LendingClub 2023 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. The LendingClub Personal loan review will break down what you need to know about the lender.
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.
- 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 take 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.
- Low rates: 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.
- Strict requirements. 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.
- Slow funding. Processing the loan can take a week or more if verification is required.
- High rates. 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.
- Fees. LendingClub has an upfront fee that is taken out of the loan amount.
- Not available in all states. LendingClub offers loans to 48 states. If you live in Iowa or West Virginia, you are ineligible.
How does LendingClub work?
Previously, LendingClub operated as a peer-to-peer lending website. That means that it connected potential borrowers with individuals who wanted to invest in personal loans. While it no longer uses that business model, it continues to offer personal loans to its customers.
The site works much like other personal loan websites. You provide LendingClub with information about your desired loan, such as how much you wish to borrow, how long you need to pay it back, and why you need the loan. LendingClub then makes a lending decision and offers you terms to accept or decline.
If you accept, you receive the money and can repay LendingClub over the next few years.
LendingClub offers many types of personal loans.
You can use this loan to cover moving expenses as part of a transition to a new job or just when you’re moving to a new apartment or house.
This type of loan can pay for various wedding expenses, such as renting a venue or buying a wedding dress
You can use the funds from these loans to buy materials or hire contractors to repair or add improvements to your home
These loans are designed for unexpected bills, such as medical bills or car repair bills, and can help you avoid more expensive credit card debt
You can use a LendingClub personal loan to consolidate your other debts into a single loan. This can lower your interest rate and turn multiple monthly payments into one that is easier to manage
How to Qualify for a LendingClub Personal Loan?
As with any loan, you’ll need to convince LendingClub to approve your application. The lender usually looks at a few factors when making a lending decision.
The first is your credit score. The higher your score, the more likely it is that you’ll get approved. Higher scores also lead to lower interest rates. The minimum credit score is 600.
You also have to have sufficient income to be able to cover your monthly payment. The higher your income and the lower your existing debt, the better. Your debt-to-income ratio must be less than 40% to qualify.
You can improve your chances of qualifying by applying with a co-signer or co-applicant. LendingClub will consider both applicants’ credit and finances when making a decision.
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.
How to Apply for a LendingClub Personal Loan?
Applying for a LendingClub loan is relatively easy. It starts with filling out a form with some basic details about yourself and your desired loan. LendingClub will use this information to give you an interest rate quote.
Once you do that, you’ll see multiple offers that you can choose from. If one looks like a good deal, you can choose it and move on to the next step.
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 everything checks out, LendingClub will give you final approval and disburse the loan funds. It can take up to one week to receive the money.
Once you get the funds, you’ll start receiving bills and have to make regular payments toward the loan.
Terms & Requirements
To be eligible for a LendingClub loan, you must meet these requirements:
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.
If you’re approved, you can choose a repayment term of either 36 or 60 months.
- 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 are 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.
For Whom LendingClub is Good?
LendingClub is a good choice of lender for people who have strong credit scores. It offers low-cost loans for a variety of purposes and gives you some flexibility when it comes to things like repayment terms.
If you have poor credit or need to apply for a particularly large loan, you may need to consider an alternative.
LendingClub Personal Loan Alternatives
LendingClub is just one of many lenders out there. If you’re in the market for a personal loan, consider these alternatives:
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. Consumer Lending Club reviews for personal loans from the company are generally positive, so you can know you’ll be working with a good company.
Phone: 888-596-3157 Hours: Monday – Friday 5am – 5pm PT Saturday 8am – 5pm PT
Frequently Asked Questions
How does LendingClub compared 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.
Is LendingClub Legit?
Yes, LendingClub is a legitimate lender that offers personal loans online.
What credit score is needed to get a loan from LendingClub?
To qualify for a loan from LendingClub, you must have a minimum credit score of 600.
Does LendingClub affect credit score?
Yes, LendingClub’s loans will affect your credit. However, you can check your potential interest rate without a hard pull that impacts your score.
How hard is it to get a loan from LendingClub?
It’s not hard to get a loan from LendingClub, but having good credit and a low debt-to-income ratio will help.
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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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