Lending Club Review

By Kevin Mercadante

Company profile:

Lending Club was founded in 2007 with the business objective of offering a more customer-focused lending system, eschewing typical high interest rates and low returns. Headquartered in San Francisco, Lending Club has no physical infrastructure and operates completely online to keep costs low and savings high.

Visit Lending Club

The award winning peer lending provider has earned plaudits from Forbes & ABC News as one of America’s Most Promising Companies. Available to individuals and businesses, the investor-funded loans from Lending Club have exceeded $22bn since the company's inception.

Service profile:

Lending Club works by allowing people to borrow money invested by third parties, available for both personal and business loans. 74% of borrowers experience a FICO score increase three months after obtaining their loan, with an average score increase of 192*. Loans can be used for almost anything from debt consolidation and credit card clearances, to home improvement, car financing and raising business capital.

APR is calculated on credit score, loan amount, loan term and credit history. The average rate that Lending Club borrowers experience is 14.6%, but individuals can borrow from 5.99% to 35.89%*. Loan repayments can be made over either a 36-month or 60-month term.

 

Loan Features

  • 36-month or 60-month term*
  • $1,000 to $40,000 limit
  • 5.99% to 35.89% APR*
  • 4.77% - 8.24% investor return
  • Approval within minutes
  • Funding paid within days
  • No prepayment penalties
  • No hidden fees

 

Loan Application Information

To apply for a loan from Lending Club, you may have to provide the following information:

  • Paystubs
  • W-2 forms
  • Tax records
  • Social security number
  • Proof of identity
  • Proof of income
  • Employment status
  • Credit score of 660+

 

You are able to send this information to Lending Club via fax and you may be subject to a credit score check, to expedite the final loan decision. With Lending Club being a peer-to-peer system, borrowers may also have to answer questions from would-be investors.

Repayment terms:

Repayment through Lending Club is performed through fixed, automated monthly payments. APR is agreed prior to accepting the terms and repayments will remain consistent through to term end. There are no prepayment penalties for borrowers and future interest payments can be eliminated through this method. There are no hidden fees in the system, with Lending Club operating on a complete transparency model.

By consolidating debt or paying off credit cards, you may improve their credit score. 75% of borrowers experience a FICO score increase three months after obtaining their loan, with an average score increase of 20 points2. And of course, checking your rate to view the loan offers you qualify for will not impact your credit score.  

 

Customer Service:

The Lending Club website is a resource of application, eligibility, rates and repayment information – found within the Knowledgebase section of the website. The ‘Popular Topics’ section acts as a Q&A service for frequent and useful queries. The company can be reached directly through Facebook and Twitter, as well as anytime e-mail and toll free support lines available from 6:00am to 5:00pm Monday through Sunday.

Summary:

Lending Club is a highly praised peer-to-peer lending company, with a long history of success and a vast amount of loans paid out. With online application in minutes, funding issued within a few days and manageable, pre-agreed monthly payments – Lending Club offers a customer-friendly alternative to banks and traditional lending.

The A+ BBB accredited business provides up to $40,000 in funding, but will only accept loan requests over $1,000.

Visit Lending Club

Physical address:

71 Stevenson Street, Suite 300,

San Francisco, CA 94105,

USA

* The APR ranges from 5.99% to 35.89%. For example, with a credit grade of A1 you could receive a loan of $10,000 with an interest rate of 5.32% and a 1.00% origination fee of $100 for an APR of 5.99%. In this example, you will receive $9,900 and will make 36 monthly payments of $301.15. The total amount repayable will be $10,841.40. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.47% as of Q3 2016. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans made by WebBank, Member FDIC. All loans via Lending Club have a minimum repayment term of 36 months or longer.

 

 1 Based on responses from 6,279 borrowers in a survey of 95,998 randomly selected borrowers conducted from 1/1/16 - 12/31/16. Borrowers who received a loan to consolidate existing debt or pay off their credit card balance reported that the interest rate on outstanding debt or credit cards was 20% and average interest rate on loans via Lending Club is 15.1%. The origination fee ranges from 1% to 6% and the average origination fee is 5.44% as of Q4 2016. Best APR is available to borrowers with excellent credit.

Average credit score change of all borrowers who took out a loan via Lending Club between January 1, 2013 and September 30, 2016 with a stated loan purpose of debt consolidation or pay off credit cards.

 

About Kevin Mercadante

Kevin Mercadante is a freelance professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has extensive backgrounds in both accounting and the mortgage industry. Follow Kevin on Google+.

 

Last updated: November 15, 2015

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