Lending Club Personal Loans Review

Lending Club is an online provider of personal loans and other consumer finance products. It was founded in 2006 as a peer-to-peer (p2p) lender platform- a type of marketplace matching borrowers with investors willing to give them money. In 2020, it shut down its peer-to-peer lending platform and transitioned toward operating as a digital bank following its acquisition of Radius Bank. Prospective borrowers may benefit from competitive starting rates and flexible loan features, but may be turned off by potential origination fees.

Loan Options

• Lending Club offers unsecured personal loans between $1,000 and $60,000, with some states carrying higher minimum loan sizes.

• Loan lengths range from 2 to 7 years.

• Lending Club may allow coborrowers on loans, which could improve your chances of approval, as the legal responsibility to repay the loan will be shared by multiple people. Simply select "Two of Us" when prompted and enter some basic information about each borrower.

Interest & Fees

• APR: Lending Club personal loans have fixed rates from 5.96% to 35.99%.

• Origination Fee: Lending Club may charge an origination fee of 0%-8% of the approved loan amount, which will be automatically deducted from the loan proceeds.

• Prepayment Penalty: Borrowers do not incur any fees if they wish to pay off their loan early.

• Late Payment: Lending Club borrowers have a 15-day grace period to make a full payment before a late fee is charged (5% of the due payment or $15, whichever is greater).

• Discounts: Lending Club don't offer explicit discounts for directly paying creditors with the loan proceeds, but borrowers will likely receive better terms if they accept what they call a Direct Pay Loan. Lending Club allow you to add up to 12 creditors to pay, and they will send the money directly to them.

Geographical Availability

Lending Club accepts personal loan applications from residents of all 50 states and Washington DC.

Loan Eligibility

It is not officially stated on their website, but other third party sources suggest a minimum credit score of 600 to qualify for a Lending Club loan.

Income Requirements

No information on minimum income thresholds has been publicly disclosed.

Are they legit?

Yes. Lending Club was founded in 2006 and initially started out a peer-to-peer lender. In simple terms, Lending Club provided a platform to match prospective borrowers with parties that were willing to fund them. In 2020, Lending Club ceased operating its peer-to-peer lending platform and transitioned into a conventional bank with the acquisition of Radius Bank. Lending Club is a member of the Federal Deposit Insurance Corporation (FDIC) and is publicly listed on the New York Stock Exchange using the ticker LC.

Reviews & News

At the time of writing, Lending Club had approximately 88% 5-star reviews on Trustpilot from a total of just over 13k.

On their A+ accredited BBB profile, they have an average rating of 3.99/5, with just over 330 complaints closed in the last year.

Do They Report to the Credit Bureaus?

Yes. Lending Club report monthly snapshots of loan and payment status to the three major credit reporting agencies: Equifax, Experian and Transunion. Regular on-time payments in your credit file will likely increase your credit score and improve your chances of qualifying for credit in the future. However, failure to satisfy your repayment obligations could damage your credit score, making it more difficult to borrow again.

Get in touch

For customer support related to your personal loan, you can contact Lending Club at (888) 596-3157, which is available 5AM-5PM PST (Monday-Friday) and 8AM-5PM PST (Saturday/Sunday). Customers can also manage their account and send secure messages through the LendingClub website and mobile app.

What we like?

Loan Flexibility: Lending Club personal loans cater for all types of borrowers. With loans between $1,000 and $60,000, they can be used to overcome short-term emergencies, as well as fund longer-term projects. Unlike many competitors, Lending Club offer joint loans, which could improve your approval chances or land you a better rate.

Pay Creditors Directly: Many lenders don't provide the option to pay creditors directly, but Lending Club offer to pay up to 12 creditors with your loan proceeds. By restructuring your existing debt into a lower-cost personal loan, you can save significant amounts and/or accelerate your journey to becoming debt-free.

Check your Rate: Borrowers can check their rate on the Lending Club website and app, without any impact to their credit score. Even if you have an offer elsewhere, it might be worth seeing if Lending Club can beat it.

Resources: The Lending Club website has an array of educational content to help you understand credit and overcome expensive debt.

What we don't like?

Origination Fees: LendingClub may charge origination fees of up to 8% of the approved loan amount. While some borrowers may qualify for no origination fee, it is not clear how widely available those offers are. Origination fees are deducted from the loan proceeds before funding. For example, if you are approved for a $10,000 loan with a 5% origination fee, you'll only receive $9,500 in your bank account.

High Maximum APR: Although LendingClub's lowest advertised rates are competitive, borrowers with weaker credit profiles may still receive APRs up to 35.99%. That's noticeably higher than several prime-focused competitors, which often cap rates closer to the mid-20% range.

Summary

With flexible loan options and a prequalification process that won't impact your credit score, LendingClub are probably worth a look. However, depending on your credit profile, the combination of origination fees and potentially high APRs could mean you find better overall value elsewhere.