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LendingClub is one of the most experienced non-bank personal lenders in the market. They’re the pioneer of the peer-to-peer (P2P) lending model. 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.
| Lending Partner | Best For | Min. Credit Score | Loan Amounts | APR Range |
|---|---|---|---|---|
LendingClub
Rating image, 4.0 out of 5 stars.
4.0 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. |
Best For: Low APR for borrowers with good to excellent credit scores | Min. Credit Score: 600 | Loan Amounts: $1k - $40k† | APR Range: 6.95 - 35.89% |
Full LendingClub review
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.
How to qualify for a LendingClub loan
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 personal loan amounts
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.
How to apply for a LendingClub personal loan
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.
Alternatives to consider
As I mentioned, it’s a smart idea to check your loan offers from a few personal lenders. You can do this without a hard credit pull, and you might be surprised at how much interest rate offers can vary. So, it’s advisable to at least consider some of our favorite personal lenders as potential alternatives.
Furthermore, while personal loans like those offered by LendingClub can be great, it may be a good idea to consider a credit card balance transfer offer if you have debt to consolidate and think that you’ll be able to pay it off within the next 18 months or so.
This personal loan is right for you if:
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.
About the Author
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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†APR disclosure:
Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6%; the average origination fee is 5.2% (as of 12/5/18 YTD). There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
††Funding in as few as 4 days:
Based on a majority of borrowers who were issued loans between January 1, 2018 to December 31, 2018. The time it will take to fund your loan may vary.
†††Soft Credit Pull:
Checking your rate generates a soft credit inquiry, which is visible only to you. A hard credit inquiry that may affect your credit score only appears when your loan is issued.
††††Loans made by WebBank:
All loans made by WebBank, Member FDIC.
