LendingClub Personal Loans Review: Pros And Cons

Are you considering a personal loan to consolidate debt, finance a home improvement project, or cover an unexpected expense?

LendingClub, an online lending platform, offers a range of personal loans with competitive rates and flexible terms. 

In this comprehensive LendingClub review, we’ll explore LendingClub’s personal loans, the application process, user experiences, and performance evaluation to help you determine if this lender is the right fit for your financial needs.

Key Takeaways

• LendingClub offers competitive rates, flexible loan amounts, and co-borrowers accepted for personal loans.
• Securing a LendingClub loan involves prequalification with the potential to build credit through timely payments.
• Evaluations of LendingClub show positive ratings in affordability, underwriting, and customer experience. Borrowers should compare fees between lenders before investing.

Introducing LendingClub Personal Loans

LendingClub offers personal loans with a minimum credit score requirement of 600-640, and loan amounts range from $1,000 to $40,000, with APRs from 6.95% to 35.89%. These loans can be used for various purposes, including debt consolidation, home improvement, and medical expenses. 

LendingClub is an ideal choice for debt consolidation. It provides a rate discount and facilitates direct payment to creditors on consolidating personal loans issued there. The process is very helpful and efficient and you can now access your personal loans on their mobile app.

In addition to flexible loan amounts and competitive rates, LendingClub personal loans also accept co-borrowers for better rates and higher loan amounts. This can be especially helpful if your credit history isn’t strong enough to qualify for a loan on your own.

However, one should consider the fees associated with LendingClub personal loans, including the origination fee. Origination fees can range from 3% to 8%, and late-payment fees may impact your monthly payments. Keep these fees in mind when evaluating the overall cost of a LendingClub personal loan.

What Types of Personal Loans Does LendingClub Offer?

LendingClub offers unsecured personal loans. These are loans with fixed interest rates and terms of either 36 months or 60 months. LendingClub charges a loan origination fee ranging from 1% to 6% on its personal loans.

Proceeds from a LendingClub loan can be used for almost anything except gambling, investing, or higher education.

Securing Your LendingClub Loan - The Process

The application process for LendingClub loans is designed to be straightforward and user-friendly. It starts with prequalification, which involves a soft credit pull that won’t affect your credit score. Prequalification allows you to preview potential loan offers without committing to a hard credit inquiry.

Once you have previewed your loan offers and selected one that suits your needs, you can submit a formal application. LendingClub will review your application, and if approved, the loan funds will be deposited directly into your bank account.

If you’ve applied for a balance transfer loan to consolidate debt, LendingClub will forward the funds directly to the specified creditors, making the loan closing process even more convenient.

LendingClub is devoted to assisting borrowers with effective loan payment management. They report loan payments to all three major credit bureaus, meaning that on-time payments will contribute to building your credit score, while missed payments will have a detrimental effect.

Who Qualifies for a Personal Loan from LendingClub?

Anyone who borrows must be a U.S. citizen or permanent resident and at least 18 years old and have a valid bank account and Social Security number or FEIN. LendingClub also underwrites based on factors such as credit scores and debt-to-income ratios.

You may have a joint personal loan from LendingClub in which both borrowers can contribute towards the loan amount using income or credit score criteria.

Right now, the minimum credit score for a borrower is 640, with a maximum debt-to-income ratio of 30%. These requirements may fluctuate from time to time, but the average LendingClub borrower has a credit score of 700.

User Experience with LendingClub

Customers generally have a positive experience with LendingClub, as evidenced by their 4.8-star rating on Trustpilot. Some reasons why customers appreciate LendingClub include:

• Easy application process
• Fast funding times
• Helpful support tools and resources through their Member Center, assisting customers in managing their finances and credit.

Nonetheless, some borrowers express dissatisfaction with the fees linked to LendingClub personal loans, as well as a lack of flexibility in their monthly payment and extensions. Being mindful of these potential downsides is key when considering a LendingClub personal loan.

Despite these drawbacks, LendingClub’s overall positive user experience and commitment to transparency make it a viable option for borrowers seeking a personal loan.

Understanding the Loan Terms

LendingClub personal loans carry origination fees of up to 6%, significantly contributing to your total loan cost. Also worth considering are late payment fees should you miss a payment on your loan. Being cognizant of these fees and incorporating them into your decision-making process is crucial when assessing if a LendingClub personal loan suits your needs.

Loan terms for LendingClub personal loans range from 24 to 60 months, providing flexibility to borrowers in selecting a repayment term that fits their financial situation. Furthermore, LendingClub allows borrowers to pay off their loans early without any prepayment penalties, offering even more flexibility in managing loan repayment.

