LendingClub 2021 Review
LendingClub has been a top loan provider for borrowers with good to excellent credit since their founding in 2006. Through their peer-to-peer (P2P) marketplace lending, they have helped fund over $55 billion in loans.
Because of the many offers you receive through LendingClub, you can get lower interest rates through them than through a bank. This process is done entirely online, so you do not have to meet a representative face-to-face to receive your funds or discuss the loan terms.
To find out if you qualify, you can fill out an application at LendingClub.com. Your information is then evaluated and given a risk grade between A1 (the highest grade with the lowest APRs) and G5 (the lowest grade with the highest interest rates). This grade, that only investors can see, is given based on a combination of your credit score, credit history, employment, income, and your debt-to-income ratio. To find your credit score, LendingClub does a soft pull, which does not negatively affect your score.
You must meet the following requirements to qualify:
- A few hard inquiries are fine; however, too many recent hard credit inquiries are not favorable to lenders and look like you are regularly applying for credit.
- You should have an established credit history of at least 3 years. Average borrowers have 16 years of credit history.
- You should have good to excellent credit with a minimum FICO® score of 600.
- You must not have a debt to income ratio above 40%, which means your monthly bills must not be over 40% your monthly income. Mortgages are excluded from your monthly bill.
- You must be employed and verify your employment and income by providing proper documentation.
- Your income must be higher than the national household median of $55,775.
- You cannot have derogatory marks like late payments, missed payments, or collections, which automatically disqualifies you from the process.
LendingClub requires income and employment documentation like pay stubs, bank statements, W-2s, pension awards, 1099s, and income tax returns, all of which can be uploaded to LendingClub. You will need to enter your contact information, monthly rent or mortgage information, and employment. LendingClub may contact your employer to verify your employment.
If your application is approved, you are given a variety of loan offers. To continue with a loan offer, you need to provide the following information:
- Phone number
- Social Security number
- Whether you rent or own a home
- Employer name and address
- Employment situation
Once you choose a loan, investors review your financial profiles and loan grade before choosing if they want to extend a loan. At this point, LendingClub performs a hard inquiry, which knocks around 5 points off your credit score.
When everyone has agreed to the loan terms, the loan is approved, you provide your bank account information, and your funds are directly deposited into your account in a few days. The full loan application process takes around seven days, but it can take a longer or shorter amount of time, depending on how much documentation is required, how quickly it is uploaded, and how soon your bank can deposit your funds.
LendingClub uses WebBank, an FDIC-insured lender that provides usual bank consumer protection to borrowers.
LendingClub ensures that your privacy is respected, so they do not sell any of your personal information to third party websites for marketing purposes. Additionally, their investors do not know your identity and will lend to you anonymously.
Because you may want to take out more than one loan, LendingClub allows you to have two active personal loans at the same time, under the condition that you have paid one of your loans on-time for a year and fit the criteria to qualify for the second loan.
Phone: 888-596-3157 Hours: Monday – Friday 5am – 5pm PT Saturday 8am – 5pm PT
- Direct Lending: LendingClub is a peer-to-peer (P2P) lending platform that ensures investors lend money directly to you.
- Online Process: The lending is done fully online, meaning that you do not have to meet face-to-face with a lender or representative to receive your loan. Applications can be completed easily at LendingClub’s website and should only takes a few minutes.
- Competitive Rates: Depending on your credit score, interest rates can be very competitive. The better your credit score, the lower your interest rate.
- Pay Off Debts: Paying off your credit cards with a personal loan results in your credit score improving due the credit utilization dropping.
- Additional Perks: LendingClub offers some extra benefits for its customers: since 2014, those with excellent credit profiles receive a special low loan rate of 4.99% rather than the usual 5.99%.
- Joint Applications: Additionally, Lending Club added joint loan applications to make loan application and approval easier for couples, since couples generally pay off debt better than individual borrowers.
- Save Money: A personal loan through LendingClub can save you a good amount of money in the long run, especially if you use it to pay off credit card debt. Because your credit utilization is lowered, your credit score increases. On average, LendingClub borrowers see an increase of about 20 points around three months after getting a loan.
- LendingClub has strict guidelines when it comes to lending. Their customers generally have scores over 600, but if you have any late or missed payments or collections, you do not qualify.
- Processing the loan can a week or more if verification is required.
- If you have a degree in a growing field or a high-income career, you may be able to get better interest rates through other personal loan services like SoFi.
- LendingClub has an upfront fee that is taken out of the loan amount.
- LendingClub offers loans to 48 states. If you live in Iowa or West Virginia, you are ineligible.
- LendingClub offers personal loans from $1,000 to $40,000, business loans up to $300,000, and medical loans up to $50,000.
- APR ranges from 6.95% - 35.89%.
- Loan terms for fixed-rate loans are either 3 or 5 years.
- There are no application or prepayment fees.
- There is an origination fee between 2% - 6% of the loan amount.
- There is a personal check processing fee of $7.
- Late payments are given a 15 day grace period and is either 5% or $15 (whichever is greater).
- There is an unsuccessful payment fee of $15.
- For those who wish to file for a loan jointly, one borrower must have a minimum score of 600, while the other must have a minimum score of 540. Their debt-to-income ratio must be under 35%.
- Funds are available in around 4 days.
- If you have trouble making your payments, LendingClub extends a hardship plan, which lets you make interest-only payments for three months until you have a secure source of income.
If you have good or excellent credit and live in the eligible 48 states, LendingClub is a great option for a trusted, experienced lending marketplace.
Frequently Asked Questions
How does LendingClub compare to other lenders?
LendingClub is unique in the fact that their lending process takes place completely online peer-to-peer. They offer personal, business, and medical loans to those with good to excellent credit. They offer extra benefits like a lower loan rate of 4.99% for those with excellent credit and joint loan applications for couples.
How do I know if I qualify for LendingClub?
To qualify for LendingClub, you must have a minimum credit score of 600, an established credit history of at least three years, a low debt-to-income ratio, and no derogatory marks such as late payments, missed payments, or collections on your credit report. You must also be employed and have an income high than the national household median.
Can I use LendingClub to fund my college expenses?
LendingClub's personal loans can't be used to fund university or other secondary education expenses.
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|Credit Score Required||No published minimum, but most customers have a minimum of 600|
|Minimum Loan Amount||$1,000|
|Max Loan Amount||$40,000|
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