doesn’t charge prepayment penalties or application fees.

Loan terms: LendingClub offers personal loans with terms ranging from three to five years.

Transparent credit standards: Unlike many other personal lenders, LendingClub is quite transparent about its minimum credit qualifications, which we’ll discuss in detail later on.

Joint applicants: Most personal lenders don’t allow for joint applications, but LendingClub does, as long as one borrower meets its credit standards. The other applicant must meet other, more relaxed, standards, but this makes LendingClub a good choice for borrowers who need to apply with a cosigner.

What could be improved

Funding time: It takes a minimum of seven days to receive your loan proceeds. Because your loan comes from investors, and not the lender’s capital, LendingClub needs to find backers to fund your loan. While this isn’t necessarily a deal-breaker, it’s considerably longer than many other personal lenders take.

APR range: LendingClub’s personal loan APRs range from 6.95%-35.89%. While the low end is quite competitive, the high end of this range is among the highest in the industry.

Origination fees: LendingClub charges an origination fee ranging from 1%-6% of the loan amount, based on the borrower’s credit rating. To be clear, this is reflected in the APRs mentioned above. In contrast, many of LendingClub’s competitors don’t charge origination fees at all.

As I mentioned, LendingClub has specific minimum credit standards, including a minimum credit score of 600, at least three years of credit history, and a debt-to-income ratio of 40% or lower. In addition, LendingClub allows for joint applications, as long as one borrower meets the minimum standards.

While LendingClub has some of the looser credit standards in the industry, it’s important to realize that only borrowers with excellent credit will qualify for the best loan terms.

LendingClub makes personal loans ranging from $1,000 to $40,000. However, it’s important to realize that your qualifications need to justify the loan amount you request. In other words, even if you have excellent credit, you aren’t going to qualify for a certain loan amount unless your income and other debt obligations justify it.

You can apply for LendingClub’s personal loans directly on their website. As I mentioned earlier, you can check your interest rate and loan term options without affecting your credit score. If you decide to move forward, you’ll then choose the loan offer that suits you best and formally apply. (Note: Once you actually apply, a hard credit inquiry will be conducted.)

The application process is rather quick, but because of the nature of LendingClub’s business model, it can take some time before the money shows up in your bank account. LendingClub advertises that you can “get your money in as little as 7 days,” while several other lenders fund loans considerably faster.

In a nutshell, LendingClub personal loans make sense for borrowers with strong credit histories, stable employment, and a relatively low debt-to-income (DTI) ratio. LendingClub’s loan terms are quite competitive -- on the low end of its APR and origination fee ranges -- but in order to get the best terms, you’ll need top-notch credit and a low DTI.

It’s also worth pointing out that if you need to borrow more than $40,000, there are other lenders who could be better options. Some of our favorite personal lenders will make loans for as much as $100,000, so if you need a large loan, be sure to explore all of your options.

Finally, LendingClub can be an excellent option for borrowers who need to apply with a cosigner, or who want a joint account. For example, if you and your spouse both want to be responsible for the loan, that’s possible with a LendingClub personal loan, but isn’t available through many competitors.