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LendingClub was one of the OGs that started peer-to-peer lending, which acts as a matchmaker between borrowers and investors. The go-between lender was founded in 2007 and has facilitated more than $35 billion in loans.
While LendingClub screens potential borrowers and services the loans, the decision to lend falls squarely on their pool of investors. Behind the scenes, each borrower is assigned a grade based on credit and income data. Your grade then determines what interest rates you qualify for and helps investors decide whether or not to give your loan the green light.
Want to get in on this matchmaking? Before you say “I do,” make sure to read my in-depth analysis below for everything you need to know about LendingClub personal loans.
Advantages Of LendingClub
- It doesn’t hurt to ask. Applying online won’t affect your credit score because LendingClub uses a soft credit inquiry. However, before finalizing your loan, LendingClub will do a hard credit check, which can put a dent in your credit score. This last bit is standard for all lenders.
- No collateral needed. Great news if you don’t own a home, but still need access to larger sums of money at a low, fixed rate. Plus, it’s a lot quicker than traditional secured loans.
- Cosigners allowed. If you don’t think you can qualify for a competitive rate all on your own, LendingClub is one of the few providers that allows you to apply with a cosigner to give your application more weight.
- Fast and convenient. The whole process can be done at home, in front of your computer or on your mobile phone. You can even have the funds you requested in your bank account as soon as tomorrow or up to 7 days.
- Flexible fund use. From consolidating your credit cards to going on vacation or even renovating your home.
- Competitive fixed rates. From consolidating your credit cards to going on vacation or even renovating your home.
- No prepayment penalties. There’s no penalty for partially or fully paying off your loan before the scheduled due date.
- Rebuild your credit. LendingClub reports your payments to major credit reporting bureaus, so you can rebuild your credit by making on-time payments.
- Late payment grace period. LendingClub gives you a 15 days after your monthly payment due date before charging 5% or $15 in late fees. To avoid this, make sure to schedule automatic payments from your bank account.
Disadvantages Of LendingClub
- Borrowing not available in all states. This isn’t a big disadvantage as it only affects one state – Iowa.
- Not a student loan alternative. Like most other personal loan providers, LendingClub does not allow use of funds towards college or graduate school.
- Origination fee. LendingClub charges anywhere from 1% to 6% of your loan amount, which is deducted from your funds before it reaches your bank account.
- Check processing fee. LendingClub charges a check processing fee of $7. You can avoid this by making online or mobile payments directly from your bank account.
To qualify you must have a minimum credit score of 600, a minimum credit history of 3 years, and a debt-to-income ratio of less than 40% for all single applicants, 35% for all joint applicants.
|Origination||1-6%||One-time fee charged when you receive your loan.|
|APR||5.98%-35.89%||With no prepayment penalties.|
|Check Processing||$7||For each monthly payment made by check.|
|Late Payment||5% or $15||Once per each late payment, if your payment is more than 15 days late.|
|NSF/Returned Payment||$15||Per transaction.|
A LendingClub personal loan is a good option for borrowers with strong credit histories, who need up to $40,000 in funds, and can pay it all back in less than 5 years. The application process is fast and easy, with no collateral needed and cosigners welcomed. LendingClub’s fixed rates are competitive, and you can use your newly acquired funds for just about anything. There is no penalty if your monthly payment is late for up to 15 days or if you pay off your loan early.
Please keep in mind LendingClub’s origination fee of 1% to 6%, which is considered to be part of your loan. You have to pay this fee back to your investors even though the amount was deducted from your funds.
|Origination Fee (3.5%)||$350|
|Loan Term||48 months|
Lastly, sorry Iowans! LendingClub’s matchmaking service for borrowing is not available in your state.