Lending Club Review

By Kevin Mercadante

LendingClub ID Card:

 Loan typesPersonal, small business, refinancing, debt consolidation, auto/td>
 Loan amount$1,000 to $40,000
 Repayment Terms   3 or 5 year plans
 Top ProLow eligibility terms
 Top ConTakes up to a week to receive funds
 Best forBorrowers with low credit score,  joint loan applications,
those looking for reliable debt consolidation terms

Visit Lending Club

LendingClub at a Glance:

LendingClub is a leading name in the loan marketplace industry. A peer-to-peer lender, LendingClub offers borrowers a wide range of borrowing options and lenders, so the chances of approval are greater with this company. LendingClub also makes applying for a loan simpler by sending out the application to multiple lenders at one time. With a good reputation, convenient application process, and attractive loan terms, it’s understandable that LendingClub is one of the top choices for debt consolidation, business, and personal loans today.

Best for Whom?

  • Low credit score borrowers

LendingClub works with people who have low credit scores, sometimes as low as 600 for individuals.

  • Joint application borrowers

Additionally, for borrowers with even worse credit, LendingClub offers joint application processes. This allows someone with a credit score of 540 to get loan approval.

  • Debt consolidation

LendingClub has loan plans that require up to 80% of the loan be delivered directly to the debt collection, ensuring that debts are paid off, and borrowers can focus exclusively on their single payment loans.

Deep Dive into Pros and Cons

Pros

  • Multiple lenders at one time
  • Flexible eligibility terms
  • Medical loans available

Cons

  • Not available in some states
  • Slow turnaround time

While their service is a good one, potential LendingClub borrowers need to check state availability before getting their hopes up because not all states are eligible for these loans. Additionally, LendingClub can take up to one week to approve, match, and process a loan. This is a long time in the internet-connected world of today.

That being said, LendingClub has excellent eligibility terms and works with many borrowers that other lenders won’t even consider. Their joint loan application offers hope to those with low credit, as well. What is even more impressive is LendingClub’s medical loans option. In some cases, LendingClub will actually deliver 0% loans to help augment the costs of hefty medical bills not covered by the borrower's insurance. These plans are subject to different terms and need to be assessed on a per situation basis.

Loan Features

Highlights for LendingClub:

  • Can be lender and borrower simultaneously
  • Join loan applications
  • Hardship plan

LendingClub has several attractive loan features that borrowers will certainly appreciate. To begin with, their rates are highly competitive. APRs start at 5.99% (and they also have exclusive 4.99% terms for those with exceptional credit). The fact that LendingClub allows joint loans is also a distinguishing factor within the industry. Joint loans are loan applications that require two people to sign on the transaction. This means that if the borrower themselves is unable to pay back the loan (which a low credit score may or may not be an indication of), the co-signer will take responsibility for repayment in their stead. The co-signer has to have a credit score of 600 or greater, but the borrower can have a score as low as 540. However, the combined debt to income ratio must be no higher than 35%.

Another interesting twist LendingClub provides is the ability for people to be both a borrower and a lender. The LendingClub is a marketplace for borrowers to find multiple lenders at one time. Lenders are actually investors, people looking to turn a profit while helping out those in need. The investors take on the loan requests and earn the interest from the loans they provide. What is unique about the LendingClub is that people can invest in a loan and take out a loan simultaneously. So, an individual can actually be making money to help pay off their loan from the same source.

The Application Process:

The LendingClub has a fast online application with the typical questions being asked. Borrowers will fill out questions like how much is the loan request for, what is the loan for, and personal information like email address and phone number. Next, LendingClub will run a soft credit pull. This will not affect credit score.

Once the application is processed, LendingClub will assign the borrower a grade. This grade will determine which investors will take up the loan request and what type of terms the borrower can expect to receive. Only lenders can see the grade, not the borrowers, and grades are based on bank details and credit history.

A lender can then approve the loan request, offer loan terms to the borrower, and complete the process if the borrower agrees to their offer. Borrowers should be careful to read the terms of the loan offers carefully to understand exactly what they entail. The beauty of the LendingClub system is that borrowers may be offered several loan offers simultaneously. So, they can compare rates, terms, and offers easily, and come out with the best loan available to them.

Loan Terms:

LendingClub has competitive loan terms, often besting the competition in several areas. This is because of the loan structure. A P2P lending marketplace has multiple lenders competing for the same loan, so borrowers get the benefit of lower rates and better terms as a result. Typical loan terms range from 5.99% – 35.89% APRs, and borrowers can request anywhere from $1,000 – $40,000.

One downside to the LendingClub is their fees structure. Some lenders such as Discover or SoFi waive all fees, making their loans more affordable and manageable. Many other lenders do take fees, though, so LendingClub is not alone in this practice. Some of their standard fees include:

  • Origination fee: 1% - 6%
  • Late fee: 5% of payment due or $15, whichever is greater
  • Check processing fee $7
  • Unsuccessful payment fee $15

LendingClub has pretty low eligibility requirements. They expect a minimum of 600 credit score. The average borrower has a score of 699, which is higher than their minimum but lower than many other lenders out there. LendingClub also looks for a minimum credit history of 3 years, but of course the more you have, the better. They'll even work with people who have a debt to income ratio of 40%. That’s quite high.

Repayment Terms:

LendingClub has flexible repayment terms with plans available for either three or five years. As mentioned, there is a late payment fee for missed payments or payments that are put through too late to be processed on time. However, LendingClub offers a generous Hardship Plan to its borrowers. The Hardship Plan allows borrowers to freeze their loan for up to three months during difficult financial times such as unexpected debt, medical bills, or loss of income or employment. Borrowers will still have to pay the interest payments each month, but that is significantly less than the overall monthly amount due.

How Safe is It?

LendingClub does a lot to keep its borrowers and investors safe from harm. Each page on their website is VeriSign Secured, and all transactions are TRUSTe certified. Additionally, LendingClub is a publicly traded company, so there is a lot of information about the company available to the public (such as financial records, reports, and statistics). This kind of public identification ensures that LendingClub is maintaining all the legal requirements, making them a reliable and safe alternative to some of the more anonymous or lesser-known competitors.

Help & Support

LendingClub has good phone support available during extended business hours as follows:

Monday-Friday 6:00AM - 5:00PM PST

Saturday: 8:00AM - 5:00PM PST

Additionally, they have a thorough FAQ section that is neatly broken down into categories. There is also a search function to help facilitate faster answers.

Summary

The ability to apply to multiple lenders at one time automatically makes LendingClub more convenient. Combine this with the flexibility of long repayment terms, thoughtful Hardship Plan, and good loan terms overall, and LendingClub becomes more than just a viable option for borrowers to consider. If time is not of the essence, anyone looking for a reliable loan service should turn to LendingClub for their assistance.

 

 

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Last updated: November 2, 2017

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