Evaluating LendingClub's Performance

LendingClub’s performance is evaluated based on factors such as:

• Affordability
• Underwriting
• Loan flexibility
• Transparency
• Customer experience

They generally receive positive ratings in these categories, indicating strong performance in the personal loan market.

Their loan details, including loan approval, feature:

• available loan amounts
• repayment terms
• APR ranges
• applicable fees

These details are all taken into account during the evaluation and loan process. Additionally, LendingClub’s prequalification options and mobile applications contribute to their overall performance in the personal loan market.

LendingClub’s commitment to providing borrowers with flexible loan options, competitive rates, and transparent terms makes them a strong contender in the personal loan space. Their excellent credit and performance evaluation demonstrates that they are a viable option for borrowers.

Time to Funding

LendingClub personal loans are generally funded within five business days, which is comparatively quick among lenders. Nonetheless, you should routinely check your loan status and provide any required documents to facilitate a smooth and punctual funding process with Lending Club, ensuring you can access your loan early if needed.

While the time to funding for LendingClub personal loans is generally quick, some borrowers have reported delayed disbursement and slower lending credit approval processes. Understanding the potential for delays can help you plan accordingly if you’re seeking a personal loan from LendingClub.

Is There Any Concerning Fine Print on LendingClub’s Personal Loans?

Borrowers considering loans from LendingClub should carefully consider two particular areas of concern.

First, LendingClub charges a hefty origination fee. This fee is baked into the APR of the loan, but people who want to pay off the debt faster pay a higher effective interest rate when they pay origination fees. If possible, it’s better to work with a lender that doesn’t charge an origination fee.

The other area of concern has to do with joint borrowing or co-signing loans. Co-signing a loan is always risky, and it’s not something that should be considered lightly. If the primary borrower defaults on the loan, you’re on the hook to pay it off, and your credit score will get dragged through the dirt too.

In general, we advise against co-borrowing except spouses with joint finances (and even then, typically only joint mortgage borrowing makes sense).

If your payment is more than 15 days late, LendingClub charges a 5% late fee or a minimum of $15.

LendingClub Personal Loans - Worth the Investment?

LendingClub personal loans are a good option for those with good credit or a co-borrower and for debt consolidation purposes. They offer competitive rates, flexible terms, and a transparent application process, making them a strong choice for borrowers. They state that the borrowers who use LendingClub to pay off credit card debt see their credit score increase by an average of 48 points.

However, prospective borrowers should be cognizant of the fees tied to LendingClub personal loans, including origination fees and late payment fees. It’s integral to include these fees in your decision-making process when assessing if a LendingClub personal loan suits your needs.

Before committing to a LendingClub personal loan, it’s a good idea to compare rates and terms with other lenders, such as SoFi and Upgrade. These online lenders may offer higher loan amounts, more competitive APRs, or different repayment terms that better suit your needs.

In conclusion, LendingClub personal loans may prove a valuable investment for borrowers with good credit, co-borrowers, or those seeking debt consolidation loans. Nevertheless, comparing rates and fees with other lenders before settling on a decision is crucial to obtaining the best personal loan for your financial circumstances.

Summary

In summary, LendingClub offers a range of personal loans with competitive rates, flexible terms, and a user-friendly application process. Their commitment to transparency and positive user experiences make them a strong contender in the personal loan market.

However, potential borrowers should be aware of the fees associated with LendingClub personal loans and compare rates with other lenders before making a decision.

Ultimately, LendingClub personal loans can be a valuable financial tool for borrowers with good credit or co-borrowers and those seeking debt consolidation loans. By carefully evaluating the available loan terms and fees and comparing rates with other lenders, borrowers can make an informed decision about whether LendingClub is the right fit for their financial needs.

Frequently Asked Questions

Can LendingClub be trusted?

LendingClub is a reputable financial services company certified by the BBB with an "A" rating, 4.7 million customers, and over 4-star reviews on Trustpilot. Borrowers with good or fair credit can trust LendingClub for debt consolidation or financing large purchases, as they offer rate discounts and direct payments to creditors.

What are the risks of LendingClub?

Defaulting on a LendingClub loan can have devastating impacts on your credit score, as it can stay on your report for up to 7 years. Furthermore, collection efforts from LendingClub and affiliated agencies may be pursued.

Is the LendingClub a legitimate bank?

LendingClub is a legitimate online financial services company certified by the Better Business Bureau with an “A” rating. They offer FDIC-insured banking services such as checking accounts and personal loans, and they have been in business since 2006. Consumers can rest assured that their money is safe and secure at LendingClub Bank.

Why is LendingClub shutting down?

Sadly, LendingClub has made the tough decision to shut down its Notes platform as of December 31, 2020, due to it being economically impractical under a prospective banking framework.

What is the minimum credit score required for a LendingClub personal loan?

The minimum credit score for a LendingClub personal loan is 600-640.